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Explaining the Innovativeness of Information Technology Products and Service Providers in an Information Technology Enterprise Cluster in Nigeria Abstract This study examined how traditional innovation predictors explained the capacity of information technology products and service providers in the Otigba Computer Hardware 7Cluster in Lagos, Nigeria to devise and harness new strategies of solving IT problems. Specifically, the study investigated the respondents’ capacity to acquire, assimilate, transform and use knowledge, and the relationship between these capacities and their innovativeness. Data was collected from 273 respondents with the aid of a questionnaire and an in-depth interview schedule. The study 1confirms the importance of stronger networking behaviour for the transfer of knowledge by showing that the respondents’ relationship with knowledge sources has strong relationship with their capacity to innovate, acquire, understand and use knowledge. Innovativeness among the operators in the cluster is not necessarily a function of the traditional innovation variables of absorptive, acquisition, transformation and exploitation capacities, among others. However, 3the capacity to transform knowledge into applications turns out to have a significant effect on the capacity of the operators to introduce new ideas, processes and techniques. Findings from the interviews however reveal that the information technology products and service providers are able to devise new ways of solving old and new IT problems especially as it relates to computer hardware. Introduction Innovation involves devising and, or, applying existing technologies, methods and ideas to achieve better solutions to the problems of the human society. It involves the application of creativity to meet both existing and new market needs through development of more effective products, processes, services, technologies, or ideas (Maranville 1992, Wallace 2010). Innovation also encompasses new ways of using new or old products, services or processes as well as the introduction, diffusion and adaptation of new artifacts into the society. Innovations may replace existing products; it could also enhance them (Tushman and Anderson, 2004). The capacity to imbibe and introduce new ideas, new techniques and new processes is referred to as 3innovativeness. Innovativeness reflects a social system’s tendency to engage in and support new ideas, novelty, experimentation and creative processes that may result in new products, services or technological processes (Rhee, Park and Lee 2010). Also, it is the measure of the extent of the adaptation of new and old technologies and knowledge in addressing the challenges of the society. Firms that are located in clusters have higher chances of being innovative (Baptista and Swann 1998, Porter 1998, West 2001, Mathew 2002); they are able to achieve interaction with different types of actors (Tepic et al. 2012, Baptista and Swann 1998, Porter 1998, West 2001, Mathew 2002). Operating in clusters facilitates easy collaboration and forming of, and working in teams; it also promotes faster circulation and easy acquisition of ideas and information from customers, employees and competitors. For example, feedbacks from customers on the use of a product could be useful in the subsequent modification or design of the product or in the improvement of services. In clusters, organisations are able to identify, acquire and absorb ideas required for building skills in both the immediate and wider environments. In a recent paper Pouris (2016) said that clusters make it possible for firms, higher education and research institutions and other entities to come together and facilitate collaboration on complementary social, technological and economic activities. Idowu (2015) have observed the emergence and rapid growth of a cluster of information technology products and service providers in Nigeria most of whose activities she described as artisanal. These operators do not necessarily have formal training in information technology or related disciplines. Their skills are majorly acquired through informal apprenticeship systems. The operators in these clusters depend on informal knowledge to be able to develop themselves in order to effectively tackle IT problems. To perform well, they are able to identify and absorb knowledge from the immediate and wider environments; they also interact 3with different types of actors for the achievement and accumulation of the relevant information and knowledge that may help them realize different types of innovations. The largest and major computer hardware, software and service cluster in Nigeria is the Otigba Computer Village hardware cluster in Lagos. The 7Otigba computer hardware cluster in Lagos, Nigeria The 6Otigba Computer Hardware Cluster otherwise known as the Ikeja Computer Village in Lagos, Nigeria is a popular in West Africa (Abiola 2006, Oyelaran-Oyeyinka 2014). There are many facts about Lagos, Nigeria that could explain the sprouting and growth of this cluster. The city of Lagos accounts for more than 60% of industrial production in Nigeria (Oyelaran- Oyeyinka 2006). The emergence and growth of this cluster in the 1990s is generally believed to have been stimulated by the increasing 7demand for computers and peripherals from individuals and businesses in Lagos. There was also the issue of meeting the needs of academic institutions, research institutes and government agencies most of which are located in Lagos due mainly to its long status as a federal capital. The cluster consists of some trained experts, and many artisans who engage in trading, supplying and repairing of IT facilities of all types ranging from computers, telecommunication equipment, satellite and mobile technologies. The operators consist of 6retailers, importers of computer parts and office equipment and builders of computer clones. According to Oyelaran- Oyeyinka (2013), this cluster is 4a network organization of suppliers, buyers, clone builders, and traders that has generated an intense competitive environment and a local milieu that constitutes a significant knowledge base for the future of Nigeria’s IT revolution. 4A defining feature of the Otigba cluster is the considerable reservoir of tacit knowledge shared by the clustered firms and explicit knowledge that comes from formal institutions. The attraction of endogenous and exogenous knowledge from formal and informal institutions helps define and shape, and also bring stability to the cluster and promote its long-term and short term interests (Oyelaran- Oyeyinka and McCormick 2007). The operators 6rely to a large measure on own their savings. The cluster supports collective action within it in the 6form of inter-firm credit facilities and technical support in the form of knowledge sharing etc (Oyelaran-Oyeyinka (2006). This approach has been a strong source of advantage, as well as a shortcoming for the enterprises in cluster. Evidently, the evolution of this industrial cluster provides opportunities for examining the relationships between the networks in the cluster, their capacities to learn new ways of solving problems and to device and use local and new strategies to solve IT problems. Very importantly is the need to understand 1how the operators’ networking behavior and capacity to ‘absorb’ information from various sources relate to their innovativeness. Statement of the problem The 7Otigba computer hardware cluster in Lagos State Nigeria7has attracted the attention of many scholars in the last decade and half. The first identifiable study was Bamiro (2003) who used a survey questionnaire to study the emergence and constraints of the cluster. He found that despite the expansion of the cluster to an area of 325 square kilometers within a short period of time, there was minimal government intervention. The study of Oyelaran-Oyeyinka’s (2006) study was about how the informal cluster is contributing in filling the technology gap in the country. The study also used a questionnaire and participatory research appraisal in addition, and found that 6more than 97% of the enterprises in the cluster