Abstract
Abstract
This study explores the levels of and barriers to entrepreneurial innovation (EI) and competitive advantage (CA) in emerging economies, and situates the findings within the Nigeria’s global innovation ecosystems. A qualitative research approach is preferred relying on the secondary data extracted from the reports of Global Competitiveness Index (GCI) and enriched by scholarly works including insights from the reports of Global Entrepreneurship Index (GEI). The extracted data from the afore-mentioned sources were critically reviewed and analysed using content analysis to understand the connection between EI and CA. At the end of the analysis, the study found that for 10 years (2008–2017), Nigeria manifested low EI and CA on the GCI ranking, whereas other African countries such as Ghana, Cameroon and South Africa, with lesser economic resources, did comparatively better. Second, it was found that, the key barriers to EI and CA are infrastructural neglect, lack of strong regulatory institutions, weak macroeconomic environment, weak technological readiness, poor business sophistication and low innovation among others. The study improves understanding of theoretical, managerial and policy implications of EI and CA. It also provides appropriate strategic suggestions for stimulating EI and enhancing CA at both national and industry levels in Nigeria. The study contributes to the raging debates on EI and CA in emerging economies. It also supports the Schumpeter’s creative discovery theory and resource-based view of CA.
Introduction
The quest for economic growth and attainment of global competitive advantage (CA) propelled forward-looking nations to formulate policies, and therefrom launch disruptive programmes to stimulate entrepreneurial innovation (EI) at local, regional and national levels (Autio, Kenney, Mustar, Siegel, & Wright, 2014; Baumol, 2002; Grimaldi, Kenney, Siegel, & Wright, 2011). Some of the disruptive programmes launched in different climes to stimulate EI include technology-based incubators/accelerators, the United States’ Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR), Britain’s Science Enterprise Challenge, France’s Law on Innovation and Research to Promote the Creation of Innovative Technology Companies, EU’s European Knowledge Transfer Association and other nations created a set of formal institutions called entrepreneurial support networks or government support agencies that provide business development services to entrepreneurial firms at different phases of formation and growth (Autio et al., 2014; Kenney & Patton, 2005; Mustar & Wright, 2010; Raimi, Shokunbi, & Peluola, 2010).
In support of the foregoing, literatures and practical realities across the globe point to the fact that EI stimulates CA in the global market domain because innovative products, services, technologies and processes most often have CA and wider acceptability over less innovative ones. Looking at Nigeria and its diverse resources within the global knowledge economy, it is obvious that the public and private sectors have really not embraced different forms of innovations for greater competitiveness when compared with the developed countries (Radwan & Pellegrini, 2010). Although there are some exceptions in the country, where EI has been systematically applied and exploited to gain some degree of CA. One of such is the Nigerian Nollywood film industry. The phenomenal success recorded by the Nollywood industry leveraging traditional innovations within its capacity has proven that EI that gave developed countries CA cannot be exclusively used as standard metrics for emerging economies because innovation is not a monolithic term rather it is a process that is flexible, context-specific, country-specific and largely dependent on time and space (Autio et al., 2014; Parrilli & Heras, 2016). It is instructive to state that entrepreneurial activities seen to be innovative in developing contexts may not be innovative in developed contexts. Even, the Global Entrepreneurship Monitor (GEM) survey reported that many new entrepreneurial ventures are not innovative at all. Specifically, the survey indicated that across 80 countries investigated, on an average, only less than 30 per cent of the new ventures reported that their products were innovative across countries (Autio et al., 2014).
For the emerging economies to gain CA, there is a need for innovation diffusion, dissemination and implementation at both national and industry levels (Greenhalgh, Robert, Macfarlane, Bate, & Kyriakidou, 2004). Particularly, Nigeria has an ambitious vision of emerging as one of the top 20 economies in the world by 2020. To actualise this vision, it is necessary to leverage knowledge, productivity and innovation for sustainable competitiveness within the powerhouse of the 21st century (Radwan & Pellegrini, 2010).
From the foregoing, EI is a requisite for CA. When innovation is linked with entrepreneurship, it systematically leads to new technology adoption as businesses and service providers would compete to catch up with one another by deploying state-of-the-art facilities and technologies for sustainable growth and development (De Mel, McKenzie, & Woodruff, 2009). Scholars discussed the economic and technological contributions of innovation to national development (Longenecker et al., 2006; Wong, Ho, & Autio, 2005). Specifically, Wolf (2006) explained that improvement in the entrepreneurial productivity of small and medium enterprises (SMEs) is strongly connected with their propensity to innovate, adopt new technologies and adapt innovative process to local conditions. Therefore, innovation is required by entrepreneurs to gain CA in the contemporary changing business environment. Viewed from cause-effect relationship, the birth of entrepreneurship emerged when innovated products, services, processes and technologies are fully developed and commercialised within the market domain. While, innovation involves the implementation of creative ideas and novelties arising from the ideation phase (Zhou & Shalley, 2011), entrepreneurship, on the other hand, is the application of creative and innovative ideas to new business ventures; it extends to the creation of new markets, new products and services, and new firms (Eckhardt & Shane, 2003).
