Small- and medium-sized enterprises (SMEs) are constrained and hindered from connecting to the global value chain. Specifically, we examine how domestic firms mobilize their innovative capabilities to respond to firm-level and market constraints. Drawing on a sample of 29 managers and owners of manufacturing SMEs in Nigeria, we uncovered that frequent power outages impose difficult additional cost and operational challenges, impeding their operational competitiveness for regional and global competition. We shed light on how resource-deficits and infrastructural impediments impact SMEs' operational activities and curtail their market competitiveness on the global stage. Further theoretical and practical implications are discussed.