The National Institute of Higher Education, Research, Science and Technology (NIHERST) conducted a national survey of innovation in the information and communication technology (ICT) sector, 2012.
The results of the survey should provide insights into the innovation process and assist decision makers in developing policies to create the environment and incentives to catalyse innovation in the industry.
Summary of Main Findings
- Of the total establishments that responded to the survey, 15 (44%) were between 10 - 19 years of age while 14 (41%) were less than 10 years, and 5 (15%) were 20 years and over.
- A half of the establishments (50%), especially establishments (67%) in operation for 10 -19 years, employed less than 10 persons while 41% employed between 10-49 persons, and 9% employed 50 persons and over.
- A relatively larger proportion (35%) of establishments was in the wholesale and retail trade sub-sector compared to 29% in data processing, hosting and related activities; 15% in computer programming, consultancy and related activities; 12% in telecommunications; and 9% in repair of computers and telecommunications equipment.
- Overall, 50% of the responding establishments from the industrial groupings surveyed employed less than 10 persons, 41% employed between 10 - 49 persons, and 9% 50 and more persons.
- The majority of establishments, overall (79%) and in most sub-sectors, was local and privately owned while 15% were wholly owned by a foreign corporation, and 6% were foreign private/local private joint venture arrangements.
- The ICT sector, in general, reported growth in employment between 2010 and 2011. Overall, a half (53%) of the establishments indicated that employment had increased between 2010 and 2011 while 15% reported a decline and 32% showed no change in employment.
- One-fifth (21%) of the respondents in ICT employed less than ten scientists and engineers while 15% employed between 10 – 49, and 6% employed 50 and over.
- Approximately two-fifths (38%) of the establishments reported sales of between $1m - $5m in 2011 while 35% recorded sales of less than $1m, and 12% reported more than $100m.
- The majority (62%) of the respondents in all sub-sectors experienced growth in sales between 2010 and 2011, while 24% recorded decreases and 15% indicated no change in sales.
- Only 15% of the establishments exported while a significant percentage (85%) provided goods and services for the domestic market only in 2011.
- Five (15%) of the establishments that participated in the survey had licensing contract for product or process technology.
- One-third (32%) of the respondents, especially in telecommunications (75%), indicated that they were sub-contracting for another establishment.
- A significant percentage (71%) of the respondents were not outsourcing while 27% stated that they were. The highest frequency of establishments outsourcing by industry was observed in telecommunications (50%) followed by wholesale and retail trade (33%).
- Overall, 68% of the establishments purchased new machinery and equipment during the period 2010 - 2011. A substantial proportion (61%) of establishments acquired new machinery and equipment from both local and foreign markets, 26% from abroad only and 13% locally.
- Over a half of the establishments in the ICT industries introduced a new product (59%) and improved an existing product (56%) while approximately a quarter (24%) reported development of a new product during the 2010-2011 reference period.
- Sixty-two percent (62%) of the establishments were engaged in technological process innovation consisting of the improvement of existing processes and introduction of new processes (50%).
- Various types of organisational innovations undertaken included the introduction/improvement of: maintenance routines and systems (62%), quality assurance systems (59%), in-house training programmes (56%), and changes in management systems and techniques (53%). Approximately a third of the establishments implemented major changes in organisational strategy and structure (35%) and introduced/improved waste management procedures (32%) while one-fifth (21%) improved plant layout.
- Marketing innovation included the implementation of marketing methods and the development of new markets at home and abroad. A substantial percentage (53%) of the establishments in the ICT sector had introduced new marketing techniques in the 2010/2011 period, while 38% and 15% developed new markets at home and abroad respectively.
Driving Forces and Obstacles to Innovation
- Improving customer satisfaction was cited as a major reason for innovating, in that 71% of the respondents indicated that it was very important. Over a half of the respondents rated increase market share (59%), improve product quality (56%) and improve productivity (53%) as very important reasons for innovating. Approximately two-fifths of the establishments rated extend product range (41%), deal with new competitors at home (41%), reduce production costs (38%) and improve working conditions (38%) as very important. Additionally, a third (35%) of the respondents indicated that developing more environmental-friendly products and processes was very important for innovating. The lowest rating was assigned to dealing with new competitors abroad, in that 44% of the respondents indicated that it was not important.
- Financing (47%) was identified as the most significant obstacle to innovation. A quarter or more of the respondents cited high cost of the innovation project (29%), domestic economic conditions (27%) and skilled/qualified personnel (24%) as very significant barriers to innovation. Additionally, 18% and 24% of the respondents rated weak customer demand as very significant and moderately significant respectively. Administrative/approval process within the firm (53%), information on technology (53%) and external technical support (47%) were not relevant/appropriate, and approximately two-fifths expressed a similar view with regards to lack of information on markets (41%) and legislation (38%).
Linkages and Collaboration
- The majority of establishments in the ICT sector identified their establishments (71%) and customers (65%) as very important sources of information on innovation. Two-fifths of the respondents cited suppliers of equipment, material and components or software (41%), and business and industry associations (38%) as very important while a third (32%) assigned a similar rating to government or public research institutes. Fairs, exhibitions, conferences (53%), professional journals and trade publications (47%), and education and research institutes (35%) were considered mainly moderately important sources of information.
- In general, the establishment was identified as the main source of information on product, process, marketing and management innovation. Customers (56%) and suppliers of equipment, material and components or software (56%) were identified as the leading sources of product related information. The main sources of process related information were within the establishment (38%), customers (29%) and suppliers of equipment, material and components or software (27%). With respect to marketing related information on innovation, the establishment (47%) and business and industry associates (47%) were cited as key sources. Most establishments (41%) accessed management related innovation information internally.
- Over two-fifths of the establishments were engaged in co-operative and collaborative arrangements with customers (44%) and suppliers (41%) while 29% and 24% had such arrangements with government ministries, and consulting and marketing firms respectively. Accessing critical expertise (47%) and new markets (47%) were identified as the major reasons for collaboration while approximately two-fifths in each case cited accessing research and development (41%) and distribution channels (38%).
Impact of Innovation on Key Performance Indicators
- The majority of respondents indicated that innovation resulted in increased service quality (71%), productivity (65%) and competitiveness (62%). Forty-seven percent (47%) in each case recorded increases in profitability, cash flow and employment while one-third (32%) registered an increase in market share. However, a substantial percentage reported that innovation had a negative impact on diversification (59%), product differentiation (59%), compliance and regulations (41%) and the environment (38%).
Research and Development
- Overall, a quarter (27%) of the establishments had undertaken research and development activities while 62% responded negatively. Seven establishments (21%) utilised confidentiality agreements to protect their intellectual property, while four (12%) in each case utilised trademarks and trade secrets.
Information and Communication Technology (ICT)
- Almost all (97%) of the respondents, including all sub-sectors, utilised the Internet. The vast majority of establishments utilised the Internet for email (97%), searches on the world wide web (92%), advertising through a home page (82%) and e-commerce (74%).
Government Support Programmes
- Government support programmes for innovation were accessed by only two (6%) of the responding establishments.