Within the Schumpeterian creative destruction theory, innovation connotes creating new sources of CA within the market domain, by substituting, improving, renewing and fabricating new products, services and processes, thereby leveraging entrepreneurial opportunities (Nițu-Antonie, Feder, & Munteanu, 2017). The implication of the foregoing is that EI is important for corporate survival in the business world, where there is intense competition among producers and service providers. The slogans in the competitive marketplaces in Britain and the United States is ‘Innovate or Die’ (Costa, 2014). Theorists and analysts have written extensively on innovation and technology adoption in the developed context but studies on innovation in the developing context are few. Also, in-depth attention has not been given to investigating factors influencing innovation at both national and industry levels as well as the barriers against innovation in developing countries in Africa (Jegede, Ilori, Sonibare, Oluwale, & Siyanbola, 2012). This study builds on the skewed previous studies on innovation in the context of developing countries (Jegede et al., 2012; Radwan & Pellegrini, 2010; Williams & Woodson, 2012). The consistent low ranking of Nigeria on the GCI for a number of years provides another need for this study.
Apart from the introduction, this exploratory study has four other parts. The second part focuses on literature review and theoretical framework on EI and CA. It extends to the critique of Schumpeter’s creative discovery theory and resource-based view (RBV) in connection with the exploit of the Nigerian Nollywood film industry. The key barriers to EI and CA are also discussed. The third part discusses the research methodology, particularly the justifications for adopting a qualitative research method for the exploratory study. The fourth part explicates the results/findings of the study and discussions. The final part of the article concludes with summary of findings, research implications and suggestions.
Research Questions and Theory Building
From the foregoing introduction, this exploratory study examines the following two research questions (RQs):
RQ1: What are the levels of EI and CA in Nigeria? RQ2: What are the key barriers to EI and CA in Nigeria?
The above RQs are suitable for an exploratory study in an emerging developing context like Nigeria. Besides, this study does not intend to test hypotheses or propositions rather it attempts to understand Nigeria’s levels of EI and competitiveness. The outcomes of the study would obviously enrich existing body of knowledge and theories in both fields.
Literature Review and Theoretical Framework
Entrepreneurial Innovation
Entrepreneurship is the application of creative and innovative ideas to new business ventures; it extends to the creation of new markets, new products and services, and new firms (Eckhardt & Shane, 2003). Innovation, on the other hand, is a precursor to entrepreneurship because products, services, processes and technologies systematically emerge from innovative thinking and thoughts. The birth of entrepreneurship is said to have emerged when innovated products, services and processes are commercialised within established market domain. Discussion on innovation has gained prominence in academic and policy circles in recent times for a number of reasons: (a) the innovative firms are interested in innovation because it is akin to being competitive as well as being able to deliver new products, improved services and enhanced processes to meet changing tastes and preferences in the market domain, (b) the consultants seek contracts by persuading companies to adopt new innovation models for sustainability of their operations, (c) the policymakers/politicians embrace innovation to help in the design of innovative policies which impinge positively on their popularity and credibility and (d) the international organisations are interested in innovation for continental superiority judging by the creation of several research institutions and centres teaching and conducting research in various innovations (Christensen & Raynor, 2003; Fagerberg, 2004; Fagerberg & Verspagen, 2009).
Conceptually, innovation is the structured implementation of creative ideas and novelties arising from the ideation phase (Zhou & Shalley, 2011). Besides, McAdam, McConvery, and Armstrong (2004) described innovation as harnessing resources available for the purpose of coping with constant changes in the business environment. Kinicki and Williams (2010) viewed innovation as finding novel ways and means of delivering new, improved, better goods or services to the people and society. When innovation is amplified as EI, it extends to the creation by corporate enterprises or something new in the marketplace that alters the prevailing supply–demand equation for goods, services and processes.
Innovation is therefore the key to survival in the contemporary business world, where intense competition dominates the global business environment. Therefore, all novel industrial activities that businesses adopt for competitiveness in the marketplace are considered as innovations. Whereas, Goswami and Mathew (2005) understood innovation as effort which manifests in the forms of inventing a new object, idea generation, improvement on existing item, spreading new ideas, and adoption of something new but tested elsewhere, doing something in a new way, making a change, attracting innovative personnel into the organisation and examining things from new perspectives. Embedded in the various definitions above is the categorisation of innovation into technological and organisational innovations. The technological innovation focuses on application of state-of-the-art technology for reinventing and reshaping new product or process of production, while the organisational innovation is strictly concerned with new administrative or marketing techniques as well as improved internal and external relations. Furthermore, the technological innovation is linked to science-based high-tech companies across the globe, and the organisational innovation is common with low-tech market-niche companies that offer range of products and services (Aubert, 2005; Tang & Le, 2007).