cooperate with other firms within the cluster while 78% and 99% of the enterprises respectively collaborate with subcontractors and industrial associations respectively. Besides Oyeyinka’s study, Abiola (2006) evaluated the IT enterprises in the cluster 6in terms of their size capacity, performance and modes of operation and sustainability. Using a questionnaire, Abiola found that the firms had an average size of 8, a relatively strong skills base, very high employment generation capacity and cooperative competition. Later in 2012, Awoleye (2012) examined the adoption of ITs by businesses within the cluster. The study focused on the incorporation of ITs and how they use them in their activities. Using a questionnaire, the study found that the activities of the enterprises in the cluster have been significantly enhanced by the adoption of IT. He also found that a number of constraints, including but not limited to inadequate energy supply have limited the proper adoption and use of IT. 7Drawing on the concepts of industrial clusters and multidimensional poverty in Nigeria, Oyelaran-Oyeyinka (2013) studied the impact of the cluster on the standard of living and poverty alleviation among the employees in the cluster. Employing a methodological framework that combines survey questionnaires, subjective versus objective measures of living standards, diverse informant interviews and archival research, the findings reveal that the cluster has positive impacts on standard of living of the employees and that more than half of the employees use improved water, sanitation and cooking fuel options, while possessing assets such as radios, refrigerators and televisions in their houses. Despite the relative high focus of research ion this cluster, no studies have addressed such questions as: Do the IT products and service providers have the capacity to innovate? Are the engineers/artisans even aware that they could be introducing new ideas, new techniques, new products and processes? What is the networking behavior of members of the cluster? Do the members of the cluster have sufficient skills to innovate? What is their capacity to acquire, assimilate, transform and use knowledge for innovation? The objective of this study is to examine how the networking behavior, and, knowledge acquisition, assimilation, transformation and exploitation capacities of the information technology products and service providers in Otigba in Lagos Nigeria relate to their innovativeness. These concepts have been studied in- depth in the innovation literature ((Klerkx and Leeuwis 2009, Tepic et al 2012, Hansen 1999, Reagans and McEvily 2003, 1Van Gilsing and Nooteboom 2005, Nooteboom et al. 2007) Hypotheses for the study We tested the hypothesis that the innovation variables namely networking behavior, acquisition capacity, assimilation capacity, transformation capacity and exploitation capacity do not have significant influence on the innovativeness of IT product and service providers in the Otigba computer hardware cluster in Lagos Nigeria. The hypothesis is designed to validate the relevance, or the extent thereof, of these very ubiquitously applied variables in understanding the innovativeness of the operators in the cluster. This result will contribute to addressing the question of the extent these traditionally explored variables provide explanation for the innovativeness in a technology cluster in Nigeria? The study will also provide impetus for looking for explanation for the innovativeness in the cluster in other variables, thus enriching the options for improving the ability of innovators to address issues related to their areas of mandate. Literature Review It is generally accepted that the networking behavior, knowledge acquisition and assimilation transformation capacity of innovators as well as their absorptive and transformative capacities are key variables that influence innovativeness. We review these concepts very briefly. Networking behaviour Networking relates to the systematic establishment and use of internal and external links among people, teams or organisations in order to improve performance (Aalst 2003). Interaction and communication with people could bring advantages such as business opportunities, improved skill and expansion of customership base, among others. For innovators to be efficient, the operators are expected to invest significant amount of time with external links in order to acquire complex and tacit knowledge (Krackhardt 1992). External sources of relevant and valuable knowledge facilitate the flow of new ideas into a social system as well enables the formation of innovation (Clausen 2013). It also influences proper use of existing knowledge. External sources are also important in recognizing the relevance of relationships that are only activated for specific purposes and therefore for a relatively shorter period of time. Usually, ties with external sources relate to the acquisition of explicit knowledge (Hansen 1999; Reagans and McEvily 2003; Nooteboom, Vabhaverbeke, 1van-Gilsing and Oord 2005; Nooteboom et al. 2007 and Tepic et al 2012). Acquisition capacity Acquisition capacity refers to an individual’s capability to identify and acquire externally generated knowledge that is critical to its operations (Zahra and George 2002). It is the ability of an individual or organisation to recognize and obtain knowledge that is external to self or organization 2as a useful resource in the process of innovation; it is a very important element in gaining insight into the innovativeness (Indarti 2010). Absorptive capacity Acquired knowledge must be understood and incorporated into tasks. High 2absorptive capacity promotes the speed, frequency, and magnitude of innovation, which in turn generates new knowledge2(Van den Bosch et al., 1999). There are internal and external factors that facilitate absorptive capacity. The internal factors include: (i) Level of education: Arjona (2013) has shown that level of education is a determinant in this regard - the higher the level of educational training of individuals, the 2higher their ability to assimilate and use new knowledge. (ii) Number of employees: 2Lee and Sung (2005) showed that size of a firm as m-easured by the number of employees, is significantly related to volume of research and development 2activities, which is often used as an indicator to measure a firm’s absorptive capacity. (iii) Prior related knowledge: 2Prior knowledge base is the sum of all individual units of knowledge within an organization. According to Kim (1998), 2prior related knowledge has a positive effect on absorptive capacity because it determines the level of a person’s ability to perform the principal activities of acknowledging the value of the new knowledge, assimilating it, and applying it for commercial and other ends (Cohen and Levinthal, 1990) (iv) The presence of gatekeepers: the gatekeepers role 2is to create a language that can be understood by different parties involved in the innovation process and can improve a firm’s absorptive capacity through knowledge sharing. Gradwell (2003) has shown that the gatekeeper is an interface that screens the 2environment for relevant knowledge and transforms this information in such a way that it can be understood by the firm’s employees. Assimilation capacity Assimilation capacity refers to the routines and processes that allow an individual to analyze, process, interpret and understand the information obtained from external sources (Kim 1997). It is the integration of new knowledge or information with what is already known. The whole essence of innovation is to transform new or existing innovations or ideas into products and services. Transformation capacity of the innovator denotes the 3capability to develop and refine the routines that facilitate the combining of existing knowledge with newly acquired and assimilated knowledge (Tepic et al. 2012). 