Assessment of Innovation Types and Business Performance Among MSMEs in Eastern Province of Saudi Arabia

The Kingdom of Saudi Arabia (KSA) seeks to diversify the economy from oil-dependent having realized the unsustainable nature of this resource to economic development in years to come. These warrants given attention to MSMEs in contributing to GDP as stated in the country’s Vision 2030. Innovation has become a good channel through which firms drive their own performance which hitherto led to economic growth. This study investigates the level of innovation and the influence of innovation types on business performance of MSMEs in the Eastern province of KSA. The outcome indicates that innovation is at the medium level among the MSMEs and multinomial regression result reveals that while process and organizational innovations are significant in influencing performance, product and marketing are not significant. Furthermore, R&D, age and size of enterprises significantly influence the business performance. Government should create better support to motivate firms to continuously engage in research and innovation.