The majority of Sub-Saharan African countries are located in the lower half of the DBI ranking, suggesting that firms located in these countries suffer from severe resource constraints. To compensate for these constraints, to survive and to obtain additional knowledge in order to innovate, firms may apply different strategies (for instance, incremental, frugal or reverse innovations may be introduced by firms).
A data sample of formally registered Nigerian firms, based on the World Bank Enterprise Survey 2014 and its linked Innovation Follow-up, shows that cooperation is a frequently used form of sourcing knowledge for innovative activities1. Giving employees some time to develop new ideas, and the purchase of equipment, machinery, and software represent further frequently used innovation strategies.
Other domestic firms are the most common cooperation partners for innovation-related activities. A minority of firms cooperates with foreign partners or academic institutions. It is notable that firms in Sub-Saharan Africa are typically small-sized. The firms covered in the underlying sample employ, on average, about 43 workers, with a median of 10 employees.
Further regression analysis, taking into account common control variables (firm age, firm size, sector, workers’ and top manager’s education, internet access) reveal that cooperation, and especially cooperation with other domestic firms is significantly and positively related to firm-level product innovation. Giving employees time and latitude to develop new ideas, investing in new equipment, machinery and software, and efforts in internal R&D are also associated with higher innovation.
The non-significant association between Nigerian innovation and cooperation with foreigners is striking. In fact, Western firms are rather reserved with respect to business efforts in Sub-Saharan Africa2. However, ongoing digital transformation can bring about further positive changes in the business and innovation environment of African countries, providing new opportunities for cross-border collaboration to be finally recognized by Western and African firms.
| Variables | Model 1 | Model 2 |
|---|---|---|
| Dependent Variable | Product Innovation | Product Innovation |
| _ | _ | _ |
| Intercept | -0.554** (0.280) | -0.521* (0.290) |
| Cooperation | 0.723*** (0.121) | _ |
| Cooperation with Domestic Firms | _ | 0.748*** (0.132) |
| Cooperation with Domestic Academic/Research Institutes | _ | 0.399 (0.373) |
| Cooperation with Foreign Firms | _ | -0.103 (0.331) |
| Cooperation with Foreign Academic/Research Institutes | _ | 0.377 (0.785) |
| Cooperation with Consultants | _ | 0.0793 (0.213) |
| Cooperation with the Government | _ | -0.00290 (0.328) |
| Purchase of Equipment, Machinery and Software | 0.597*** (0.160) | 0.594*** (0.161) |
| Purchase of Patents or Licenses | -0.494* (0.261) | -0.387 (0.262) |
| External R&D | 0.00549 (0.421) | 0.0596 (0.404) |
| Giving Employees Time for Own Ideas | 0.415*** (0.117) | 0.417*** (0.118) |
| Internal R&D | 1.265*** (0.217) | 1.174*** (0.216) |
| Formal Training | 0.122 (0.215) | 0.165 (0.218) |
| _ | _ | _ |
| Control Variables | yes | yes |
| Observations | 637 | 637 |
| Pseudo R2 | 0.2325 | 0.2364 |
| _ | _ | _ |
| Signif. codes: 0.01 ‘***’ 0.05 ‘**’ 0.10 ‘*’ | _ | _ |
Dohse, D. und S. Fehrenbacher (2022), Towards a better understanding of African innovation: internal knowledge development and inter-firm cooperation in Nigeria, Kiel Institut für Weltwirtschaft (mimeo).↩︎
Dohse, D., Fehrenbacher S. und P. von Carlowitz (2022), Potenziale entwickeln und Wissen teilen: deutsche Unternehmen in Afrika, Wirtschaftsdienst, 102(7), 563-567.↩︎