This study investigates the relationship between organizational innovation and the performance of Small and Medium-sized Enterprises (SMEs) within the bioenergy industry in Nigeria. Specifically, it aims to assess the impact of product, market, and process innovations on market share and customer satisfaction, while also examining the moderating role of government policies on these relationships. Structured questionnaires and key informant interviews were utilized to gather data from 153 SMEs, determined using the Krejcie and Morgan table, from a total population of 252 organizations. The study’s reliability was verified with Cronbach’s alpha values ranging from 0.78 to 0.84 across various variables, indicating good reliability. Correlation analysis revealed no significant relationships between product innovation and market share (r = -0.008, p = 0.72), product innovation and customer satisfaction (r = -0.249, p = 0.47). Furthermore, government policy significantly moderated the relationship between organizational innovation and performance (r = 0.40, p = 0.006). The findings indicate that various forms of innovation within SMEs significantly enhance performance metrics, such as market share and customer satisfaction, and that supportive government policies can further strengthen these effects. Based on these findings, it is recommended that SMEs in the bioenergy industry prioritize continuous innovation in their products, processes, and market strategies to improve their performance.

Keywords: Organizational Innovation, Performance, SME, Bioenergy