American Journal of Industrial and Business Management, 2012, 2, 176-183 Published Online October 2012 (
Technological Capability in Metal Fabricating Firms in
Southwestern Nigeria
Victor Oluwasina Sobanke1, Matthew Olugbega Ilori2, Stephen Akinade Adegbite3
1National Centre for Technology Management, Obafemi Awolowo University, Ile-Ife, Nigeria; 2African Institute for Science Policy
and Innovation, Obafemi Awolowo University, Ile-Ife, Nigeria; 3Centre for Industrial Research and Development, Obafemi Awo-
lowo University, Ile-Ife, Nigeria.
Received March 28th, 2012; revised April 29th, 2012; accepted May 22nd, 2012
The study assessed the technological capability in the metal fabricating firms in southwestern Nigeria. A technology
capability index (TCI) was used in assessing 200 randomly sampled firms. Data for the study was analyzed by using
descriptive analysis. The results showed a variation in the TCI scores of firms with micro, small and medium fabricat-
ing firms scoring an average of 0.82, 1.10 and 1.54 respectively. Firms which reported that process innovation were
incremental are 24.8%; new to the firm (100.0%) and creative (3.0%). Similarly, product innovation variables showed
that 85.5% were incremental; i mitation (95.5%) and creativity (50.4%). The study sugg ests the need for policy interve-
netion to enhance th e knowledge and skills of the operators.
Keywords: Technological Capability; Industrializatio n; Knowledge and Skills; Metal Fabricating Firms; Small and
Medium Enterprises
1. Introduction
Technological capability has received considerable atten-
tion of many researchers worldwide. This is with a view
to understanding those factors responsible for the differ-
ences among the countries classified as developed, newly
developed and less developed. In fact, technological ca-
pability is a major contributory factor to the paradigm
shift that occurred in the ways n atio ns relate an d co mpete.
Specifically, technological competitiveness, which re-
searchers refer to as a game of nations, has been an indi-
cator for measuring economic performance and standards
of living of nations [1]. As a consequence, developed and
developing nations are now categorized as having desir-
able and undesirable economic status respectively [2].
Hence, an attempt to move from the undesirable status,
by the less developed nations, to the desirable status re-
quires a technological ladder, which is explained to be
synonymous to technological capability [2].
The realities in Africa however shows that many Afri-
can countries are still struggling to get back on the de-
velopmental track after the aftermath of the Structural
Adjustment Programme (SAP) introduced to the African
economies by the World Bank [3]. Similarly, Nigeria is
categorized as a developing nation with decreasing in-
dustrial productivity. Various research studies, together
with expert opinions have attributed the failure to social,
economic, and political factors. However, in addressing
these challenges various policies h ave been adopted. One
of such policy is International Technology Transfer (ITT)
which is regarded as a factor to the success of the newly
industrialized countries (NICs) of the East and South-
East Asia [2]. This could be one of the reasons why most
African governments depend on the industrialized and
the newly industrialized nation s for techn ological sup port
to develop their economies.
But recently, there have been some shocking revela-
tions from results of various researches in comparing
various developmental activities among the newly Indus-
trialized countries in Asia and some countries in Africa.
The result shows that the pattern and the level of techno-
logical capability development among the two economic
blocks are significantly different [4,5].
Alternatively, researchers have therefore suggested
rapid industrialization for developing economies to en-
hance economic development, and this in general term
means raising the level of technological capability in-
volved in the manufacturing activities [2,6] at all levels.
Further studies have shown that every society has its own
level of indigenous technical knowledge, and there are
substantive literatures that established this knowledge to
be very low in Africa [7] despite the endowment of many
natural resources. It is based on this assertion that this
Copyright © 2012 SciRes. AJIBM
Technological Capability in Metal Fabricating Firms in Southwestern Nigeria 177
study appreciates the significant role the metalworking
sub-sector of the Nigerian manufacturing sectors has
played in the industrialization effort of Nigeria, and at
the same time, tries to understand the level of techno-
logical capability of operators in the sub-sector.
