External linkages and product innovation in food processing equipment fabricating mses in Nairobi

Abstract

An o pen innovation model underscores the importance of external sources of innovation ideas to enterprises. The case is particularly true for Micro and Small Enterprises ( MSE s) facing financial and technological constr aints for internal research and development (R&D. MSE s , therefore , largely rely on the environment for innovation knowledge and opportunities. However, past studies on innovation focus more on the high - technology sectors in the developed economies than on the low - technology sectors such as equipment fabrication. Further still, past studies examine both external linkages and product innovation in a rather general than specific manner. To deepen our conceptual understanding of external search processes, the p resent study analysed the effect of dimensions of external linkages on type and novelty of product innovation in MSE s in a developing c ountry context. The study argued that external partners possess different innovation knowledge which impact differently o n aspects of product innovation. The study surveyed sixty five MSE s involved in fabrication of food processing equipment in Nairobi . Primary data from MSEs w ere supplemented by secondary data collected from key informants including officials of Kamukunji Jua Kali Association, Kenya Industrial Research Institute (KIRDI), and Kenya Intellectual Property Institute (KIPI) among others. Both quan titative and qualitative data were collected by use of a pre - coded structured questionnaire and interview guides res pectively. Data from respondents were analysed using Statistical Package for the Social Sciences (SPSS) while data from key informants were analysed thematically. The study found that enterprise age, product diversification and proprietor’s education l evel and relatedness to fabrication work positively affected type of innovation. On the other hand, proprietor education and relatedness of work experience to fabrication correlated positively to degree of novelty. It also established that MSEs implemented innovations involving use of alternative materials ; material saving measures; producing products capable of using varied energy sources; and producing products capable of multiple functions. These innovations were driven mainly by market and cost consider ations. The correlation between extending product range and type of innovation was both positive and significant while meeting customer specification and replacing out - dated products negativ ely affected degree of novelty. The study also revealed multiplici ty of linkages and sources of innovation ideas. The effect of sourcing ideas from personal contacts on novelty was both negative and significant. Linking with competitors and technical consultants significantly correlated with type of innovation. Generally , MSEs tended to adhere to and draw deeply from a small number of external links for novel innovations but used many links to make significant product improvements. Nature of link with competitors and R&D organizations significantly correlated with type of innovation while nature of link with customers was significant for novelty. Generally, a proactive search of ideas had a positive effect on product innovation. In particular, a directed search of personal contacts was significant for type of innovation. The study concludes that external linkages and product innovation in food processing equipment fabrication sector are pervasive. However, in spite of their realities, MSE s largely innovate in an unsupportive environment. The study recommends that governme nt (through its agencies) and other actors in innovation need to perform facilitative and intermediary role s . Accordingly policies aimed at enhancing innovativeness in the sector should seek to promote linkages between the MSE s and other actors in the nati onal system of innovation.