Structural equation modelling of technology innovation model using AMOS for Indian MSMEs

Small enterprises typically make a large contribution to manufacturing employment in poor countries. However, the developmental contribution of most of them is limited to generating subsistence employment of last resort. Hence, in the face of fast labour force growth and limited employment absorption in other sectors, developing country governments have mounted efforts to improve productivity and earnings in these firms. Technology innovation is considered to be essential for the survival and growth of individual firms. It is not only the means to increase production, improve quality and develop new products but also increases competitiveness, expands exports and ultimately ensures uninterrupted economic growth. The present study is directed towards justifying the support of technology innovation initiatives (TII) in improving manufacturing performance of MSMEs. Using AMOS 22.0 software structural equation modelling (SEM) of TI model was done. After constructing the model, it was analysed that SEM–TI model values was obtained to near fit values. This implies that the TII can be helpful for Indian small firms in improving the overall manufacturing performance in terms of reduction in the cost of production, extension in range of products, improvement in product life cycle, market share and mean sales profitability.