Scroll to top
Recognizing Africa’s role in the global knowledge economy.

Understanding the Dynamics of Knowledge Transfer in Nigeria’s Otigba Hardware Cluster


Victoria Schorr - November 13, 2016 - 13 comments

By Oluseye Jegede

I am one of the case study researchers being funded as part of the Open AIR network. The case study I am conducting focuses on the Otigba Computer Village, in Lagos, Nigeria.

So what is the Otigba Computer Village? Oyelaran-Oyeyinka in 2006 described it as the biggest ICT hub of West Africa – perhaps the biggest ICT market in all of Africa – because of the size and the volume of business activities carried out on a daily basis within the cluster. The research I have been conducting looks at the knowledge dynamics at play in the informal ICT businesses in the cluster, with a view to understanding how these dynamics drive informal enterprises’ innovation and scaling-up. While other studies of the cluster have evaluated the size and capacity of the cluster, the evolution of the cluster, mode of operation, performance, sustainability and constraints, there are no studies looking at how the local businesses identify new and useful knowledge. With over 5000 businesses in the cluster, there is bound to be knowledge exchange either through spillover or conscious transfer. How is this happening?

img-20161019-wa0005

Otigba Computer Village, Picture by Oluseye Jegede

What do I mean by identify new and useful knowledge? My study is analysing what the main channels of learning new knowledge are: what are the processes for this knowledge to be developed inside the micro-level firms, how is this knowledge being spread, how do these businesses gain this knowledge, and what role are openness and networking playing in this production of new knowledge.

It is important to study these knowledge dynamics so we can better determine how to help these business to scale up. This scaling up need not be narrowly defined as the number of businesses in the market or the geographical reach of their products; it can also be identified in terms inputs (access to more finances, number of employees), activities (networking, innovativeness), outputs (turnover, quality, quantity) and impacts (compliance to international standard, technology upgrading and net export). By studying how these businesses acquire new knowledge and implement it in their businesses – as well as the cluster as a whole – we can better know what these businesses need to increase innovation and expand on these ideas. These businesses play a crucial role in job creation and often frugal innovation. By helping these businesses to not just survive but thrive, Nigeria can better meet the needs of the informal sector. As the informal sector is the main employer of both skilled and unskilled labour, helping these businesses to thrive will help in the development and diversification of Nigeria’s economy.

Some of Our Findings So Far

After designing and conducting a questionnaire for measuring these knowledge dynamics and collecting extensive first-hand evidence within these informal micro-enterprises, my research team and I are getting some interesting preliminary findings.

So far 73 interviews have been conducted and all have reported significant sharing of knowledge within the cluster. Most of the business owners in the cluster are of the opinion that there is mutual trust and cooperation among the enterprises in the cluster despite the competition among them. They report a high level of information exchange and sharing among business operators including cooperative behaviours such as tool & equipment sharing and leveraging on professionals within the cluster. In fact, from the interviews conducted so far, all the businesses said that they encourage knowledge sharing within their enterprises and in the cluster. Nevertheless, despite this high level of cooperation, business owners reported that they hardly ever entered into strategic technology alliances in order to jointly purchase expensive equipment or import inputs. Only 22% of the businesses interviewed reported being part of the trade association, the Computer and Allied Products Dealers Association of Nigeria (CAPDAN).

Otigba Computer Village, Picture by Oluseye Jegede

Otigba Computer Village, Picture by Oluseye Jegede

Much of the knowledge sharing that is happening is primarily carried out through owners forcing all employees, both new and experienced, to work together on assignments. While a combination of knowledge adoption methods and training (formal education, apprenticeships, and on the job learning) were important for businesses’ knowledge development, this cross-pollination of new ideas with experience can be an excellent way to accelerate innovations within these businesses. So far, we are finding that this use of mixed methods of learning is playing a significant role in skill acquisition and innovation.

In addition, our surveys indicate that the business owners and their employees have gained significantly from their competitors in the cluster. So far, 57.5% of enterprises surveyed indicated they gained significant knowledge from their competitors, 39.7% answered that they gained a small amount of knowledge, and only 2.7% said they have not learned at all from others in the cluster. Still, enterprises in the cluster do not venture into strategic technology alliances involving joint purchase of machinery, joint ventures, and other formal collaboration mechanisms. These findings are in agreement with Open AIR’s earlier work that open collaboration is more practiced in Africa’s informal sector businesses and that, for now at least, there is a clear preference for such mechanisms over formal intellectual property business protection tools.

Finally, we are also finding interesting preliminary results regarding how businesses are innovating within the cluster and how they are scaling up. Check back here for Part 2 in a few weeks to know more about these results. I look forward to seeing how my preliminary findings compare to those of my fellow Open AIR researchers’ as well as other researchers in the field.

img-20161019-wa0012

Otigba Computer Village, Picture by Oluseye Jegede