From a different perspective, EI can be triggered in the economy at large or at workplaces in several ways, namely bottlenecks in the production lines, changes in technology, competitive conditions in the economy, international rules or domestic regulations propelled by globalisation, environmental or health crises in workplaces and planned/unplanned wars (Dosi, 1988; Jegede et al., 2012).
On the classification of the determinants of innovation, Jegede et al. (2012) identified technological and non-technological factors as determinants of innovation and competitiveness in Nigeria. Technological factors include educational qualifications, training and prior work experience of the heads of technical department, number of R&D staff and training, innovation and R&D investment. The non-technological factors included interaction with competitors, consumers, suppliers and training institution.
With regards to typologies, Kuratko and Hodgetts (2004, 2007) identified four basic types of innovation, namely invention, extension, duplication and synthesis. Invention is process of creating new product, service or process. Extension relates to innovation that incorporates a new application of existing product, service or process. Duplication is a creative replication of existing product, service and process; and synthesis is a type of innovation that relates to combination of existing concept and factors into a new formulation. The OECD’s Oslo Manual identified product, process, marketing and organisational innovations as the four classification types (Camisón & Villar-López, 2014). Other scholars posited that process, product and management innovations are the three typologies in the business environment (Madrid-Guijarro, Garcia, & Van Auken, 2009). Moreover, all previous scholarly works on EI were anchored on innovation theories.
Therefore, the theory that underpins EI in this article is Schumpeter’s creative discovery theory. The creative discovery theory, which originated from Joseph Schumpeter in 1954 underscores the fact that technological advancement through dynamic innovations, new products, new processes, new technology, new markets and new firms stimulate economic growth (Diamond, 2006). The creative destruction theory provided explanations for improved industry-level performance, increased economic growth rates, strong financial system development, higher per capita GDPs, accounting standards and property right protection (Chun, Kim, Morck, & Yeung, 2008)
Competitiveness and Competitive Advantage
Globalisation has made CA a front-burner issue in the academic and professional circles. The developed and emerging economies systematically compete with one another at the level of international trade to gain competitiveness. Competitiveness has for long occupied the attention of scholars, practitioners and international institutions (Porter, 1990; Porter, 2001; Woodruff, 1997; World Economic Forum, 2014, 2017). Discussion of CA is often discussed at two levels—national and industry. According to Onyemenam (2004), competitiveness occurs at two basic levels—national and industry levels of competitiveness. National level competitiveness is understood as a situation where a nation has in place sound economic policies that propel private sector as engine of growth within a free market system supported with strong institutions, infrastructure and technological progress. Industry-level competitiveness however concentrates on the capacity of businesses to operate profitably while growly on a sustainable basis.
To the World Economic Forum (2016b), competitiveness at the national-level context refers to set of institutions, policies and factors that determine the level of productivity of a country. The level of productivity subsequently attained by the country determines the degree of economic prosperity and rates of return from investments, which are the fundamental drivers of growth rates in the economy. Porter (2001) asserted that a nation does not become competitive because of its abundant natural resources, labour pool, interest rate, the value of its currency as often advocated by classical economists—rather a nation’s competitiveness is tied to the capacity of its industry to innovate and upgrade its methods, processes and technologies to meet the taste and preferences in the market. Woodruff (1997) had long shared the same view, that for organisations to survive, they need to search for new ways to achieve their corporate goals to retain CA within a constantly changing business environment. CA at both national and firm-level presupposes access to certain resources—this is the hallmark of RBV (Barney, 2001).
Scholars explained that the RBV, which originated in the 1970s from Jeffrey Pfeffer and Gerald R. Salancik, is premised on the idea that resources are critical to an organisation’s success and that timely access and sustainable control over resources is the foundational and rational justification for why some businesses consistently outperform others, that is, enjoy CA (Barney, 2001; Hillman, Withers, & Collins, 2009). By extension, if countries and strategic firms must maintain CA over their competitors, they must acquire ‘the resources and capabilities needed to conceive of and implement strategies in imperfectly competitive strategic factor market’ (Barney, 2001, p. 646).