Amdi [8] notes that during the third and fourth na-
tional development plans of Nigeria, the metalworking
sub-sector of the Nigerian manufacturing sector was
identified as crucial for achieving rapid industrial devel-
opment and technical change. This is because the sector
is considered a centre-piece of any nation’s real industri-
alization efforts. In fact, one of the factors that accelerate
the industrial revolution in the industrialized nations of
the world is attributed to the vibran t metalworking Indus-
try [9]. This sector manufacture parts and components for
automobile industry, construction industry, agricultural
tools and equipment with wide applications and a num-
ber of basic household and industrial equipment [10].
Therefore, a technology-based metalworking industry is
the bedrock of an industrialized nation. Furthermore,
available literature revealed that there are various em-
pirical works on technological and innovation capabili-
ties in many areas of the Nigerian industrial sector, most
especially in the manufacturing sector [11-13]. However,
little of such studies have been directed towards the ac-
tivities of the metal fabricators in Nigeria. Hence, the
objective of this paper is to assess the activities of the
metal fabricating firms as well as the capability of op-
erators in the sector.
2. Literature Review
2.1. Concept of Technological Capability
Technological capability has been explained in various
ways depending on the interest of the researchers. Gar-
cia-Muina [14] conceptualized technological capability
as a tool for implementing competitive strategy and cre-
ating value in any given environment. They further de-
fined it as the ability to jointly mobilize different scien-
tific and technical resources which enables a firm to suc-
cessfully develop its innovative products or productive pr-
cesses. Similarly, Marjolein [15] described technological
capability as the ability to make the right investment
choices; increase production capacity; and engage in con-
tinuous upgrading of product quality. They further ar-
gued that technological capability are efforts geared to-
wards investment in time and resources aimed at assimi-
lating, adapting and improving existing technologies and
creating new technologies through reverse engineering .
Similarly, Jin [4] observed that technological capabil-
ity in developing countries could be used interchangeably
with “absorptive capacity” which means absorbing ex-
isting knowledge from the developed economy, assimi-
lating it, and in turn generating new knowledge. The re-
searchers further defined technological capability as the
effective use of technical knowledge and skills required
to improve and develop products and processes; improve
existing technology; and also to generate new knowledge
and skills in response to the competitive business envi-
The focus of technological capability in developing
countries is on the relationship between the Firm-level
Technological Capability (FTC) and the National-level
Technological Capability (NTC). This focus at the firm
level is on equipment, skills, knowledge, attitudes and
aptitudes needed to choose, install, operate, maintain,
understand, adapt, improve and develop technologies [5].
The process involves specific efforts and strategies by
firms for developing technologies. At the national level,
the focus is on collection of individual firm-level techno-
logical capabilities together with various linkages avail-
able in the National Innovation System (NIS) [4,16,17].
In addition, technolog ical capability can also be classi-
fied in terms of basic and key skills required by firms
operating in a given country. These are the skills and
knowledge required by firms to start a new business or
upgrade an existing one. This type of technological ca-
pability is needed b y firm to choose, install and operate a
set of modern machinery and equipment that are widely
used in a given industry. Basic technological cap ability is
readily available to all co mpetitors and it is the minimum
requirement for standard production [9]. Key techno-
logical capability is required for the management of the
effect of a technological change in a particular industry
or system. It can be defined as the skills and knowledge
required to operate, maintain, adapt and to improve on
existing technologies. It gives the firm a competitive
edge over other competitors and also allows the firm to
compete favorably at the international market [9]. Fur-
thermore, key technological capability can also create a
technological change in an industry, where it discontin-
ues an existing system and creates a new one.
