Abstract
This study focuses on the influential role of the manager in the innovative performance of small and micro manufacturing firms within the clothing, textiles, footwear and leather (CTFL) industry. Building on agglomeration, innovation and upper-echelon literature, this study examines how external knowledge-sourcing strategies used by SMEs, such as clustering and cooperation, create knowledge spillovers; and how the managers’ characteristics can sway the probability of firm innovation through their effect on firm strategic choice, and through their effect on the knowledge spillovers–innovation relationship. In efforts to examine this relationship, we employed empirical data from SARChI’s 2019 Johannesburg firm innovation survey to test the extent to which managerial characteristics such as age, education and industry experience interact with knowledge spillovers in the form of intra-industry idea exchanges pertaining to: employee training; new products and services; and business management.
Probit model results from a sample of 237 CTFL manufacturing firms suggests that all three knowledge spillovers have a positive effect on the likelihood of CTFL manufacturing firm innovation, and all three managerial characteristics are significant in their influence on firm innovation probability. All three managerial characteristics, when they interact with knowledge spillovers, are significantly associated with knowledge spillovers pertaining to employee training. The influence of training externalities on firm innovation likelihood increases by 47% for managers with post-secondary education. Further findings reveal that only the manager age and training externalities interaction is significant for firms that have introduced product innovation, but not for process or service innovation. The findings reveal that young, highly educated and highly experienced managers are receptive and aware of intra-industry knowledge spillovers of employee training and will thus be in a position to reap the innovation rewards that may come from them. These findings reveal that policymakers must target external knowledge creating environments in their policy action plans and in them inject SMME entrepreneurs that have characteristics that will find these types of environments innovatively conducive.
Keywords: Innovation, Knowledge spillovers, Managerial characteristics, Industrial clusters, Firm cooperation, Manufacturing.