Therefore, RBV is a rational argument for exploiting opportunities better than others to create and nurture new businesses in developing markets (Baliamoune-Lutz, 2007; Raimi et al., 2016). In other words, if business enterprises must forge and maintain CAs over their competitors in the operating business environment, they must acquire ‘the resources and capabilities needed to conceive of and implement strategies in imperfectly competitive strategic market’ (Barney, 2001, p. 646). Scholars prescribed five options to firms seeking to sustain their power and minimise resource dependences in their quest to remain in business. These options are: (a) mergers or vertical integration, (b) joint ventures and other inter-organisational relationships, (c) forming a board of directors, (d) political action and/or (e) executive succession (Barney, 2001; Hillman et al., 2009).
From the foregoing discussion, RBV when applied to the Nigerian socio-economic and cultural contexts, presupposes that local entrepreneurs require access to massive resources, competence and dynamic capability to gain immediate and/or long-term CA (Raimi & Aslani, 2019). For entrepreneurs operating in the developing context to maintain their relevance in the formal sector, they must acquire ‘the resources and capabilities needed to conceive of and implement strategies in imperfectly competitive strategic market’ (Barney, 2001, p. 646) because these resources and capabilities are critical to entrepreneurial growth and sustainable development. Proponents of RBV identified tangible and intangible resources as sine qua non to CA (Barney & Hesterly, 2006; Knott, 2009). Tangible resources are physical assets at the beckon of organisations such as machines and state-of-the-art equipment but the intangible resources include knowledge, skills, capabilities/competencies, human assets, information, relational and reputational assets (Hill, Jones, Galvin, & Haidar, 2007). Both tangible and intangible resources must be well integrated for optimal performance but oftentimes the intangible resources give unique character to the entrepreneurs and consequently creates CA. There is a distinction between static and sustainable CAs. For resources to offer a long-term CA or what is otherwise called sustainable CA, they must have four unique attributes: (a) they are valuable, (b) they are rare, (c) they are imperfectly imitable and (d) they are non-substitutable (Barney, 1991, 1995; Lockett, Thompson, & Morgenstern, 2009). It is widely-believed that entrepreneurs in developed countries maintained CAs over their counterparts in a developing context because of unhindered access to tangible and intangible resources. This argument is not completely factual because in the developed countries, ethnic entrepreneurs of different nationalities thrive both in formal and informal economies despite all odds.
For instance, it is reported that ethnic entrepreneurs contribute economically to the process of urban renewal and revitalisation of neighbourhoods in developed countries by reviving resuscitation of industries and businesses abandoned by indigenous and foreign entrepreneurs thereby assisting in giving a new lease of life to their host communities. They were able to achieve these feats through specific skills, knowledge and social capital that gave them a comparative advantage (Raimi & Aslani, 2019; Rath, 2002; Waldinger, 1986). Specific examples abound in the literatures. In the garment industry, it is reported by Rath (2010) that ethnic entrepreneurs have succeeded in developed clime because they applied production techniques and skills that are no longer being used in developed economies but which are still valued by a number of people and groups in their host countries. In the Nigerian movie industry despite the absence of innovation, capital, capabilities and several other odds against local entrepreneurs and artists, they maintain CA.
Critique of Schumpeter’s Creative Discovery and RBV
In this section, an attempt is made to critique Schumpeter’s creative discovery theory and RBV with a view to either confirm or refute these theories when viewed in connection with the Nigerian Nollywood film industry. In retrospect, the Schumpeter’s creative discovery theory posits that technological advancement through dynamic innovations, new products, new processes, new technology, new markets and new firms stimulate economic growth (Diamond, 2006), while the RBV states that access to massive resources, competence and dynamic capability are inevitable to gain immediate and/or long-term CA (Raimi & Aslani, 2019). In other words, entrepreneurs operating in any context must acquire ‘the resources and capabilities needed to conceive of and implement strategies in imperfectly competitive strategic market’ (Barney, 2001, p. 646) because resources and capabilities are critical to entrepreneurial growth and development. How relevant are these two propositions when view in connecting with the experiences of Nigeria’s Nollywood film industry?
The Nollywood film industry emerged in the 1990s in response to basic economics of survival in the face of the difficulties inflicted by the structural adjustment programme (SAP) in Nigeria (Ezeonu, 2013). For decades, the theatre, cinema houses and film production outlets had well-established presence with impressive performance and growing revenues in Nigeria but the SAP changed the fortune of the industry and other segments of the society leading to massive loss of jobs, closure of cinema houses due to poor patronage, downturn in marketing of foreign films, placement of embargo on foreign products that can be produced locally by Nigerian entrepreneurs, worsening living condition, drop in the living standards of small income earners, upsurge in crime, hopelessness, escalated cases of industrial actions (strikes and lockouts), upsurge in migration to developed nations otherwise called brain-drain, survival by hook or by crook, devaluation of the local currency to boosts exports, inflation, deepening of unofficial trade across Africa’s borders, removal of subsidies on public goods (education and healthcare), abject poverty and social insecurity (Ezeonu, 2013; Meagher, 2003; Raimi et al., 2014). In coping with the harsh economic conditions imposed by the SAP, a number of innovative entrepreneurs selling foreign movies mooted the idea of recording indigenous movies (home videos) in a bid to circumvent a potential business loss in the film industry. The idea paid-off with the successful release of several home videos (Ezeonu, 2013; Jedlowski, 2013). The creative and innovative introduction of home videos into the Nigerian Film industry at the peak of an economic downturn is supported by the Schumpeter’s creative discovery theory. Creative discovery was demonstrated when the local producers and marketers of films advanced the film industry technologically in the 1990s through production of home videos to replace banned foreign films; and they switched from VHS technology as time progresses to VCD/DVD technology using new local contents, simple processes, affordable technology and creating new markets in Nigeria and across Sub-Saharan Africa—an innovative strategy that stimulated economic growth in the Nigeria film industry.
