TOWARDS INDIGINISATION OF ICT EQUIPMENT PRODUCTION IN AFRICA: THE PERSPECTIVE OF INNOVATIVE FIRMS IN NIGERIA’S ICT CLUSTERS.

By Michael Awoleye (Ph.D)

Background

Activities in ICT clusters hold promising potentials as agents of industrial regeneration. This is a major element in the quest of building knowledge-driven economy. The influence of innovations on business performance cannot be overemphasised; it has been adjudged a driving force for economic growth. The computer village in Ikeja has been christened the silicon valley of Africa, the revolution that has taken place in the recent time could make her live to the standard. The business activities and the cluster environment has been revolutionised and it’s now wearing a new look. Beyond aesthetics and attractions, this report provided some glimpse of the future of a prospective leader among Hi-tech Clusters in Africa.

Introduction

This is an excerpt of a broad study that assessed production and innovation capabilities among micro, small and medium enterprises in ICT clusters in Nigeria. It investigated the types of innovation that exist among the firms in the selected ICT clusters in Nigeria. It also examined the factors responsible for their performances as it relates to total sales generated and added value on innovative products. It also showed evidences of the impact of clustering on firm’s business activities. In addition, it presented a policy framework which involves key stakeholders in the Nigerian National Innovation System. This consist guide for possible role of government through her relevant agencies, as well as the role of private firms, knowledge institutions and other relevant key players. This however include financial institutions, suppliers of equipment & components and all levels of customers among others. This ICT framework thus provided a roadmap for possible seamless interactions and linkages, as it leveraged on resources and knowledge in the cluster-space. If this evidence-based policies are properly harnessed; it has the propensity to effect the desired economic transformation expected of the supposed giant of Africa. The main thrust of the study was premised on the country’s heavy reliance on importation of computers, mobile phones, components and other related peripherals. These were noted to be contributing to the hike in the cost of the products as they were sensitive to macroeconomic variables such as foreign exchange and import duties.

Some findings

The researched covered three ICT clusters in Nigeria which include: the Ikeja Computer Village, the Ogbunabali Cluster in Port-Harcourt and the computer/GSM village in Abuja. Two hundred and twenty eight CEOs and managers meticulously completed the research instrument. Thus, the study revealed that about 15% of the ICT firms in the clusters were innovative and they had been involved in product manufacturing such as computer cloning, hardware modifications, design and production of local language support keyboards; including manufacture of computer casing etc. although, the implementations of some of these designs were reportedly manufactured in collaboration with their foreign partners. These firms were also found to be constantly developing customised standalone and embedded software applications. This among others include payroll packages, student record management systems (SRMSs), attendance and clocking systems and other advanced applications which involve business processes). Innovation activities in the firms were categorized into technological and non-technological innovations. The study noted that within the period of the coverage of the survey, these firms had generated some good number of product and process innovations and had also rolled out excellent organisational and marketing innovations. In the long-run, the non-technological innovations (organizational and marketing) were found to be largely prevalent across the three clusters studied. Some factors that appeared to be responsible to have significantly influenced the building of production and innovation capabilities leading to the performance were highlighted as follows. These are: qualification of marketing manager and the chief executive, easy communication flow between the merchants and the suppliers of materials, market competition, firm’s commitment to innovate (innovation expenditure), age of business, and proportion of technicians and engineers present in the organisations. On the effect of agglomeration, it was further gathered that this has been largely engendered by: resource spillover, linkages and collaboration, inter-firm resource sharing, information sharing, some interactions with knowledge institutions and Coopetition. The latter explains a situation where the firms compete but yet do cooperate. The competition grounds was found to be more of scrambling to capture more market share to maximize benefits to their businesses, while the cooperation were mostly on knowledge/information sharing and capacity development.

The study concluded that production and innovation capabilities in ICT clusters in Nigeria could be improved through provision of adequate human resource development, provision of financial and technology support services and improved working environments among others.

Some Policy suggestions

 Presently, little attention is given to ICT clusters in various policy documents in Nigeria e.g. the Science, Technology and Innovation (STI) and ICT policy. It is therefore recommended that government and other ICT stakeholders adopt this framework as provided by this study as basis for formulating either implicit or explicit policies in this area. This promises to enhance indigenous hi-tech development in production, innovation capability and performance in ICT clustered firms in in Nigeria.

  • Government should provide conducive environment in and around the ICT clusters that could promote businesses. This will assist in graduating the huge micro firms in these clusters to expand, thereby providing better chance of gaining further productive and manufacturing skills.
  • Through public private partnership (PPP) a well-equipped central laboratory could be established one in each of the 6 geo-political zones of the country. These will be available within the reach of firms that may want to achieve some innovative tasks but constrained with equipment and related facilities.
  • There should be creation of cluster knowledge repository for the whole country, web portal that will be available to all stakeholders, customers, suppliers, government, financial institutions, among others for information sharing, initiating collaborations and related pursuits.
  • There should be provision of Cluster Innovation Fund (CIF) which will be a research fund to maintain the cluster central laboratory.
  • A platform could also be created where firms or individual’s innovative ideas could be nurtured or possibly monetised which may depend on the choice of the prospective innovator.
  • Firms tend to be threatened when their scientists, researchers and other key personnel migrate to a higher paying rival or exploit the discovery on their own. Job mobility should be restricted to the minimum by keeping key staff with impressive conditions of service relative to market situation. There should be stiffer penalty for defaulters who may contravene the quality and standards of production and maintenance of ICT equipment in the clusters.
  • The telecommunication regulatory body should enforce quality of service delivery by the providers of mobile and Internet services to enhance smooth running of the technologies as adopted by the firms to facilitate smooth communication.
  • School’s curriculum should be reviewed and tailored towards the need of the current and future market demand; this tends to improve the synergy between the academia and private firms.
  • Firms in the clusters also need to further develop effort to cooperate more by creating alliances leveraging on strengths of individual firms.
  • The government should discourage (through high tariffs), the influx of used products so as to force the firms to redirect their technical know-how towards local production of computers and mobile phones.
  • There should be improved infrastructure in and around the ICT clusters to facilitate better communication with suppliers, customers and partners as their contributions have been identified as key in the performance of the firms.

Michael Awoleye (Ph.D) is a research fellow with the  African Institute for Science Policy and Innovation, Obafemi Awolowo University, Ile-Ife and can be reached via  awoleye@yahoo.co.uk

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