Market innovation for economic diversification in Lagos: A resource-based perspective

Abstract

In recent times, economic diversification of economic activities or markets is a crucial issue in order to develop a non-oil tradeable sector in most developing economies. Hence, this study investigates the approaches to market innovation by Knowledge-Intensive Business Services (KIBS) for economic diversification in a developing economy, based on the Resource-Based View (RBV). KIBS are broadly consultancy and problem-solving firms which performs for clients or clients –firms the services that are highly intellectual and value-added driven. A framework is built in which KIBS employed invention, extension, duplication and syntheses approaches for market innovation to diversify. A survey was carried out in Lagos, Nigeria with the sample frame consisting of 1788 KIBS. A systematic random sampling method was employed for sample selection. Data was collected from 840 KIBS sector and analysed using descriptive statistics, Principal Component Analysis, Pearson-Moment correlation and multiple linear regressions. The findings indicate that the four approaches are significantly related to market innovation; however, duplication is the most frequently used. The result would assist in framing programs to encourage market innovation by KIBS in developing economies. It is therefore, among others suggested that there should be sensitization programme for the public and law makers on the relevance of KIBS for economic diversification as well as policy makers to provide supportive structures and infrastructures for KIBS innovative activities in a developing economy.