Technological capability is composed of two broad
elements, namely embodied and disembodied. The em-
bodied elements of technological capability are tho se that
involve the human aspect. It includes the skills, knowl-
edge, attitude and aptitude. It is generally believed that
these types of elements are tacit in nature and very diffi-
cult to measure or transfer [16]. The second is the non-
embodied/disembodied elements. These are the part of
technological capab ilities that are codified and can easily
be transferred among users. These include equipment and
software [16].
2.2. Indicators for Measuring Technological
At the firm-level, there are many indicators for measure-
Copyright © 2012 SciRes. AJIBM
Technological Capability in Metal Fabricating Firms in Southwestern Nigeria
ing technological capabilities. These are based on the
level of complexity and functionality of the four main
categories of technological capabilities which include
investment, production, innovation and linkage capabili-
ties [5,7].
2.2.1. Investment Capability
Investment capability is described as the skills and in-
formation needed to id entify feasible investment projects;
prepare, locate and purchase technologies; staff, design
and manage construction; commissioning and start-up.
Under investment capability, the pre-feasibility and de-
tailed feasibility study are prepared for the identified
projects to determine the capital cost, sponsors, the ap-
propriateness of the scale, product mix, technology and
equipment to be used. The ability to undertake this pro-
cess in-house has been considered to be important for
firms [9].
Also, the economic viability and technical feasibility
of the new project must be critically analyzed to deter-
mine the best combination of options for the project. This
capability has been found to be very low among the Af-
rican enterprises when compared with their counterpart
from the industrialized and newly industrialized nations
[7]. Alternatively, this function can be contracted out to
be conducted by more experienced domestic or foreign
firms that can help to perform the function effectively
and efficiently. However, the method of external contract
as observed, sometimes comes with its own associated
challenges such as increase in the project’s capital costs
and the “not invented here” syndrome which make it
difficult for the recipient to master, adapt and subse-
quently upgr ade the technology [9].
2.2.2. Production Capability
Production capability is referred to as the skills and
knowledge required for the operation of the production
facilities. That is, once the two stages under the invest-
ment capability (Pre-investment and Project execution)
have been co mpleted, the production facilities need to be
operated for optimum production . In achieving th is, three
different stages of activities with different levels of com-
plexity were proposed in the literature. These are process
engineering, product engineering and industrial engi-
neering [5,7]. These three different activities combined
together foster efficient and effective operation, mainte-
nance, adaptation, improvement, quality and inventory
control, work flow and sch eduling, monitoring and so on
for the newly commissioned production facilities [5 ,7,18].
In addition, Biggs [7] note that industrial engineering
skills requires a good knowledge of mathematical, statis-
tical and organizational techniques; time and motion
studies; and layout and materials-handling analysis
which will help to achieve productivity improvement
through the change of time and sequence of manufactur-
ing and aux iliary operations [7].
2.2.3. Technology Innovation
Innovation is the creation of value. It is an economic
phenomenon involving the commercial use of new idea.
Khalil [1] argued that inn ovation represents the important
connection between an idea and its exploitation or com-
mercialization. In the actual sense, innovation occurs
after the first commercial transaction resulting from the
introduction of the new product, process, or system.
However, the length of time that usually separates the
discovery of an invention, its application and exploitation
which before now could take several years, have also
reduced drastically. Also, innovation is a complex phe-
nomenon [19] and like entrepreneurship, it appears in
many fields of study [18]. Notwithstanding the largely
shared views on the importance of innovation, several
definitions for innovation types have been developed,
resulting in an ambiguity in the term innovation [20]. To
this end, this study define innovation as the scientific,
technical, commercial and financial steps necessary for
the successful development and marketing of new or
improved processes, products or equipment; or the in-
troduction of new approach to manufacturing activity
2.2.4. Innovatio n Capability
Innovation capability is knowledge and skills needed to
find new ways of carrying out the firm’s activities such
as investment, production, marketing and organizational
as well as their implementation. Egbetokun [18] de-
scribed innovation capability as ‘search’ capabilities and
the capacity to actualize the outcome of the searching
process. He further observed that the search for new rou-
tines is likely to create new patterns of human resource
development, R & D, technological information, techno-
logical adaptations and market research. Romijn [17]
citing Lall [5] also defined innovation capability as the
skills and knowledge needed to effectively absorb, mas-
ter and improve existing technologies and to create new
ones. Innovation capability has always been used for
various organizational activities which cover ability to
invent, innovate and improve existing technology beyond
the original design parameters [21]. Therefore, for the
purpose of this study, innovation capability will be re-
ferred to as the ability to make minor improvement and
modifications to existing technologies and to create new
2.2.5. Linkage Capability
Linkage capability is a system used for transmitting and
receiving supportive information at three different levels.