Furthermore, the RBV, which emphasises firm’s competitiveness is also relevant to Nigeria’s Nollywood industry. As discussed above, Nollywood has continued to flourish in spite of the CA of America’s ‘Hollywood’ and India’s ‘Bollywood’ in the global movie industry because Nigerian film entrepreneurs decided to reinvent an innovative and a flourishing style of film production and distribution that is flexible, cheap and appealing to the customers in Nigeria and across Africa (Ezeonu, 2013; Jedlowski, 2013). A number of studies noted that Nigeria’s Nollywood film industry is the third globally ranked movie industry producing an average of 2,000 movies annually (Evuleocha, 2008; Madichie, 2010). Besides, other scholars reported that Nollywood industry produces the second largest number of titles globally, and that in spite of the fact that it has less CA in the ‘global North’; it maintained very high CA in Sub-Saharan Africa including the global African diaspora. Consequently, it has eclipsed Hollywood and Bollywood across countries in Sub-Saharan African because its home videos dominate in the markets and they are widely featured on local screens (Jedlowski, 2013; Miller, 2012; Ondego, 2008; The Economist, 2010).
A salient question in this discourse is: How has the Nollywood industry been able to innovate, both technologically and structurally to enjoy CA in spite of all odds?
Facts and insights extracted from the critical review of literatures (see Evuleocha, 2008; Ezeonu, 2013; Jedlowski, 2013; Madichie, 2010; Miller, 2012; Ondego, 2008) indicated that unlike Hollywood and Bollywood films, Nigeria’s Nollywood has been able to innovate effectively, both technologically and structurally to gain CA in the following ways:
Nollywood strategically replaced the expensive culture of going out to watch movie in cinema houses in the cities with home video—a more convenient, cheaper and people-friendly culture of watching movie without leaving the comfort of one’s family’s compound or the local neighbourhood. Nollywood movies are not made for big screen in theatres or busiest cinema houses in cities, although some of their videos appear on terrestrial and satellite television including small screen venues in villages and cities. Nollywood industry avoided the luxurious, costly and grandiose production approach of global film industry, rather it thrives on velocity, low cost of production and informality with regards to recruitment, financing, marketing and distribution. The turn-around time for a movie is fast—an average of 10 movie scenes are shot within a day and maximum of two weeks for shooting a full movie. The movies are produced and sold to cross-section of the population in Nigeria and communities across Sub-Saharan Africa that are generally left out of dominant global Hollywood’s distribution plans. The Nollywood movies are sold as VCDs, DVDs and online downloadable materials. For sustainable patronage, the Nollywood movies in VCDs and DVDs are often serialised consisting of Parts I, II and III, the purchase of each series is not necessarily linked to other series. The movies are long enough and also appealing to the buyers and other end-users because they are of at least three hours in length (value for money spent). Nollywood film industry has the dynamic ability to change its strategies and distribution networks in the face of piracy and other environmental challenges that pose threat to its business sustainability.
The takeaway from the above critique of theories vis-à-vis the exploits of the Nigerian Nollywood film industry is that the types of innovations in the developed countries that gave their enterprises CA cannot be used as metrics for judging emerging developing economies. Innovation is not a monolithic term rather it is a concept that is flexible, context-specific, country-specific and largely dependent on time and space (Autio et al., 2014; Parrilli & Heras, 2016). It is therefore instructive to mention that what is deemed to be innovative in a developing nation may not be innovative in the developed nation and vice versa. The Nollywood film industry in Nigeria emerged in response to the harsh economic situation imposed by the SAP, and the industry’s phenomenal growth provides a good case study that entrepreneurship and innovations must not necessarily follow a one-hat-fits-all approach often prescribed in Western literatures and which is largely the metrics used in most global entrepreneurship measurement including the GCI.
