BEYOND BARRIERS: RESOURCE CONSTRUCTION, CONSTRAINT-INDUCED CAPABILITY AND INSTITUTIONAL BYPASS IN NIGERIAN SME INNOVATION

This study extends the Resource-Based View (RBV) by theorising how Nigerian SMEs construct innovation resources under extreme institutional constraints. Drawing on 50 semi-structured interviews across four Nigerian states, inductive thematic analysis reveals that severe infrastructure deficits simultaneously disable traditional innovation pathways while enabling improvisational capabilities that become sources of competitive advantage, which is termed constraint-induced capability. Contrary to policy assumptions, 82 % of sampled innovative SMEs do not avail themselves of formal government support, a strategic choice theorised as institutional bypass. The paper demonstrates that resource valuation is institutionally contingent; assets considered ordinary in developed economies become VRIN (valuable, rare, inimitable, non-substitutable) when scarce. Next, it shows that informal networks function effectively only during early-stage improvisation; sustained innovation requires eventual formalisation, creating an under-researched field. Furthermore, it reframes the policy utilisation gap as rational entrepreneurial logic rather than implementation failure. Finally, it provides a testable conceptual model for future quantitative validation. The high bypass rate among innovative SMEs in the sampled regions signals systemic gaps between policy design and enterprise reality. Effective intervention requires restructuring access architectures to reflect how SMEs actually navigate constraint.