These are within an enterprise; with other enterprises
Copyright © 2012 SciRes. AJIBM
Technological Capability in Metal Fabricating Firms in Southwestern Nigeria
Copyright © 2012 SciRes. AJIBM
(intra-industry and inter-indu stry); and with R & D insti-
tutions (local and overseas), including Universities [22].
Lall [23] conceived this capability as tho se skills that are
required for transmitting information, skills and technol-
ogy to, and receive them from component/raw material
suppliers, customers, subcontractors, consultants, service
firms and technology institutions. Linkage capability
forms the basis for interaction among the above men-
tioned agents. It also boost access to information about
markets, technologies, technical assistance, research and
technical knowledge [24] as well as learning facilities, on
which the process of building technological capability
lies. Other observed forms of linkages as highlighted by
Egbetokun [18] include licensing, management and mar-
keting agreements; joint ventures; interaction with local
and foreign competitors; government policy and regula-
tions, interactions with domestic and international fi-
nance institutions and so on.
3. Research Methodology
To determine the technological capability of individual
fabricating firm in the study area, random sampling tech-
niques was employed in taking sample of 200 metal fab-
ricating firms from the registers of the Manufacturers
Association of Nigeria (metal fabrication sub-section)
and the State Ministry of Commerce and Industry. The
survey covers Lagos and Ogun States in Southwestern
Nigeria. Lagos State was selected because of the high
industrial activities which have contributed to the large
population and clustering of many manufacturing firms
in the area, while Ogun State was selected due to the
influx of manufacturing firms to the area in search of a
large factory space for their manufacturing operations. A
set of questionnaire was used for collection of the pri-
mary data from the respondents. Draft of the question-
naire adapted from similar studies elsewhere was sent to
six purposively selected individual stakeholders in the
academics, government research institutes and the Indus-
try as a pre-test. The data collected were subjected to
reliability test (Cronbach’s α: 0.839 t o 0.855) .
Technological capability ind ex (TCI) which composed
of four (4) variables was developed. These variables are
investment, production, innovation and linkage capabili-
ties. Each of these variables represents the taxonomies of
technological capability developed by Lall [5] and has
been widely adopted and used as a standard for opera-
tionalizing technological capability at micro-level [25].
The variables measured were grouped into investment;
process, product and industrial engineering; process and
product innovation; and linkage functional areas. The
variables were further graded using a rating scale of 2
(systematic), 1 (ad-hoc), and 0 (None) which represents
different level of competence. A firm is however award-
ed a score based on its leve l of competen ce in perfo rming
these technical functions as described under each of the
variables. In all, a given metal fabricating firm was as-
sessed out of a total capability score of fifty two (52),
and the result was normalized between 0 and 2 to give
the TCI.
4. Results and Discussions
4.1. Investment Capability of Responding Firms
Table 1 shows the investment capability of responding
firms. Investment capabilities, as noted earlier, are the
skills and information needed to identify feasible invest-
ment projects, locate and purchase suitable technologies,
design and engineer the plant, and manage the construc-
tion, commission and start-up. The response confirms
that majority of the firms in the surv ey were above aver-
age in the area of investment capability. The percentage
of firms that indicated no compliance with investment
functions were 2.3%, 31.6% and 39.1% for search and
selection of technology; detailed engineering; and re-
cruitment and training of technical personnel activities
respectively. However, about half of those that indicated
their compliance with pre-investment and project execu-
tion activities did so in an unplann ed mann er (Ad-hoc).