Emerging Conceptual Framework of EI and CA
The relationship between entrepreneurship (E) and innovation is both historical and contextual (see Autio et al., 2014; Drucker, 2014; Garud, Gehman, & Giuliani, 2014). Baumol (2002) had long posited that EI represents true source of national CA, while Drucker (2014) noted that innovation is a specific tool and means of entrepreneurs for exploiting change (as an opportunity) in different business contexts. However, Teece (2012, p. 1398) stated that entrepreneurship is functionally about ‘sensing and understanding opportunities, getting things started’ (entrepreneurship aspect) and extends to ‘finding new and better ways of putting things together’ (innovation aspect). It is about creatively coordinating the assembly of disparate and usually cospecialised elements.
At the industry-level analysis, previous studies found that innovation serves as a catalyst for improving competitive positioning/comparative advantages, value-creating innovation and transformation of markets in developed countries context (Covin & Miles, 1999; Lumpkin & Dess, 1996; Rasmussen, 2010). Also at the national-level analysis, EI is systematically linked with CA. This fact is visible in global ranking indexes of the GCI, the National Expert Survey (NES) and the GEI. For instance, the 12 pillars of GCI designed to measure the level of competitiveness of selected nations have long been identified and discussed in a number of empirical studies. Similarly, the NES developed by the GEM measures factors influencing entrepreneurial activity and economic development on a country-to-country basis (Raimi, 2015). The NES has nine dimensions called Entrepreneurial Framework Conditions (EFCs). Furthermore, the GEI developed by the Global Entrepreneurship and Development Institute (GEDI) measures qualitatively and quantitatively the degree of entrepreneurial activity on a country-to-country basis. The three entrepreneurial sub-indexes of GEI have 16 indicators divided into: (a) entrepreneurial attitudes of 5 indicators, (b) entrepreneurial activities of 5 indicators and (c) entrepreneurial aspirations of 6 indicators (Acs & Szerb, 2010; GEDI, 2018; Raimi, 2015).
Zahra and Wright (2011) examined the role of context in stimulating EI of different types of ventures and their impacts on performance. Another study that examined the impact of knowledge, business and financing systems on innovative outputs among networks of 138 innovative start-ups in Belgium (Flanders) found that disconnections between knowledge, business and financial systems have negative impact on the innovative output and survival of entrepreneurially innovative firms. In other words, knowledge, business and financial systems support EI and sustainable CA.

External and Internal Barriers to Innovation
From the foregoing literature review, the conceptual framework that explains the relationship between EI and CA, as well as the connections with environment and economic outcomes is clearly illustrated in Figure 1. The environment consists of political, economic, socio-cultural, technological, ecological and legal factors. The framework reinvents EI and environment as the drivers of CA and subsequently explains how CA stimulates positive economic outcomes in terms of economic growth, FDI, economic development and good ranking in the economy.
Key Barriers of Innovation and Competitiveness
There are a number of internal and external barriers that inhibit nations and organisations from embracing, adopting and adapting innovation in their production processes and in the delivery of services. Reliable studies established that internal and external barriers have for a long time stifle competitiveness in emerging economies including Nigeria. In the service sector in Mexico, the cost of innovation is a key barrier, as firms that have invested in innovation are reluctant to get the outputs of innovation commercialised because customers do not value improvements or changes made to services; they are unwilling to pay higher prices for innovated services. Consequently, most businesses that find themselves in this situation significantly reduce efforts dissipated into services innovation (Maldonado-Guzmán, Marín-Aguilar, & Pinzón-Castro, 2017).
In the United Kingdom, D’Este , Iammarino, Savona, and von Tunzelmann (2012) identified 11 key barriers to innovation adoption. These barriers have been classified into four broad factors namely: cost, knowledge, market and regulation factors. Cost factors include excessive perceived economic risks, direct innovation costs too high, cost of finance and availability of finance knowledge. Knowledge factors comprise lack of qualified personnel and information on new technology and market. Market factors incorporate market domination by established enterprises and uncertainty in the demand for innovative goods/services. Regulation factors include need to meet the UK government regulations and EU regulations. An earlier study by Hadjimanolis (2003) classified barriers to innovation into internal and external barriers as shown in Table 1.
With specific reference to Nigeria, the barriers hampering innovation adoption at the national and industry levels include inadequate funding of R&D. Resources appropriated for R&D expenditures in developing countries including Nigeria largely depends on organisation’s orientation about innovation otherwise called firm’s innovation strategy. Firms with positive innovation strategy appropriate huge budget for R&D, while those with negative innovation strategy do not give importance to R&D expenditures (Jegede et al., 2012).