1This is accomplished by adding or deleting knowledge or simply by interpreting the same knowledge in a different manner. Generally, the ability to innovate is dependent on the recognition, understanding and application of new knowledge and other resources such as finance (Klerkx and Leeuwis 2009). Transformation is a complete change of a product or service into something with an improved usefulness. Exploitation capacity New products and ideas or services are often intended to be introduced into the market for use. Tepic et al. (2012) define exploitation capacity as an individual’s 3capability to develop and refine the routines that facilitate the combining of existing knowledge with the newly acquired and assimilated knowledge. Evidently, these capacities are interconnected but not necessarily in a linear form. Also, the processes involved in innovation are not expected to obtain in one ‘shop’. For example, an innovator could acquire a certain piece of knowledge, and that knowledge is the final product of interest to him or her. He or she then takes that knowledge straight to the market where it serves as a new innovation, and which may further be subjected to further innovation. Research Framework Figure 1 illustrates a framework of the relations among networking behaviour, absorptive capacity and innovativeness. The framework posits that socio-demographic characteristics: age, Networking Acquisition behaviour capacity Absorptiv Innovati- Assimilation capaicty veness capacity Exploitation Transforma- capacity tion capacity Figure 1: The Research framework gender, education, employment type, type of business, household size, professional membership and income-level relate with the operators’ acquisition capacity, assimilation capacity, transformation capacity and exploitation capacity as well as their networking behaviour in relation to innovativeness. The framework suggests further that transferring knowledge and maintaining networks are related because they influence the capacity of the operators to devise new ways in solving old and new IT problems using new and existing strategies. Methodology Location of the study The study was carried out in the Otigba computer hardware cluster in Lagos Nigeria. The cluster evolved from trading in imported IT equipment, components and products in the early 90s (Abiola 2006, Oyelaran-Oyeyinka 2006). According to Oyelaran-Oyeyinka (2014), this 4network organization of suppliers, buyers, clone builders, and components traders has generated an intense competitive environment and a local milieu that provides for a significant knowledge base for the future of Nigeria’s IT revolution. According to 7Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) (2005), the 4Computer and Allied Products Association of Nigeria (CAPDAN) which is the name of the association of the IT operators 7had about 3,500 registered enterprises, with about 8,000 to 10,000 employees excluding their employers. In addition to these, Oyelaran-Oyeyinka (2014) has observed that there are also about 1,500 street operators. Research design The study adopted quantitative and qualitative approaches. The quantitative approach is useful since the study was intended to prove or disprove the hypotheses by mathematical and statistical means. It is also suitable to obtain information about facts, behaviours, and attitudes in the population. The quantitative approach was driven by a sample survey, used because respondents were drawn from among specific categories of possible respondents in the cluster. The study also employed qualitative design since human behaviour and habits were under consideration, and to help to reinforce and evaluate the findings over a more specific scale. The qualitative approach was guided by in-depth interviews. Interviews are suitable as they could broaden the horizon of the researcher with the possibility of revealing constructs or factors not originally envisaged by the researcher. Sampling and Instruments for data collection Apart from the statistics of the number of stalls in the cluster being relatively old (2005), there is no sampling frame of the stalls or of the operators and the various categories of tasks performed in the cluster were located differently. We purposively decided on three hundred respondents, equally distributed from computer repair/servicing, installation and cloning categories of the operators. A questionnaire was suitable for the quantitative data collection. The questionnaire was structured into seven sections: (a) socio demographic characteristics (b) networking frequency (c) acquisition capacity (d) assimilation capacity (e) transformation capacity (f) exploitation capacity and (g) innovativeness. Section A: Demographics The demographic characteristics are age, educational qualification, gender, type of employment, type of business, professional membership, and union membership. Section B: Networking frequency The operators 1were asked to indicate the frequency of contact with local suppliers, foreign suppliers, contractors, manufacturers, local and foreign customers, government institutions and knowledge institutions. The operators were also asked to indicate the extent to which they make use of the actors, and the knowledge and information they obtain from them in their work. The 1overall networking frequency was considered in the model by calculating the average frequency of contact with the 1actors. The higher the overall average score, the higher the level of interaction between the operators and a wider range of actors. The section was measured on a four point Likert a scale: (often=4, sometimes=3, rarely=2 and never=1). Section C: Acquisition capacity The 1measurements of absorptive capacity developed by Jansen, Bosch and Volberda, (2005) and further adapted by Tepic et al (2012) were used. Acquisition capacity was by asking questions about 1contact with partners for the purpose of collection of information about developments in the sector, attendance of IT related meetings,1allocation of time and skillfulness in establishing contact with the relevant parties in the network. Section D: Assimilation capacity Five items adapted from Jansen, Bosch and Volberda, (2005) and Tepic et al (2005) 3were used to measure assimilation capacity. The statements concerned the skills and capacity to detect 1changes in the market, regulations and technical possibilities as well as time spent and skillfulness in deliberating with advisors in this regard. Section E: Transformation capacity Five items, adapted from Jansen, Bosch and Volberda, (2005) and Tepic et al (2005), 1were used to determine transformation capacity. The operators were asked to what extent they stored information for later use, how skillful they considered themselves in assessing the usability of external information, how much time they spent and how skillful they were in translating acquired information into changes and adjustments in their businesses. Section F: Exploitation capacity Three items adapted from by Jansen, Bosch and Volberda, (2005) and Tepic et al (2005) 1were used to measure exploitation capacity. The operators were asked about their capacity to translate external information into new and improved business applications, whether the use of the acquired information contributes to their how much time they spend and how skillful they were in converting acquired information into innovativeness. Section G: Innovativeness To measure innovativeness, the study employed an 11-item survey measure developed and adapted from InformationWeek 500’s analysis of the top 500 innovative firms and used in Sexton (2012). Section C to D were measured on a 5-point Likert scale include Strongly Agree (SA=5), Agree (A=4), Undecided (U=3), Disagree (D=2) and Strongly Disagree (SD=1). The Interview Schedule The interview schedule is shown in Figure 2. We engaged willing respondents in a discussion guided by the questions in the schedule. 1. …..describe the type of persons or organizations/institutions you get information from that you use in your work 2. Would you say that the knowledge you get or the things you learn from persons and organizations outside the cluster are useful to your work, if yes how exactly? 3. In what ways do the information or things you learn from these persons or organizations improve your business 4. Can you explain how the information or things you learn from these persons or organizations make you introduce new services? 