Investigating the drivers of product innovation in emerging markets: The African perspective

• Author: Dennis Y. Dzansi,Victor Y. Atiase
• DOI: http://doi.org/10.1002/jsc.2313
• Date: 01 January 2020
• Published date: 01 January 2020

RESEARCH ARTICLE

Investigating the drivers of product innovation in emerging

markets: The African perspective

Victor Y. Atiase

1,2

| Dennis Y. Dzansi

2

1

International Centre for Transformational

Entrepreneurship, Coventry University,

Coventry, United Kingdom

2

Central University of Technology Free State,

Bloemfontein, South Africa

Correspondence

Victor Y. Atiase, International Centre for

Transformational Entrepreneurship, Sir William

Lyons Building, Gosford Street, Coventry

University, Coventry CV1 5DL, UK.

Email: ac8946@coventry.ac.uk

Abstract

African firms have made significant progress in product innovation over the past

decade through human capital development efforts and firm competitiveness.

Undoubtedly, both human capital development and firm competitiveness have

become the main source of strength for product innovation initiatives among African

firms. However, these firms need to continuously focus on talent hunting and devel-

opment as well as promoting strategic collaborations to reap the full benefit of prod-

uct innovation activities.

1|INTRODUCTION

In today's globalized and competitive business environment, the most

strategic, successful, and forward-looking firms are driven by product

innovation in their anticipation to meet the changing taste and sophis-

tication of their clients (Fossas-Olalla, Minguela-Rata, López-

Sánchez, & Fernández-Menéndez, 2015; O'Regan, 2012). The

Schumpeterian endogenous growth model argues that innovation is

an important dimension for industrial competition and firm growth

(Schumpeter, 1934). Typically, product innovation is a measure of a

country's potential to generate new products as well as the ability of

its firms to adapt and absorb suitable technologies (GEDI, 2017).

Product innovation also refers to the development of new and

improved products through designs or redesigns and its successful

market penetration to meet the needs, wants, and taste of consumers

(Valencia, Valle, & Jime'nez Jime'nez, D., 2010). Product innovation is

even more crucial for firms which operate in emerging markets where

there are visible weaknesses in technology, patency, market stability,

and a host of other infrastructural challenges. Therefore, product

innovation is recognized as a source of profitability, productivity, and

growth (Li, Wang, Li, & Zhao, 2007; Valencia et al., 2010). Product

innovation also increases a firm's ability to capture both local and for-

eign markets (Lentz & Mortensen, 2016). Apart from demonstrating

tangibility for innovativeness, product innovation is also seen as one

of the critical means of corporate renewal, survival and strategic fore-

sight without which firms are likely to exit markets once dominated

(Acemoglu & Dan, 2015; Engelma, Fracass, Schmidt, & Zen, 2017;

Paliokaitė, Pacˇėsa, & Sarpong, 2014).

Even though there has been so much discussion about product

innovation in the business circles, research regarding its key drivers

remains unclear and there is conflicting evidence in the literature particu-

larly for emerging markets (Ferna'ndez-Mesa, Alegre-Vidal, Chiva-

Go'mez, & Gutie'rrez-Gracia, 2013). More importantly, very little is

known about these drivers in the context of Africa where there are mar-

ket inefficiencies and other logistical constraints (Atiase, Mahmood,

Wang, & Botchie, 2018). Globally, the competitive business environment

shaped largely by globalization, technological evolution and accelerated

product life cycles coupled with high consumer expectations has become

the driving force behind product innovations (Costa, Fernández, & Dorr-

ego, 2014). Alegre, Lapiedra, and Chiva (2006) argue that product inno-

vation has become an important aspect of firm survival for three main

reasons. First, there is an intense international competition which

domestic firms need to rival with. Second, the ever-demanding and

changing nature of consumers is a driving factor. Finally, the technologi-

cal advancement which has dominated both domestic and international

markets have provided the driving force for product innovation. This

implies that firms that are able to offer products to meet the needs and

wants of their target customers are likely to strongly position themselves

and enjoy a lot of competitive advantage over their peers.

The innovation literature is replete with various drivers which are

essential for the innovative capacity development of firms. Organiza-

tional talent and skill, culture, industry competition, available collabo-

rative networks and alliances, offshoring, suitable technology,

research and development (R&D), input from users are just a few of

JEL classification code: 015031032055.

DOI: 10.1002/jsc.2313

Strategic Change. 2020;29:89–101. wileyonlinelibrary.com/journal/jsc © 2020 John Wiley & Sons, Ltd. 89