Furthermore, other barriers to competitiveness in Nigeria are visible in the 12 pillars of the GCI used annually to determine national-level and industry-level competitiveness. Nigeria has consistently been ranked very low of the GCI, thus suggesting there are several barriers to competitiveness including innovation. The 12 pillars of competitiveness on which Nigeria has been poorly rated are: (a) well-functioning public and private institutions, (b) well-developed infrastructure, (c) stable macroeconomic environment, (d) healthy workforce with basic education, (e) higher education and training, (f) efficient goods markets, (g) well-functioning labour markets, (h) developed financial markets, (i) harnessing benefits of existing technologies, (j) large domestic or foreign market, (k) sophisticated production processes and (l) innovating new things (World Economic Forum, 2013, 2014, 2015, 2016a, b, 2017). Low ranking on the 12 pillars suggests that they are inhibiting barriers.
Methodology and Approach
In order to provide logical answers to the two RQs, this study adopts a qualitative research method—an interpretive research paradigm. This methodological approach is based on a triangulation of data sources, including scholarly articles, relevant online resources and secondary data. Essentially, the GCI reports for 10 years (World Economic Forum, 2008–2017) enriched by scholarly works including insights from the reports of GEI provided the secondary data for analysing the levels of EI and CA in Nigeria in comparison with three other African countries. Using content analysis, this study extracted the ranking scores of Nigeria and three African countries for a period of 10 years. For the second RQ, the study adopted 6 out of the 12 pillars of GCI as measurement of competitiveness because they fit better the focus of the research and also they are the most critical barriers judging by their ranking scores as shown in Table 4. The six most preferred and adopted pillar are institutions, infrastructure, macro-economic environment, technological readiness, business sophistication and innovation. Besides, the adopted six pillars were more-inclusive. The good market and labour market efficiency pillars are structurally captured by the business sophistication pillar. Whereas, the health and primary education, and higher education and training pillars fall operationally within the institutions pillar (health centres and three levels of education are institutions). The financial market development and market size are essentially macro-economic issues that have been accommodated under macro-economic environment pillar. Qualitative research methodological tradition supports the integration and harmonisation of pillars as done above. It has been argued that qualitative research assists in the development of an integrative theoretical framework for exploratory study (Ghalwash, Tolba, & Ismail, 2017; Saunders, Lewis, & Thornhill, 2012).
Results/Findings and Discussion
Level of Competitiveness
Level of Innovation
Table 3 indicated that for 2008, Nigeria was ranked 65th on innovation far behind South Africa ranked 37th, but better than Ghana (114th) and Cameroon (108th). For 2009, Nigeria was ranked 73rd, South Africa (41th), Ghana (115th) and Cameroon (102nd.). The low level of competitiveness was sustained in 2010, 2012 and 2013. There was a slight improvement in 2012 compared to 2011 when Nigeria was ranked 78th on innovation as against 82nd in 2011. For 2014, Nigeria was ranked 103rd on innovation behind South Africa (37th), Ghana (68th) and Cameroon (84th). The ranking worsened in 2015 as Nigeria was ranked 117th behind South Africa (38th), Ghana (65th) and Cameroon (79th). For 2016, Nigeria occupied 113th position behind South Africa (47th), Ghana (69th) and Cameroon (90th). For 2017, Nigeria occupied 112th position on innovativeness also behind South Africa (39th), Ghana (57th) and Cameroon (77th).
Comparatively, the findings from selected GEI reports were instructive. In the GEI reports, EI is represented as a pillar under entrepreneurial aspiration (ASP), while CA is a pillar under entrepreneurial abilities (ABT). Nigeria was ranked 74th overall on EI and CA in 2013 as against 51st, 94th and 98th for South Africa, Ghana and Cameroon, respectively (GEDI, 2014). For 2015, Nigeria was ranked 85th overall on EI and CA as against 52nd, 99th and 115th for South Africa, Ghana and Cameroon, respectively (GEDI, 2016). For 2017, Nigeria was ranked 101st overall on EI and CA as against 57th, 93rd and 121st for South Africa, Ghana and Cameroon, respectively (GEDI, 2018).
For the second RQ: What are the key barriers to EI and CA in Nigeria?, the answer emerged from both scholarly works and GCI reports. Specifically, Jegede et al. (2012) found that the key barrier to innovation at the national and industry levels in Nigeria is inadequate funding of R&D. This is because resources appropriated for R&D expenditures in Nigeria is a function of organisation’s orientation about innovation (firm’s innovation strategy).
Similarly, Oyinloye (2015) found that the key barriers to Nigeria’s competitiveness include: (a) huge infrastructure deficit especially high cost of doing business and non-focus on real sector growth, (b) poor educational and human capacity development system—lack of innovation and skilled labour force, (c) inconsistent fiscal policies where enterprises cannot plan long-term strategies for business efficiency, (d) weak legal and regulatory framework, which affect corporate governance and sanctity of contracts and (e) innate distrust and believe system in Nigeria, which affects productivity, investments decision and national orientation.