5. Can you describe the extent you have been able to increase your income through the information or things you learn from persons or organizations? 6. Can you describe the extent you have been able to lower your business costs and make services more efficient? 7. Describe to what extent you have been able to improve customer services and expand your business? Figure 2: The Interview Schedule 8. Is there any other information about innovation or your capacity to improve on products or services that you think would be useful for me to know? 8 Altogether, 18 people were interviewed. The interviews which were conducted in English were recorded and later transcribed. Pretesting the instrument and validating the scale The scales used in the questionnaire in this study were mainly adapted, but they were however validated by their original developers. All the same, in order to ensure the suitability and adequacy of the adaptation in the environment of study, twenty copies of the questionnaire were administered to respondents in similar tasks in Ibadan Nigeria. A major observation was that the volume of the instrument was too large for the self-employed and busy IT workers. There was also an observation that some of the questions were somewhat technical and required explanations for participants with low level of education to understand. The final questionnaire that was administered had explanations to such questions that were considered technical. The scales were validated using Cronbach’s alpha test. Administration of the research instruments The questionnaire survey The researchers and three assistants moved introduced the study to the respondents and solicited for their participation. Securing participation was a difficult task as the would-be respondents complained about time and the distraction completing the questionnaire or taking part in the interviews would cause them. The respondents were allowed the option to decide whether to participate in the recorded interview or complete a questionnaire. The questionnaire was self- administered during business hours in the month of January 2015. The in-depth interview The in-depth interviews were conducted by posing questions to the respondents and following up responses with further questions to generate a discussion. Eighteen respondents across the three areas of tasks in the study were involved in the interviews. The interviews were later transcribed and themes were developed based on the research objectives. Access to the respondents was negotiated with the permission and support of 4the Computer and Allied Products Association of Nigeria, an umbrella body of the operators. Results Socio-demographic characteristics The socio-demographic characteristics of the respondents are shown in table 1. All the respondents are male. The respondents within the age bracket of 27-32 years were the largest in number (40.3%). Respondents within the age bracket of 33-38 (29.3%) followed by those within >26 and 39-44 constituted 15% and 9.9% respectively and Table 1 Socio-demographic characteristics of Respondents Demographic characteristics Frequency Percent Age (N=273,Mean=32.53) ≤26 years 27-32 33-38 39-44 ≥45 41 110 80 27 15 15.0 40.3 29.3 9.9 5.5 Educational qualification (N=273) Primary Education Secondary Education Technical Education University Education Professional Qualification 13 108 39 111 2 4.8 39.6 14.3 40.7 0.7 Marital status (N=272) Single Married 132 140 48.4 51.3 Type of business* (N=273) Maintenance/Repair Computer Cloning Installation 270 34 76 98.9 12.5 32.6 Membership of CAPDAN (N=271) Union membership Professional body 245 6 89.7 2.3 *sums do not add up to 100% due to multiple responses those in the age bracket of 45-above constituted 5.5%. In respect of education, the largest number of respondents was those with university education (40.7%); respondents with secondary education followed closely (39.6%) while those with technical education and primary education constituted 14.3% and 4.8% respectively. Only two or 0.7% reported any professional qualification. Majority of the respondents (51.3%) were married while 48.4% were single. Almost all the respondents (98.9%) engaged in maintenance/repair services while 32.6% were rendering installation services and 12.5% reported that they cloned computers. Furthermore, 89.7% of the respondents reported that they are members of the association while only 2.2% reported belonging to any professional bodies. In respect of the income level, the respondents earned a mean of about 19000 Naira weekly. Networking frequency Table 2 reveals that the respondents sometimes network with local (M=3.858) and rarely (1.821) with foreign suppliers. In respect of other partners, the incidence of learning from Table 2: Frequency distribution of networking Often % Sometimes % Rarely % Never % Mean SD Suppliers Local Suppliers 56.401 33.32 9.901 0.411 3.858 0.685 Foreign Suppliers 27.11 12.522 53.811 6.612 1.821 0.922 Other Partners Contractors 19.802 48.700 20.123 11.421 2.769 0.896 Manufacturers 15.406 50.921 20.54 13.212 2.685 0.889 Other Colleagues/Organizations in Otigba Computer village 74.319 24.101 1.631 0.045 3.947 0.619 Customers Local customers 70.001 15.011 9.222 5.912 3.491 0.888 Foreign customers 21.610 49.109 14.335 14.711 2.780 0.950 Government Institutions Ministry of Communication Technology 0.411 4.031 11.715 83.504 1.210 0.519 Ministry of Science and Technology 0.008 2.617 10.391 86.401 1.191 0.734 Ministry of Industries 0.011 1.516 12.8 85.313 1.158 0.404 Ministry of Education 0.001 1.811 9.902 87.914 1.136 0.394 Nigeria Information Technology Development Agency (NIITDA) 0.439 1.509 12.504 85.305 1.165 0.436 National Office for Technology Acquisition and Promotion (NOPTAP) 0.066 1.829 14.302 83.211 1.181 0.431 Knowledge Institutions Universities 1.119 6.601 12.511 79.108 1.291 0.638 Polytechnics 0.071 22.20 9.518 67.901 1.140 0.406 Research Institutes 1.105 6.608 4.808 87.229 1.213 0.606 contractors and manufactures is almost sometimes (M=2.769 and M=2.685) while learning from colleagues/organizations in Otigba Computer village has a high mean score (M=3.9475) that falls under the category ‘often’. Learning from local customers also occurs often, having the highest mean score (M=3.491) in comparison with learning from foreign customers occurs almost sometimes (M=2.780). Learning from government institutions and knowledge institutions actually never obtains (mean =1). Application of information obtained through networking Table 3 relates to the perceived application of information obtained through networking, and it shows that 59.7% and 62.3%) of the respondents respectively strongly agreed (M=4.593 and M=4.579) that they use the information they received from other sources for the purpose of learning and doing repairs. Table 3: I apply the information obtained through networking SA % A % U % D % SD % Mean S.D Learning 59.7 27.8 0.4 6.2 5.9 4.593 1.136 Repair 62.3 35.5 0.7 0.7 0.7 4.579 0.626 Cloning 14.7 20.5 5.9 30 27.8 2.637 1.451 Branding of computer 25.3 46.2 5.5 8.8 13.2 3.622 1.315 Modification of products 23.4 47.3 13.9 3.3 11 3.696 1.193 Collaboration 5.9 31.9 19.8 17.2 24.5 2.771 1.294 Marketing 2.2 11.0 21.6 27.5 37 2.133 1.104 Regulation 0.4 10.3 15.4 27.5 45.8 1.912 1.029 Environmental Issues 0.7 7.3 13.2 35.9 42.1 1.878 0.953 Note: 5SA=Strongly Agree, A=Agree, U=Undecided, D=Disagree, SD=Strongly Disagree, S.D=Standard Deviation Less than one third (30%) of the respondents were undecided (M=2.637) that they apply the information they obtain for the purpose of cloning. For the purpose of branding of computer and modification of products, the mean scores of 3.622 and 3.696 corresponded with 46.2% and 47.3% who use the information they obtain for these purposes. Collaboration and marketing had means of 2.771 and 2.133 respectively corresponding with 19.8% who were undecided in respect of collaboration, and 27.5% who disagreed in respect of marketing. Finally, 45.8% and 42.1% of the respondents were disagreeable (M=1.912 and M=1.878) about applying the information they obtain for regulation and environmental issues. Acquisition capacity In respect of the respondents’ assessment of their acquisition capacity through