Barriers to Innovation Activity of Enterprises and Their Determinants

Theoretical background: Innovation is essential for enterprise development and economic growth. Therefore, knowing and characterising the determinants of innovation activity in enterprises is crucial. Determining the factors that shape the innovativeness of enterprises will enable entrepreneurs to skillfully and flexibly adapt to both the current and future market situation. Innovation is a process that involves significant expenses, a long payback period, specific risks and uncertainty, as companies are exposed to various obstacles, both internal and external, throughout the innovation process. Factors limiting innovation implementation are perceived differently by companies of different sizes, ages or depending on the scale of their operations. The literature provides many classifications and divisions of barriers to innovation activity, butthere is still little research on the factors influencing their perception. Purpose of the article: The study aims to identify the factors hindering the decision to start or carry out innovative activity and the determinants of a firms’ perception of barriers to innovation activity in enterprises from the Lubelskie Voivodship in 2017–2019. Research methods: A questionnaire survey on a research sample of 104 enterprises from the Lubelskie Voivodship was conducted, and exploratory factor analysis was employed. Main findings: The paper identifies the most important factors hindering the decision to start or carry out innovative activity in enterprises from the Lubelskie Voivodship in 2017–2019. On the basis of the results of surveys and exploratory factor analysis, it was found that an important barrier to carrying out innovative activity of entities in the Lubelskie Voivodship is the financial barrier related to the lack of capital, difficult access to it and high cost of its service, as well as high costs of innovative activity. In the opinion of entrepreneurs, the market situation, i.e. uncertain demand for new ideas and too much competition in the market and internal processes, are important factors for the development of innovation. The analysis also demonstrates that the sector and scale of activity impact the perception of barriers to innovation. For companies operating in the service sector, the constraints to innovation processes related to the financial, market and internal processes are lower than in the group of industrial and construction companies. The results also indicate a negative relation between the scale of activity and innovation obstacles related to internal processes.