However, the GCI reports identified six critical pillars as key barriers to EI and CA. These barriers are: (a) inadequate infrastructure, (b) weak institutions, (c) weak macroeconomic environment, (d) low technological readiness, (e) Poor business sophistication and (f) poor innovation (GCI, 2008–2017). This finding is consistent with previous studies such as Mohnen, Palm, van der Loeff, and Tiwary (2008), Galia, Mancini, and Morandi (2012), Iammarino, Sanna-Randaccio, and Savona (2007), GCI (2014, 2015, 2017) and D’Este, Iammarino, Savona, and von Tunzelmann (2008). From Table 4, a review of the GCI reports for ten years showed that Nigeria’s overall performance on the 12 pillars of competitiveness was poor but its performance on some pillars was modest.
The 12 Pillars of GCI above were modified into 6 critical and more-inclusive pillars. The good market efficiency and labour market efficiency pillars have been captured by the business sophistication pillar. Whereas, the heath and primary education and higher education and training pillars are captured in the institution’s pillar (health centres and three levels of education are institutions). The last two pillars of financial market development and market size are essentially macro-economic issues; they have accommodated under macro-economic environment pillar. Summarily, the key barriers to EI and CA in Nigeria are infrastructural neglect, lack of strong regulatory institutions, weak macroeconomic environment, weak technological readiness, poor business sophistication and low innovation among others.
Discussions of Findings
Barriers to Entrepreneurial Innovation and Competitive Advantage
The second finding on key barriers hindering EI and competitiveness in Nigeria is supported by previous works. The study of Jegede et al. (2012) found that the barrier to innovation at the national and industry levels is inadequate funding of R&D. This is because resources appropriated for R&D expenditures in developing countries including Nigeria is largely dependent on organisation’s orientation about innovation (firm’s innovation strategy), as there are innovative organisations and non-innovative organisations. Innovative organisations give priority and importance to innovative practices as well as appropriate adequate funds for R&D expenditures. This is not the same with non-innovative organisations, where status quo is celebrated. Similarly, D’Este et al. (2012) found 11 barriers to EI in the United Kingdom. The identified barriers include excessive perceived economic risks, direct innovation costs too high, cost of finance and availability of finance knowledge (cost factors); lack of qualified personnel and information on technology and markets (knowledge factors); market dominated by established enterprises and uncertain demand for innovative goods/services (market factors) and need to meet UK government regulations and EU regulations (regulation factors). These barriers are similar in several respects with the six barriers identified by this study. It is also consistent with six inhibiting barriers found by Hadjimanolis (2003) some years back.
Conclusions, Practical Implications and Suggestions
This study sets out to explore levels of, and barriers to EI and CA in Nigeria within the global innovation ecosystems. Using a qualitative research approach relying on secondary data extracted from the reports of GCI and enriched by scholarly works including insights from the reports of GEI, the study found that for a period of 10 years (2008–2017), Nigeria manifested low EI and CA, whereas other African countries such as Ghana, Cameroon and South Africa with lesser economic resources did comparatively better. It was also found that the key barriers to EI and CA are infrastructural neglect, lack of strong regulatory institutions, weak macroeconomic environment, weak technological readiness, poor business sophistication and low innovation among others. The study improves understanding of theoretical, managerial and policy implications of EI and CA in the light of the phenomenal comparative advantage of the Nigerian Nollywood film industry leveraging indigenous innovation. Consequently, what is deemed to be innovative in a developing nation may not be innovative in the developed nation, and vice versa. The Nollywood film industry in Nigeria therefore refutes the one-hat-fits-all approach often prescribed in Western literatures on EI and CA. The study therefore affirms the Schumpeter’s creative discovery theory and the RBV. The article also proposes a conceptual framework that reinvents EI and environment as the drivers of CA, and subsequently explains how CA stimulates positive economic outcomes in terms of economic growth, FDI, economic development and good ranking in the economy. The next stage of this research is to subject the exploratory findings to empirical testing. This entails conducting a multiple regression analysis to explain the relationship between EI and some pillars of competitiveness leveraging the data sets of GCI and GEI. From the foregoing, the following policy suggestions are imperative for improving EI for CA in Nigeria.
There is need to embed EI and CA in the public and private sectors in Nigeria. This could take the forms of adopting and adapting novel technologies, new models and better processes from other parts of the world to the local situation or context. The policymakers in Nigeria should also encourage and promote innovative research and knowledge sharing between public and the private sector organisations. This collaboration is expected to improve the global ranking of Nigeria on GCI and GEI annually. Finally, it is suggested that there is need for increased funding to research institutions at the industry and national levels. Government is expected to play the leading role in funding innovative research, while the private sector organisations are expected to fund their respective R&D departments.
Footnotes
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.
Funding
The authors received no financial support for the research, authorship and/or publication of this article.