identified avenues, the result in Table 4 shows that 65.2% of the agreed (M=4.418) that they acquire some capacity through interaction with customers. Table 4 Frequency distribution of acquisition capacity I get information through SA % A % U % D % SD % Mean S.D Customers 26.0 65.2 0.7 1.5 6.6 4.418 1.06 Manufacturers 39.9 40.3 0.7 10.6 8.1 3.938 1.25 Contractors 37.4 28.9 8.8 9.2 15 3.649 1.44 Suppliers 44.0 30.4 1.8 9.9 13.9 3.806 1.44 Seminars, conferences workshops, 25.6 22.7 6.6 11.4 33.7 2.952 1.65 People and institutions Colleagues 29.7 68.8 31.9 12.36 9.9 5.23 5.1 7.41 23.4 6.2 3.392 3.68 1.53 1.89 Note: 5SA=Strongly Agree, A=Agree, U=Undecided, D=Disagree, SD=Strongly Disagree, S.D=Standard Deviation Further, the mean of 3.93 corresponds to 40.3% of the respondents who agreed that they acquire capacity through manufacturers. Similar result applied to acquiring capacity from discussion with contractors (28.9%) and suppliers (30.4%) with the highest mean values of 3.649 and 3.806 respectively. As would be expected of busy business persons in the informal sector, participating in seminars, workshops, conferences to upgrade skills and gain more knowledge had a mean score of 2.952 reflecting the 6.6% of the respondents who were undecided. In a similar manner, the mean score of 3.392 indicates that contacting people for useful knowledge and information about new developments in the work was an undecided approach for capacity acquisition. Assimilation capacity In respect of the capacity to assimilate new knowledge, Table 5 reveals that the mean of 4.333 reflects the 64.1% of those who agreed that they are able to recognize new developments in computer technology. The disconnection between the respondents and the government is reflected in the mean value of 2.619 that represents the 28.9% of the respondents who are undecided about recognising shifts in regulation. The market dynamics appear too complex for the respondents as the mean value of 1.493 correspond to 33% who strongly disagree (2.619) that they recognize shifts in market competition. Table 5 Frequency distribution of assimilation capacity I am always among the first to: SA % A % U % D % SD % Mean S.D Recognize new developments in technology especially as regards computer 17.2 64.1 7.1 9.9 1.1 4.333 1.051 Recognize shifts in regulation 20.5 15.4 21.6 13.6 28.9 2.769 1.517 Recognize shifts in market competition. 17.6 13.6 33.0 20.9 15.0 2.619 1.493 I am very skillful in recognizing new developments to serve new customers. 52.4 30.0 5.1 6.2 6.2 4.601 1.1678 I allocate 1a lot of time to discuss with manufacturers in order to recognize changes in the market. 26.4 27.5 8.1 5.9 32.2 1.333 1.6050 Note: 5SA=Strongly Agree, A=Agree, U=Undecided, D=Disagree, SD=Strongly Disagree, S.D=Standard Deviation In terms of skillfulness in recognizing new developments to serve new customers, and, 52.4% (M=4.601) strongly agreed with the statement while 32.2% (M=1.33) disagree that they allocate 1time to discuss with manufacturers in order to recognize change in the market. Transformation capacity Do the respondents have the capacity to transform the knowledge they acquire to products and services? Table 6 shows that only 28.6% of the respondents were undecided that they 1record and store newly acquired knowledge for future reference while (30.0%) strongly disagreed. About half of the respondents recognized the 1usefulness of new external knowledge to the existing/ current knowledge about technology (Mean=4.645). Table 6 Frequency distribution of trans formation capacity SA % A % U % D % SD % Mean S.D I 1record and store newly acquired knowledge for future reference. 5.5 17.2 28.6 18.7 30.0 1.456 1.647 I recognize the usefulness of new external knowledge to our existing knowledge. 50.2 37.7 0.4 9.9 1.8 4.645 1.005 I discuss with my colleagues 1how trends in the market could be used to improve our business. 43.6 29.3 5.9 12.8 8.4 4.725 1.246 I 1allocate a lot of time to translation of external information into changes to our business. 18.3 12.1 32.6 8.1 28.9 3.033 2.518 I 1have sufficient skills to translate external information into changes to our business. 28.9 47.3 4.8 9.9 9.2 4.369 1.228 Note: 5SA=Strongly Agree, A=Agree, U=Undecided, D=Disagree, SD=Strongly Disagree, S.D=Standard Deviation The mean of 4.725 in respect of discussing with colleagues about 1how trends in the market could be used to improve business reflects that the 43.6% of the respondents that strongly agreed with the statement. But 32.6% (M=3.033) were undecided about allocation of time to translate external information to understand changes in the business while 47.3% (M=4.369) agreed that they 1have sufficient skills to translate external information to understand changes in the business. Exploitation capacity What about taking advantages of the opportunities created by networking to infuse new products and ideas into their businesses? Table 7 shows that 39.6% of the respondents strongly disagreed (M=4.590) that they translated external information directly into new business applications. Table 7 Frequency Distribution of Exploita tion Capacity SA % A % UD % D % SD % Mean S.D I 1translate external information directly into new business applications 17.6 5.9 19.4 16.1 39.6 4.590 1.500 Application of external information contributes to improvement in our business. 24.5 59.6 12.7 8.4 3.3 3.900 1.127 I 1have sufficient skills to convert external information into improvement in our business. 34.4 8.8 42.1 4.8 8.4 3.451 1.182 Note: 5SA=Strongly Agree, A=Agree, U=Undecided, D=Disagree, SD=Strongly Disagree, S.D=Standard Deviation However, as high as 59.6% of the respondents agreed (M=3.900) that external information contributes to the improvement in the business just as 42.16% were undecided about their skills to convert external information for improving in the business (M=3.451). Capacity to devise means of solving IT problems The study also investigated whether the respondents considered themselves as people who have capacity to devise means of solving IT problems. More than half of the respondents (58.6%) strongly agreed that have the capacity to their business processes more efficient (Mean =4.832). Similar result was obtained in respect of introducing new services for customers (4.764), and lowering business costs (4.641). The mean scores for improving operations (3.791) and improve customer service (3.575) shows that the respondents agreed that they could devise means of meeting these expectations while 42.9.3% were undecided (M=3.259) about engaging customers in new ways and engaging customers in new ways. Table 8 Frequency distribution of innovativeness SA % A % U % D % SD % Mean S.D Make business processes more efficient 58.6 34.1 0.4 5.9 1.1 4.832 0.860 Introduce new services for customers 53.8 31.5 4.4 7.7 2.6 4.764 1.027 Get better business intelligence to employees more quickly 14.3 21.6 31.1 17.2 15.8 2.876 1.311 Lower business costs 38.5 34.8 8.1 13.9 4.4 4.641 2.703 Improve operations 28.2 43.6 13.6 8.4 6.2 3.791 1.130 Improve customer service 21.2 44.3 15.0 9.5 9.9 3.575 1.208 Engage customers in new ways 12.5 42.9 14.3 13.2 14.7 3.259 1.276 Create a revenue stream for your business organization 15.0 43.6 13.2 15.4 12.8 3.326 1.266 Pursue new global opportunities 11.0 36.3 15.4 28.6 8.8 3.971 1.333 Improve interactions with partners/suppliers 14.3 20.9 17.9 27.1 19.8 2.828 1.349 Move the business towards an eco-friendly environment 7.7 4.8 11.7 34.8 41.0 1.033 1.189 Note: 5SA=Strongly Agree, A=Agree, U=Undecided, D=Disagree, SD=Strongly Disagree, S.D=Standard Deviation About than one third of the respondents ((31.1%) were undecided about whether they were getting better business intelligence to employees quickly M=2.876). However, 36.3% agreed with pursuing new global opportunities (M=3.971), while 41.1% strongly disagreed with improving interactions with partners/suppliers and moving the business towards an eco-friendly environment (M=1.033). Capacity to devise means of solving IT problems – the interviews We synthesized the interviews and reported them under key subheadings. Creativity The interviews revealed that the respondents recognize and are conscious of their