Analyzing the Barriers to Innovation Development in Emerging Economies: Vietnamese Small and Medium Enterprises (SMEs) as an Empirical Case

Innovation is widely recognized as a key factor in the competitiveness of nations and firms. Also, it has played a significant role in business ecosystem, and the achievement of science and technology have greatly spread to the development of both local and global firms. However, there are factors that discourage the applicable capabilities of such innovations on business processes. The aim of this paper is to evaluate the degrees of barriers which block the use of innovation in the case of small and medium enterprises (SMEs) in Vietnam namely human resources, access to finance, transparency, tax rates, trade regulations and customs. The secondary data used were gathered from Enterprise survey (ES) of 479 small and medium enterprises in five different regions (Red River Delta, North Central Coast, Central Coast Area, South East and Mekong River Delta), which are conducted by the World Bank Group from 2015 to 2017. The binary logistic regression and Logit Model were used to process variables and data analysis. The major findings revealed that barriers of accessing financial capacity, trading regulations and customs have positively affected on innovation of SMEs in Vietnam. Finally, it could be emphasized that HR training has the strongest impact on innovation changes of the enterprises by 55.7%.