EFFECT OF SOCIO-CULTURAL AND TECHNOLOGICAL FACTORS ON PERFOR-MANCE OF SMALL AND MEDIUM SCALE ENTERPRISES (SMEs) IN NASARAWA STATE, NIGERIA

Abstract

This study explored the effect of Socio-cultural and Technological factors on the performance of Small and Medium Enterprises (SMEs) in Nasarawa state, Nigeria, addressing the high failure rate of SMEs within their first 1-5 years. The harsh economic environment, limited access to fi-nance, and inappropriate business practices contribute to this trend. The study focuses on the influ-ence of acculturation and technological compliance on sales, production, and profitability of SMEs. Nasarawa state's SMEs confront a dynamic external environment marked by evolving cus-tomer needs, heightened competition, changing industries, poor infrastructure, limited finance ac-cess, and regulatory uncertainties affecting growth and sustainability. To fill the research gap, a survey research design is employed, collecting data through structured questionnaires from 353 registered SMEs out of a population of 3,015 in Nasarawa state, Nigeria. The analysis, conducted using Partial Least Square Structural Equation Model (PLS-SEM), reveals that socio-cultural and technological factors positively and significantly impact SMEs' performance. The findings empha-size the importance of SMEs conducting thorough market research to understand and respect local culture, traditions, and values in Abuja, Nigeria. Additionally, they should embrace contemporary technological compliance by developing mobile apps or optimizing websites for mobile devices to broaden their customer base. In conclusion, this study underscores the critical role of socio-cultural and technological factors in enhancing SMEs' performance, offering practical recommen-dations for operators in Nasarawa state, Nigeria, to navigate and thrive in a competitive business environment.