ability to devise new ways of solving old and new IT problems especially as it relates to computer hardware. They have value for their tasks and undertaking. They try out new ideas and improve on existing systems. According to a respondent: You cannot underestimate what is going on here. People come here not only from Nigeria but also from different parts of Africa because of the activities that go on here. If there is no big business here, people will not be talking about Otigba, this place would not have been this way. It is because we make things in different ways. People come here and we upgrade their system. We do things differently. We have very creative people here. We don’t just assemble computer parts; we try to put different parts of different brands in entirely different ways. And they work. So if it is being creative or innovative, we are capable. Innovation is not only when you come out with a new product per se but when you device better means in product and business processes. And that is what you get her (Male, Cloning). Perhaps the idea of “put different parts of different brands in entirely different ways” illustrates the extent of experimentation that takes place in the cluster. This response shows how enlightened some of operators here are in respect the innovativeness that obtains in the cluster. It is also significant that the operators have a good knowledge of what it means to innovate; they engage in ‘trial and error’ but their ultimate is to ‘device better means in product and business processes. Collaboration, value for information as a good and customer satisfaction These are the key issues in the response below, and this illustrates that the operators are focused and committed to achieving business success. Information is power. If you don’t have knowledge, you are as good as dead. Through learning and collaboration with my colleagues and from the internet and even from the customers, my business grows. This is because when I meet the needs and satisfy my customers, I get more work from other customers. I upgrade laptop for people. Perhaps if my customer wants his system to be using higher RAM, I do it here (Male, Maintenance/repair). Another: … if you don’t interact and discuss with the suppliers, manufacturers and your customers. I can say that the information you from these categories of persons help a lot in improving my business (Male, Maintenance/repair) Yet another: Like I said earlier, you do certain things you have not done before by simply discussing with your customers or by learning about what is the latest in technology. In this way, you try your best to achieve the same thing. So you can see that through interactions with your customers, suppliers and learning about the latest in computer you are able to introduce new services and do new things (Male, Maintenance/repair). Experimentation and innovation Perhaps a very provocative response comes from this computer repairer who compares their way of doing things with the way distinguished IT hardware organisations do their own: We make things entirely different from how HP, Dell and others do theirs. You cannot underrate the people you see here. All we do is to see how we can use our own techniques and knowledge to solve our IT challenges and this continues to improve our work here (Male, Maintenance/repair). The respondents reported ability to improve in their businesses as they experience increase in income and sustained patronage by the customers. Yes, by using other ways of meeting customers’ needs you are able to reduce the amount of money you would have used on that job. Through careful planning and also utilization of alternative materials, I am able to cut costs significantly. As a customer comes out with a new product, or when I come out one myself that will look like an exact copy of an original product, instead of using the original parts and components manufactured by the original manufacturer, I decide to use other parts or components that are cheaper but still of good quality and fitting to the specification or requirement. That way I am able to lower business costs and services are made more efficient. This is because sometimes you discover that when you clone systems or when you use different components, the system even performs better and can do what the original system may not be able to do (Male, Cloning). Another respondent commented thus: Everything in this life is step by step. And no man knows it all. It is through what I learn or the information I get that I apply to do other areas of the work that I have not been doing before. For instance, in trying to use a hard disk which has a particular capacity for another component or if I try to use a different motherboard for another brand, it is new service and it is because I am trying to meet the need of a particular customer. Also, sometimes we do trial and error. You try to fit certain components and parts together and see the result. Through all these, you are able to do new things and introduce services that you are not used to before (Male, Maintenance/repair). Another: We introduce new products through our cloned systems. When the user or the producer defines the requirement for a particular system, we go ahead to design based on the specifications. There is trial and error in this business. You see us trying out different components and sometimes we come out with good systems, sometimes they don’t just work. So I would say we build new products here (Male, Cloning). The foregoing responses could indicate unprofessional approaches to solving problems; but these approaches are spurred by unavailability of spare parts or even complete parts of computer models the operators wish to build. The claim of trying out combinations of parts from different equipment that perform better than the original parts may require laboratory tests to validate. The fact, however, is that branding spare parts may sometimes be the only differentiation between a certain part obtained from a branded product and that of another. The ability to identify the parts that are complimentary and cheaper, and confidently use them for a service is a demonstration of skill. Challenges lead to innovation and experimentation A respondent also commented thus: In fact one of the problems we are battling in this computer village is the issue of space for more business outlets. I have been able to open another computer repair and sales center at Adeniyi Jones Street here in Lagos. Ordinarily I would have loved to open the shop here (OTIGBA) but as you can see there are no spaces. So what I am saying in essence is that we have been able to expand the business because when people see the work you do and it is beneficial and even more economical to them compared with the prices of western products, your business will grow because they will have to advertise your business. On customer services, we try as much as possible to expand customer services; that is why in my business, we repair computers, we maintain computers, we clone and we also install. In fact by the grace of God, we will be venturing into software applications development but that one requires much technicalities and also deep knowledge (Male, Maintenance/repair). Another respondent said: We are able to come up with systems with better operational characteristics, good price and long lasting too. We manipulate and rearrange components and parts in different ways to come out with systems with different capacity. We couple the various components and install the operating system software to help the various hardware work. We test the systems and if the work, it is good for business. So I can say we introduce new products here and that is why people come in here every day for one system or the other (Male, Cloning). Increased income A respondent said: My level of income increases significantly. Apart from the fact that you need money to pay your workers, buy parts and other components and also run the business generally, I can say I make a living here. You may not know the amount of money that flows in this computer village daily. That is why you have banks all around here. The money we make may be divided to