Nexus between Innovation Ecosystem and Innovation Performance.

Abstract

The business climate is faced with turbulent environment such as dynamic customer needs, market complexities escalating cost of production and punitive requirements for doing business. The situation is more pronounced in the manufacturing sector which calls for the development of a systematic and comprehensive approach to address the intricacies involved. The purpose of the study was therefore t investigate the influence of Innovation Ecosystem (IE)on Innovation Performance (IP) in manufacturing firms with a focus on major industrial counties in Kenya. The theoretical underpinning in this study were innovation, complexity and innovation diffusion theories. The philosophical ideology that guided the study was pragmatism. Mixed method design was used. The target population was 2,484 employees drawn from 828 firms. Multi-stage sampling was employed to sample 345 employees drawn from 115 firms. Primary data was collected using semi-structured questionnaires, interview schedules and check lists. Data was analyzed using variance, standard deviations, structural equation model and partial least square. Apilot test was conducted on 12 manufacturing firms to determine the validity and reliability of research instruments. Smart partial least square, Stata and statistical package for social scientists were the main software used for data analysis. Results were presented in graphs, tables and path diagrams. It was found that IE contributed 66.74% of innovation performance. It was concluded that IE has a significant influence on IP. It was therefore recommended that the operating environment should be enhanced for improved competitiveness of the manufacturing sector. The study is useful to members of the Kenya Association of Manufacturers, management in manufacturing firms, current and potential investors and entrepreneurs, policymakers and scholars. Further studies should be carried out on how trust can be managed in IE for a win-win situation for a more vibrant manufacturing sector.