Innovation characteristics of formal manufacturing firms in Uganda

Abstract

Manufacturing firms ought to innovate in order to stay competitive in a highly liberalised and open economy. This is even more crucial in low income countries, which seek accelerated economic growth and transformation. In this paper, we describe innovation characteristics of formal manufacturing firms in Uganda, in the subsectors of food and beverages, chemicals and pharmaceuticals. We show from empirical findings that formal manufacturing firms in the aforementioned subsectors in Uganda are active in incremental and adaptive innovations. The innovations are accomplished in-house with some assistance from other firms abroad. Local universities and research organisations appear not to be participating much in formal manufacturing firms' innovation processes. The challenge, from the perspective of firms, is fear of competition and lack of trust. Universities and research organisations, on the other hand, need to be proactive in engaging firms. Conferences, business associations, inter-firm visits, and joint programmes are some of the firm-preferred means of fostering interactions between firms, universities and other organisations. Innovation capabilities of Ugandan manufacturing firms could be enhanced if local universities and research organisations become more actively involved in firm innovation processes.