Institutions are interested in innovation due to its great impact on achieving excellence, gaining competition with other institutions and enhancing their level of growth, which ensures their sustainability, and given the current and expected position of small and medium enterprises economically, the research seeks to analyze the ability of small and medium enterprises operating in the Kingdom of Saudi Arabia to manage institutional innovation in which supports their ability to provide better "products and services", and implement their work within the framework of work models and procedures that improve performance and support sustainability that is achieved whenever The institution was distinguished by achieving this with higher quality. And its access to a more advanced competitive position among similar institutions, and the research was based on the study of the current reality in the analysis of innovation mechanisms used in small and medium enterprises to support their activities.

One of the most important findings of the study is that SMEs are able to apply innovative practices relatively more than the role played by innovation Large companies in the Kingdom of Saudi Arabia in some aspects, where SMEs excelled in focusing on providing completely new goods or services, focusing on reducing prices with relative importance 52.07%, 60.4% compared to 47.93%, 39.6% in large companies, which reflects their future ability to achieve the expected goals to support the Saudi economy, especially if Facing the challenges facing the application of innovative practices