take care of other things but I can really say that my income increases and this is made possible by the new things I learn and the customers (Male, Installation). Another respondent stated: My income increases when you meet the needs of the customer. Especially when you are able to do what a particular customer wants, you get your money and even more because you have been able to satisfy him or her. Now, when you upgrade a system for instance or when you use a particular hard disc on another one thereby cutting costs, you get paid because you have been able to save the customer more money he would have used to buy the main system. Definitely there is increase in income when you come out with new services or modify a system. Income increases (Male, Cloning). The respondents are able to achieve innovation through increase in their income when their products and services meet the needs of the people. Test of the hypotheses Ho1: The innovation variables namely networking behavior, acquisition capacity, assimilation capacity, transformation capacity and exploitation capacity do not have significant influence on the innovativeness of IT product and service providers in the Otigba computer hardware cluster in Lagos Nigeria. We used a correlation matrix to investigate the independence of the variables in respect of predicting the innovativeness of the respondents. Table 9 immediately reveals that many of the innovation predictor variables in this study are highly binary-correlated (we set high correlation as r>0.6). However, assimilation capacity has low correlation with acquisition capacity (r=0.545) while transformation capacity and innovativeness have low correlation with all the other predictors. Table 9: Zero order binary correlations of the innovation variables Predictors 1 2 3 4 5 6 7 8 8 9 10 Networking behavior 1 Acquisition capacity Assimilation capacity 0.632 0.676 1 0.545 1 Transformation capacity 0.569 0.753 0.578 1 Exploitation capacity Innovativeness 0.421 0.174 0.283 0.121 0.342 0.097 0.297 0.151 1 0.339 1 Absorptive capacity (I) Educ. Qualification 0.118 0.229 0.174 0.051 0.107 0.191 1 No of employees -0.030 -0.021 0-.251 -0.120 0.066 0.310 0.125 1 Membership of ass. Income level Absorptive capacity (II) 0.022 0.097 0.022 0.076 0.275 0.378 0.018 0.349 0.490 0.061 0.169 0.0243 0.048 0.051 0.365 -0.009 0.494 0.0342 0.054 0.116 0.524 0.125 0.083 0.255 1 0.353 0.155 1 0.211 1 We measured absorptive capacity 1 absorptive capacity with educational qualification, number of employees and income level, while absorptive capacity II was measured with prior knowledge of the field and presence of gatekeepers. Table 9 also shows clearly that all the absorptive capacity variables are good for predicting innovativeness because the correlations are less than 0.6. Notice that sex was not included in this correlation diagnosis because the business was dominated by males (98.6%). We included marital status in the descriptive (table 1) to glean an idea about marriage among the respondents but there is no evidence in the literature that this variable could relate to innovativeness, and was therefore not included in this diagnosis. To address this problem of multi-colinearity in this analysis and still retain each of the variables from each predictor group in the study, we opted for principal component analysis to reduce the dimensions in each of the predictors to parsimonious and non-redundant few. Table 10: Principal components of networking behavior, acquisition, assimilation, transformation and exploitation capacities Variables Acquisition capacity Components I get information from suppliers I allocate a lot of time to contact relevant people and institutions Initial Eigen values Total 3.577 1.184 % of var 51.098 16.920 Cum %. 51.098 68.018 Tests KMO=0.773, Bartlet test: X2=817.193, Df=21, p=0.000 Assimilation capacity I am very skillful I am among the first to recognize shift in market 2.169 1.402 43.381 28.047 43.381 71.428 KMO=0.525, Bartlet test: X2=400.946, Df=10, p=0.000 Transformation capacity Exploitation capacity I recognize 1the usefulness of new external knowledge to our existing knowledge I 1have sufficient skills to convert external information to improve my business I 1translate external information directly into new business applications 2.282 1. 559 1.001 45.648 51.970 33.364 45.648 51.970 85.334 KMO=0.690, Bartlet test: X2=285.432, Df=10, p=0.000 KMO=0.498, Bartet test:X2= 100.075, Df= 3, p= 0.000 Networking behavior I liaise with polytechnics I liaise with foreign suppliers 4.605 3.738 28.780 23.364 28.780 52.144 KMO=0.719, Bartet test:X2=2387.043 Df=10, p=0.000 Absorptive capacity I Learnt lessons from branding Learnt lessons from other sources/activities Learnt lessons from cloning 3.437 1.855 1.094 38.190 20.616 12.153 38.190 58.807 70.960 KMO=0.637, Bartlet test: X2=1264.572, Df= 36, p=0.000 Besides yielding the variables that would be used for conducting the regression analysis, the result in table 9 has very important information that could guide decision making. Table 9 suggests that two major issues namely information collected from suppliers and personal ability and action in identifying other relevant sources of information and tapping from them as major components of acquisition capacity of the innovators. The results in Table 10 suggest that personal skill and capability of the innovator and the innovator’s ability to recognize shifts in the market constitute the major components that determine the innovators’ assimilation capacity whereas recognising the usefulness of new external knowledge is sufficient to transform the knowledge acquired into practice. In order to take the innovation to the market, the innovators require skills to convert external information and translate them directly into new business applications. The innovators network with four major types of institutions namely polytechnics, and foreign suppliers. The innovators capacity to recognize and obtain external knowledge is formed mainly through branding, cloning and liaising with other sources of information. What follows is the test of the hypothesis after the components of each of the predictor variable groups were computed. A linear regression was adopted to test how the innovation capacities relate with the innovators innovativeness. Linear regression is most suitable in this analysis because it is appropriate in gauging behavior measured in ordinal scale. Table 10: Linear Regression Result of the Innovation Predictors on Innovativeness Predictors Unstandardized Coefficients B Std. Error Sig. Collinearity Statistics Tolerance VIF Acquisition capacity Assimilation capacity 0.418 0.517 0.068 0.081 0.002 0.008 0.766 0.789 1.305 1.267 Transformation capacity 0.231 0.090 0.144 0.662 1.512 Exploitation capacity Networking behaviour 0.497 0.463 0.039 0.149 0.014 0.000 0.533 0.836 1.876 1.196 Absorptive capacity 1 0.252 0.183 0.056 0.655 1.527 Absorptive capacity II Age 0.040 0.069 0.568 0.512 1.953 Educational qualification 0.117 0.062 0.058 0.682 1.466 Number of employees Membership of Association 0.497 0.331 0.061 0.338 0.113 0.204 0.663 0.904 1.508 1.106 Income level 0.584 0.063 0.019 0.548 1.825 All innovation variables together (except absorptive capacity II) 0.522 0.209 0.0520 0.598 1.672 All the variables predicted innovativeness (p≤0.05), except age, number of employees, membership of associations and transformation capacity (p≥0.05). Also, except absorptive capacity (I) (B=0.252), educational qualification (B=0.117) and acquisition capacity (B=0.418) whose prediction magnitudes are considerably low, the magnitude of the other predictors are in the median range (B≥0.5). When all the predictors were considered together, they narrowly predicted innovativeness (p=0.0520). Altogether, the innovativeness of the products and services providers in Otigba may not be explained sufficiently by the use of the innovation capacities – there are variables located elsewhere which may provide a more detailed explanation. 