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Innovations, such as introducing novel concepts, have been proven to improve efficiency, reduce costs, and enhance overall performance, which is vital for the competitive landscape of SMEs in Nigeria. This cross sectional survey research explores the impact of innovation capabilities, specifically product and process innovation, on the survival of Small and Medium-sized Enterprises (SMEs) in Ibadan, Oyo State, Nigeria. The study employed the Cochran formula to determine the sample size of 406 respondents. The study revealed that product innovation and process innovation significantly influence SME profitability. Product innovation demonstrated a weak but statistically significant positive correlation with SME survival, explaining 9.6% of the variation while process innovation exhibited a stronger relationship, explaining 18.1% of the changes in SME survival. The study concludes that the capacity to innovate enhances goods and services, improves customer satisfaction and loyalty, and ensures long-term sustainability. The study recommends that SMEs intensify product research efforts to enhance patronage and survival. Additionally, SME owners are advised to re examine and invest in business processes, recognizing their impact on survival.