Fariba Riahi - Project manager of National Iranian Oil Company(NIOC
Zahra Banasadegh

The aim of this paper is study of barriers which restrict Iranian SMEs to innovation. Due to the fact that SMEs are seen as a important part of developmental issues, the objective of the study was to investigate obstacles impeding Persian SMES to acheive innovation with a more holistic view. First, a comparative study conducted among three developing countries; namely, Malysia, South Africa, and Turkey to give insight into the typical innovation barriers in the developing countries. According to the conducted comparative study and the related literature, a set of fifteen obstacles were selected. Then, an empirical study was conducted by using principal component analysis to identify the importance of each barrier and define proper data structure by reducing the variables to four clusters. The most important obstacle was termed Management which is mainly an internal factor. The other obstacles respectively determined were Economic & Financial (external), Government (external), and Market (external

Innovation, Barriers, SMEs,Principal Component Analysis (PCA