International Research Journal of Engineering and Technology (IRJET)
e-ISSN: 2395-0056
Volume: 10 Issue: 07 | Jul 2023
p-ISSN: 2395-0072
www.irjet.net
Determining factors in the closure of MSMEs in the municipality of San Pedro Cholula: an analysis of the effect of innovation strategies. Moreno-Vázquez D.1, Lozada-Lechuga J.1,2, M. C. Fierro-Xochitótotl.2 Ramírez – Rosas J. G. 2. 1Centro Universitario CIFE, Departamento de posgrado, Tabachín, 514, 62140 Cuernavaca Morelos, México.
2Universidad Politécnica de Puebla, tercer carril del ejido serrano s/n, 72640 Juan C. Bonilla, Puebla, México.
---------------------------------------------------------------------***--------------------------------------------------------------------These alarming figures underscore the need to identify and Abstract - MSMEs represent a valuable source of
comprehend the specific challenges faced by MSMEs in Mexico, to provide them with more effective support and promote their long-term survival and growth.
employment; however, they are adversely affected by their high closure rate. Typically, these enterprises tend to lack strategic planning and competitiveness. Furthermore, the lack of managerial skills on the part of senior management can weaken the ability of MSMEs to face market challenges, adapt to changes, and maintain competitive advantages. In the present study, the innovation strategies employed by directors of MSMEs in the Municipality of San Pedro Cholula, Mexico were analyzed, comparing open and closed businesses. The results demonstrate statistical differences in the means for items related to the innovation of their organizational structure, the incorporation of customer suggestions in the development of innovative products or services, participation in events and activities related to the business, and particularly in the offering of innovative products or services that allow them to stand out in the market.
It is important to highlight that many Latin American MSMEs lack access to updated and accurate data on market demand and trends, which hinders strategic decision-making. Additionally, the inability to leverage economies of scale and the lack of access to new technologies and organizational methods also impede the growth and competitiveness of MSMEs [6]. The adoption of new technologies, such as ecommerce and automation, can enhance the efficiency and productivity of these enterprises, but their implementation is often limited due to financial constraints and a lack of knowledge. In addition to these barriers, excessive bureaucracy and rigid labor markets also pose significant challenges for MSMEs in Latin America [7]. Complex and costly bureaucratic processes hinder the establishment and operation of new enterprises, leading to the prevalence of informality and tax evasion. Furthermore, labor market rigidity limits hiring and firing flexibility, making it difficult for businesses to adapt to changes in demand and market conditions. These institutional and regulatory barriers need to be addressed to foster an enabling environment for the development of MSMEs and job creation in the region [8].
Key Words: Innovation, MSMEs, Closed enterprises, Open enterprises, ANOVA,
1.INTRODUCTION The economic development of Latin American countries is characterized by persistent inequality, an intrinsic phenomenon in this region [1]. Micro, small, and medium enterprises (MSMEs) undoubtedly emerge as a driving force in the economy, not so much in terms of the number of economic units or the volume of employed personnel but for their significant role in consolidating the efforts of numerous micro-entrepreneurs who have managed to survive constant environmental changes [2].
It is important to note that these barriers also hinder the promotion and expansion of export capabilities for MSMEs, relegating them to remain as small-scale business entities that face high transaction costs and elevated insolvency rates [9].
Although it is undeniable that MSMEs constitute a valuable source of employment, they are affected by their closure rate [3]. According to the National Institute of Statistics and Geography (INEGI) [4], between May 2019 and June 2021, a total of 1,200,000 small and medium enterprises were established in Mexico, while 1,600,000 closed their doors permanently. These data reveal significant sustainability challenges in MSMEs. Additionally, data provided by the Center for the Development of Business Competitiveness reveal that a concerning 75% of Mexican micro, small, and medium enterprises permanently close before reaching two years of operation [5]. This high rate of business mortality highlights the need to comprehensively address and analyse the factors contributing to the failure of these enterprises.
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Therefore, conducting an analysis of internal factors within organizations could provide them with a crucial strategic capacity to achieve a differentiated position in the market, thereby supporting their survival [10]. In today's business environment, characterized by its dynamic and uncertain nature, companies are compelled to develop and implement more effective strategies across their various functional areas, with a focus on aspects such as growth, social responsibility, and innovation [11]. However, MSMEs are the ones in a more vulnerable position and face greater uncertainty when dealing with these
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