The food industry undergoes constant changes due to evolving consumer demands, technological advancements, shifts in family structures, health considerations, and global trends. Small and medium enterprises (SMEs) play a vital role in food processing, with opportunities spanning production, processing, and marketing for both local and international markets. Innovation is instrumental in enhancing a firm’s competitiveness and production capacity, yet many food processing SMEs in Zambia face challenges in this regard. This study aims to investigate barriers to innovation capacity among SMEs in Lusaka’s Industrial Area. Primary data from 100 SMEs were collected and analysed using SPSS version 25, employing logistic regression models and cross-tabulations. The study reveals the influence of factors such as innovation costs, market dominance, and uncertainties on the innovation process. Lack of funds significantly impedes firms’ ability to innovate, although innovation costs alone do not necessarily deter engagement in innovation activities. Strategic measures, including resource allocation, cost-benefit assessments, internal innovation focus, and clear innovation roadmaps, are recommended to address these constraints. Future research should delve into the profitability impact of innovation and explore methodologies like time series analysis for capturing innovation capacity over time.
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