4.2. Production Capability
Production capability was considered under process,
product and industrial engineering functions. These func-
tions include debugging and calibration of new equip-
ment, replacing original equipment parts, quality control,
Table 1. Investment capability of the responding firms.
Investment functions No Ad-hoc Systematic
Feasibility studies for new factories, workshop or projects - 87(62.6) 46(34.6)
Search for & select technology for new projects 3(2.3) 69(51.9) 61(45.9)
Detailed engineering for new projects 42(31.6) 45(33.8) 46(34.6)
Construction of workshop facilities - 121(91.0) 12(9.0)
Recruitmen t & training of tec hnical personnel 52(39.1) 43(32.3) 38(28.6)
ote: Figures in parentheses are row percentages.
Technological Capability in Metal Fabricating Firms in Southwestern Nigeria
reproduction of fixed specifications and designs, ac-
creditation and certification of product quality, design
and introduction of new products in-house, operation of
inventory control system, scheduling production, and
monitoring of productivity. Tabl e 2 shows that firms dis-
played capability in production th at was similar to that of
investment capability except for accreditation/certifi-
cation of pro duct qu ality (56.4 %) that was above av erage
for no compliance. Also, other activities were mostly con-
ducted in a manner that is either systematic or ad-hoc.
4.3. Innovation Capability
Innovation capability co ns ists of the poten tial o f a firm to
search for ways of carrying out its key activities and the
capacity to internalize the outcome of such searches. Ta-
ble 3 shows that 97.0% and 75.2% firms did not under-
stand the function of process innovation as a strategy for
developing new production method and modification to
existing production process respectively. Other activities
followed the observed pattern of well above average
compliance in capability.
4.4. Linkage Capability
Interactions with various actors in the National Innova-
tion System constitute one of the most important learning
and innovation efforts for African firms [18,23,26]. How-
ever, Table 4 shows a weak linkage capability between
the firms and actors in the National Innovation System
except for collaboration with the trade association where
91.0% of the firms demonstrated high level of formal
cooperation. This suggests that firms in the fabriccating
industry, whether in the formal or informal sector, belong
to one form of trade association. Similarly, networking
with other fabricating firms are 60.2% ad-hoc and 9.0%
systematic; while collaboration with customers/suppliers
are 66.2% ad-hoc and 12.0% systematic. Firms in the
study area have poor linkage activity with educational
and research institutes (91.7%) and financial institution
4.5. Innovations in the Metal Fabricating Firms
Table 5 shows the sampled firms degree of novelty. The
Table 2. Production capability of the responding firms.
Production functions No Ad-hoc Systematic
Debugging & calibra tion of new equipment 59(44.4) 27(20.3) 47(35.3)
Do routine maintenance operation 65(48.9) 40(30.1) 28(21.1)
Replacing original equipment parts 28(21.1) 77(57.9) 28(21.1)
Quality control (Automated/Vision) - 100(75.2) 33(24.8)
Reproduce fixed specifications and designs - 48(36.1) 85(63.9)
Accreditation/certification of product quality 75(56.4) 42(31.6) 16(12.0)
Design & introducing new products in-house 42(31.6) 53(39.8) 38(28.6)
Operating inventory control system 18(13.5) 78(58.6) 37(27.8)
Scheduling production - 72(54.1) 61(45.9)
Monitoring of productivity - 100( 75 .2) 33(24.8)
Note: Figures in parentheses are row percentages.
Table 3. Innovation capability of the responding firms.
