Innovation and profitability of manufacturing industries in Uganda:

Abstract

The critical purpose of this study was to examine the effect of innovation on profitability of manufacturing industries in Uganda, in detail Simba Cement Industry. Innovation was viewed in three dimensional constructs consisting of product innovation, process innovation, and organizational innovation. Profitability on the other hand was viewed in terms of ROA and ROE. This study employed both Cross-Sectional and quantitative survey design. Under this study, product innovation, process innovation and organization innovation were considered as explanatory variables for profitability. A stratified random sampling technique was applied to choose the target population and simple random sampling techniques were used to select the target respondents. Participants under this research were chosen from various positions served at the organization. Totally, 55 participants who were the target population were involved in the study and a sample of 48 participants was selected as the respondents in the study. The method used in the study was quantitative approach which employed closed ended questionnaire as a major tool of data collection. The study used descriptive statistic (frequency, mean, and standard deviation), regression and correlation analysis. The study findings concluded that product innovation, process innovation and organization innovation have positive significant effects on profitability. However findings also indicate that there exists a positive relationship between innovation and profitability of manufacturing industries specifically Simba Cement Industry. The degrees of influence of product innovation and organization innovation have the higher significant effect on profitability, than that of process innovation. Hence, it can be recommended to Simba Cement Industry to finance and allocate more innovation practice since it is very significant to improve profitability. Keywords: Innovation, Profitability, Organization innovation, Process innovation, Product innovation.