Adoption of Advanced Manufacturing Technology by SMEs in Kenya: Effect on Performance and Policy Implications

This study examined the adoption of advanced manufacturing technology (AMT) by small and medium-sized enterprises (SMEs) in Kenya and its effect on their performance. The study utilized a mixed-methods approach, combining qualitative and quantitative data collected through Interviews and structured questionnaire respectively. The target population constituted SME owners and Managers across various manufacturing sectors in Kenya. The study employed a stepwise regression model to analyze the results. Findings indicate a positive correlation between AMT adoption and operational performance, including increased production efficiency, product quality, and market competitiveness. The study also shows a significantly positive relationship between use of AMT by SMEs in Kenya and their ability to develop and sustain competitive advantage in their operations by employing both planning and design technologies. Specifically, the study found a significant and positive relationship between design technologies and performance of SMEs in Kenya (p<0.001), and between planning technologies and performance of SMEs in Kenya (p<0.001). Further, the study found that manufacturing technologies do not have a signigificant positive effect on performance of SMEs in Kenya when considered together with planning technologies and design technologies (p=0.698).The paper recommends that SMEs should adopt design technologies and planning technologies that are aligned to their manufacturing process. The study also recommends that appropriate policies that encourage adoption of AMT should be developed to enhance performance of SMEs given their pivotal role in national economic development.