Innovation func tio ns No Ad-hoc Systematic
Develop new production method 129(97.0) 4(3.0) -
Introduce new produ c t ion method - 50(37.6) 83(62.4)
Modification to exist i n g p roduction method 100(75.2) 33(24.8) -
Develop new product(s) 30(22.6) 67(50.4) 36(27.1)
Copy/imitation o f imported produ ct (s) 6(4.5) 40(30.1) 87(65.4)
Modification to exist i n g p roduct(s) 19(14.3) 34(25.6) 80(60.2)
Note: Figures in parentheses are row percentages.
Copyright © 2012 SciRes. AJIBM
Technological Capability in Metal Fabricating Firms in Southwestern Nigeria 181
Table 4. Linkage capability of the r esponding firms.
Linkage functions No Ad-hoc Systematic
Networking with other firms 41(30.8) 80(60.2) 12(9.0)
Association with trade union 12(9.0) - 121(91.0)
Collaboration with educational and research institutes 122(91.7) - 12(8.3)
Relationship with customers/suppliers 29(21.8) 88(66.2) 16(12.0)
Relationship with financial institution 97(72.9) - 36(27.1)
Note: Figures in parentheses are row percentages.
Table 5. Innovation in the metal fabricating firms.
Degree of novelty Product Process
Radical innovation - 36(27.1)
Incremental innovation 33(24.8) 114(85.8)
New to the firm/ imitation 133(100.0) 127(95.5)
Creativity 4(3.0) 67(50.4)
Note: Figures in parentheses are sample percentages.
objects of innovation observed are classified into radical,
incremental, new to the firm/imitation and creativity.
Process innovation is very weak throughout the industry.
There were however 33(24.8%) and 4(3.0%) cases of
incremental innovation and creativity respectively. Also,
133(100%) firms confirmed the introduction of new
production method (new to the firm) into their business
as part of their innovative effort. By contrast, product
innovation is high ly prevalent throughout the sector with
the incidence of radical (27.1%), incremental (85.8%),
imitation/copying (95.5%) and creativity (50.4%) active-
ties in the industry. Only, ‘new to the firm’ type of proc-
ess innovation agree with the findings of Egbetokun [8]
in their study of innovation capability in the cable and
wire manufacturing industry in Nigeria, where the inci-
dence of process innovation (0.8) was higher than prod-
uct innovation (0.6).
4.6. Technological Capability Index
Table 6 shows the frequency distribution of the techno-
logical capability index (TCI) scores for the 133 metal
fabricating firms. The data shows a variation in the TCI
scores of fabricating firms in relation to the size of firms.
Almost all the medium-size firms had scores of between
1.41 and 1.80 except one (1) firm which has a score be-
low 1.41. The TCI scores for majority of the micro firms
were between 0.61 to 1.00 while most small firms had
TCI scores of between 1.01 - 1.40. From this result,
while the medium firms (1.41 - 1.60 and 1.61 - 1.80) had
technological capabilities that compared well with those
found in the developed countries; however, the overall
Table 6. Technological capability index by firm size.
Firm size
TCI class Micro Small Medium
0.00 - 0.20 - - -
0.21 - 0.40 - - -
0.41 - 0.60 - - -
0.61 - 0.80 29 1 -
0.81 - 1.00 24 17 -
1.01 - 1.20 6 22 -
1.21 - 1.40 - 16 1
1.41 - 1.60 - - 12
1.61 - 1.80 - - 5
1.81 - 2.00 - - -
Total 59 56 18
technological capability of th e firms sampled is far below
the average obtainable in the fabricating industry interna-
Average Technological Capability Index
Table 7 shows the average TCI scores for all firms ac-
cording to their size; and the corresponding average
scores for individual capabilities (INVT I., PDTN I.,
INNO I., and LNKG I.) that make-up the TCI scores.