5. Discussion of the findings This study investigated how identified innovation variables explain the innovativeness of information technology products and services providers in Otigba Computer Village in Lagos Nigeria. Over 55% of our respondents were less than 32 years old. Evidently, the computer village cluster is predominantly made up of relatively young people, a statistics that reflects the current knowledge about youthful age structure of Nigeria (Population Action Initiative 2006). The advantage of this age structure of operators in the cluster is that they have longer time to learn, experiment and deploy their energies to innovate in the sector. The near equal proportions of operators with university education (40.7%) and those with secondary education (39.6%) also suggest that the cluster could provide a good educational ground where those who have higher education could influence those who do not have it. A large number of university graduates in the cluster could be supportive of the opinions of Oyelaran-Oyeyinka (2014) that unemployment is a major explanation for the embracing of the profession. Also a large proportion of the respondents who are doing maintenance and repair (98.9%) signify a large number of learners as repair and maintenance are the doorway into higher level activities in the cluster such as cloning and branding. Despite the relative youthful nature of the population, a high number of respondents reported that they are married and this may suggest that the operators believe in the ability to maintain families through the business. This surmise is supported by the interviews in Nwagwu and Ibeku 2015) in which some of the respondents reported that they are able to maintain their families satisfactorily based on their businesses. Membership of the association (CAPDAN) is a compulsory requirement for operators and this explains the higher number of respondents who reported being members of the association. This requirement could be a very positive development as it could organisation and coordination of activities in the cluster much easier. Regarding their income, a mean of weekly income of 19000 Naira means that the income of the operators in this cluster per week is higher than the national minimum wage of 18000 Naira. Local suppliers are the key networking partners of the operators; foreign suppliers are actually reducing in the recent years, aftermath of the onset of poor economic and social conditions in the country. This finding tallies with common knowledge about the spate of importation of IT paraphernalia that go on both in the cluster and in other parts of the country. Most importers bring their goods to the cluster for sale. To what extent does the networking with local suppliers positively influence innovativeness in the cluster? Engaging in this discourse is very important to formally make innovation one of the major objectives of encouraging and sustaining the cluster. It is the fact anyway that most of the importers in Nigeria are not necessarily people who have adequate knowledge of the products and services they import. They are rather business persons who engage in their importation businesses according to what they consider or are told to be trendy or what the buyers of their goods want. A significant crop of networking partners of the operators in the cluster is their colleagues in the business because of proximity and personal knowledge of individual areas of skills. This is in line with the networking behaviour in cluster (Wallace 2010). A large number of respondents who reported networking with manufacturers (50.92%) might be explained to mean that after goods are supplied by local suppliers, the operators engage the manufacturers. There is a real gap between the operators and the government in respect of networking. Oyeyinka had suggested that the location of government agencies in Lagos could be a major reason for the emergence and growth of the cluster, a fact that is not manifested by the interaction between members of the cluster and government agencies. Generally though, government agencies meet their IT needs through local contractors who directly relate with the operators in the cluster. There is also a distance between the operators and knowledge institutions but the 22% of the operators who reported networking with polytechnics is informative. Polytechnics are established in order to produce technical skills and this nature of educational activities could explain their interaction with the technology cluster under study. In consonance with our inference about the number of operators who are engaged in repairs, repairs are also the major purpose for which the respondents acquire the knowledge. Their capacity to acquire knowledge from their colleagues in the cluster conforms with results in other places. The information technology products and service providers are able to exploit or use information and knowledge they get from the categories of individuals and institutions. This is in line with the study of Reagans and McEvily (2003) who noted that this is done by translating external information directly into new business applications. Also, they 1have sufficient skills to convert external information into improvement into their businesses. Furthermore, application of external information contributes to improvement in businesses. 2Results show that the absorptive capacity of the IT products and service providers is significantly related to their innovativeness. The results show that the respondents’ exploitation capacity is positively related to their innovativeness. This means that for engineers/artisans who translate external information directly into new applications and have sufficient skills to convert external information contributes to improvement in their businesses and are important for their capacity to innovate. Accordingly, the findings is consistent with the findings of Hansen (1999), Tepic et al (2012) who found out that the 1capacity and skillful ness to acquire new information and knowledge in terms of their immediate business improvements contributes significantly to innovativeness. What does this regression result tell us about factors that could explain innovativeness among the innovators? First, innovativeness among the operators in the cluster is not necessarily a function of the traditional innovation variables of absorptive, acquisition, transformation and exploitation capacities, among others. While these make some contribution to the innovativeness, there are other variables located outside this core which account for innovativeness. The study confirms the findings of Tepic et al (2012) which has it that a higher absorptive capacity which provides relevant information about changes and innovations impacts positively on the capacity of the operators to innovate. Also, 1the capacity to transform knowledge into applications turns out to have a significant effect on the capacity of the operators to introduce new ideas, processes and techniques. Findings from the interviews reveal that the information technology products and service providers are able to devise new ways of solving old and new IT problems especially as it relates to computer hardware. This is consistent with the study of Awoleye, (2013) who posits that innovation is achieved by meeting the challenges in IT in which better, more efficient and skillful approaches are employed in the business processes. Also, the IT products and service providers are able to introduce new services to the customers; this is evident in their ability to ‘upgrade’ computer systems in which they are able to make modify products with certain system characteristics and also through cloned products. This corroborates the findings of Oyelaran-Oyeyinka, (2006) who notes that the Otigba Computer Hardware Cluster exhibits high technical capacity especially in cloning and upgrade of computers. Typical of the computer clone business is the introduction of new products. However the cloning business is no longer fashionable as most of the respondents admitted that the area is no longer as lucrative as it used to be, rather the customers now prefer branded systems. This finding contradicts the findings of Oyelaran-Oyeyinka (2006) who found out that there is high patronage of cloned systems owing mainly to their low cost. 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