Entrepreneurship and Innovation: Evidence from SMEs in Prishtina region, Kosovo

Innovation has become a central theme and challenge in the literature of entrepreneurship, SMEs management, and strategic knowledge management and in the literature of organizational learning. Innovation needs a business environment that is conducive to long-term investments in new business activities. This way, the development of innovation policy in SMEs forms an important environment that needs to be supported by government new economic policies and strategies and especially by new approach to entrepreneurship and innovation. In this paper we address the innovation strategies of SMEs engaged in the production of products and services. We base our conclusions on an analysis of primary data collected in a survey of 80 small and medium sized firms in the region of Prishtina, held between March 2014 and May 2014. The results show that innovation in business tends to be driven by external competitive pressures and customer demands. Many SMEs face financial barriers to engaging and undertaking innovation, while a few of them have been seriously engaged in innovation despite the obstacles.