The average TCI clearly shows a better result according
to the firm size. It reveals the difference in the level of
technological capability among the various firm sizes
(micro, small, and medium) of metal fabricating firms in
Southwestern Nigeria. The micro firms have an average
TCI score of 0.82, which is considered to be very low,
and even below the total average TCI scores (1.00). The
average TCI score (1.10) of the small firms is a little
above the average TCI score. The medium scale firms
have an average TCI score of 1.54 which is considered to
be the highest. Further analysis based on the individual
capabilities that make up the TCI revealed the differences
Copyright © 2012 SciRes. AJIBM
Technological Capability in Metal Fabricating Firms in Southwestern Nigeria
Table 7. Distribution of average TCI.
Micro 59 0.82 0.93 0.84 0.82 0.68
Small 56 1.10 1.17 1.15 1.13 0.89
Medium 18 1.54 1.89 1.73 1.20 1.22
Note: N indicates number of firms; TCI—Technological Capability Index;
INVT. I—Investment Index; PDTN. I—Production Index; INNO. I—Inno-
vation index; LNKG. I—Linkage Index.
and the nature of technological activities of all the sectors
(micro, small, and medium) of sampled firms. The in-
vestment index reveals that the micro, small, and mediu m
firms had scores of 0.93, 1.17 and 1.89 respectively.
Comparably, the data suggests a big technological gap in
the investment capability when a comparison is made
between micro, small and medium firms. Also, produc-
tion and linkage capabilities fo llowed a similar pattern as
observed in the investment capability. The production
index scores were micro (0.84), small (1.15) and medium
(1.73) firms for production capability while the linkage
index scores are 0.68, 0.89 and 1.22 for micro, small and
medium firms respectively for linkage capability.
Furthermore, by comparing the difference among these
capabilities that followed the same pattern, production
capability presented a difference value of 0.58. This
could be as the result of some quality control tests like
Pressure test, Radiography (X-ray), fatigue and hydro
test conducted by medium firms on their various metal
products. Whereas, the micro and small enterprises most-
ly based their quality control on much of raw materials
selection, vision and hydro test of their finished products.
They did not perceive any advantage that pro duct quality
certification provides to their business, as none of the
products of the firms was certified. In a similar manner,
linkage capability showed a difference of 0.33 between
the medium and small firms. This suggests that medium
firms have better networking arrangement with other
MSMEs fabricating firms. The medium firms on many
occasions engage the services of the other firms by out-
sourcing part of their on-going projects to these firms.
This type of relationship has numerous advantages of
transferring the best practice from the medium firms to
the micro firms in the sector. However, networking with
other fabricating firms between small and micro firms
seems to be absent or weak where available. Lastly, in-
vestment capability revealed a capability difference of
0.72 between the medium and small fabricating firms.
This difference reflects in the way medium firms conduct
their recruitment and training exercise for new technical
staff. Also, innovation capability sho ws a similar pattern.
The innovation index scores are 0.82, 1.13 and 1.20 for
the micro, small and medium firms respectively, with
medium firms coming out stronger than other category of
sampled firms. In addition, innovation index scores seem
to explain the difference in the average TCI scores be-
tween medium and small firms. This suggests that small
and medium firms are good imitators. They seem to
adopt technolog y follower strategy [27] as a catch-up for
developing their technological capab ility.
5. Conclusion and Recommendations
Majority of the micro and small fabricating firms in south-
western Nigeria had low technological capability. This
was found to be lower than that obtainable in the industry.
However, the medium fabricating firms operating in the
same area have a technological capability which is at par
with international best practice in the metal fabricating
industry. Metal fabricating firms in southwestern Nigeria
seems to have considerable capability in investment and
production, while their performance in innovation and
linkage capabilities are weak. The major innovations
found among the metal fabricating firms in Southwestern
Nigeria are products and introduction of new production
method, while process innovations is still lacking. In ad-
dition, the main sources of innovations for the fabricating
firms are imitations and copying from imported pro ducts.
The study concludes that th ere is need for policy inter-
vention to enhance the knowledge and skills of these
operators with a view to improving the technological cap-
ability and productivity of the metal fabricating firms.
This will enhance their national competitiveness and
comparative advantage in the globalized economy.
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