INNOVATION AS A COMPETITIVE ADVANTAGE: THE ROLE OF PRIORITIZATION AND PROTOTYPING IN RETAIL PRODUCTIVITY

Abstract

Brazil’s retail sector holds a strategic position in the national economy, particularly for micro and small enterprises that face ongoing competitiveness challenges in a dynamic and constantly evolving environment. In this context, innovation emerges as a key driver of productivity, understood as the ability to prioritize problems and develop solutions through prototyping. This practice enables idea validation, error reduction, and enhanced organizational efficiency. The Local Innovation Agents Program (ALI), promoted by SEBRAE in partnership with the Ministry of the Economy and the National Council for Scientific and Technological Development (CNPq), was designed to support businesses in this process by providing technical guidance and innovation-oriented methodologies. This study aims to analyze the impact of problem prioritization and prototyping on the productivity of micro and small enterprises in the retail sector of southernmost Santa Catarina, comparing the outcomes of organizations that implemented these practices with those that did not. This exploratory, mixed-methods research involved ten intentionally selected companies, evenly divided into two groups to allow for comparative analysis. Data were collected during participation in the ALI Program, with productivity measured at two distinct moments: the beginning and the end of the intervention. The results show that companies that applied prioritization and prototyping achieved an average 52% increase in productivity, whereas those that did not adopt these practices recorded a 12% decrease. These findings demonstrate that innovation-driven methodologies play a decisive role in strengthening the competitiveness and sustainability of micro and small retail enterprises.