Technological Capabilities in Informal Sectors: A case of the Bakery Industry in Southwestern Nigeria

Abstract

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The informal sector employs the largest share of labour in developing countries and it is considered to be a fertile ground for growing the technological capabilities needed for economic development. This study examined technological capabilities in the bread baking industry in Nigeria with a view to inform policy formulation. Data were collected on three constructs of technological capability namely; investment, production and linkage capabilities of the industry through questionnaire administration on 200 bakers. The results reveal strong production capabilities in the sector, albeit in using traditional production technologies. Investment and linkage capabilities were however shown to be weak. The former was due to the restriction of source of funding to personal savings, family members and cooperatives. Linkages with knowledge institutions such as universities, polytechnics and R&D institutions were also found to be very weak.  These weaknesses may be the leading cause of being unable to purchase and use modern technologies in the sector effectively. The study concluded that the sector may be caught in the trap of being restricted to low-tech based production equipment. Recommendations include availing the industry access to innovative financial instruments to enhance access to funds and professional help in conducting feasibility studies to identify and acquire relevant modern technologies. In addition, setting up platforms for linkages with knowledge intensive institutions may enhance production capabilities in using new production processes and ease transition to utilizing modern technologies.

Suggested citation

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(2022). Technological Capabilities in Informal Sectors: A case of the Bakery Industry in Southwestern NigeriaAfrican Journal of Science Policy and Innovation Management, 3(1). https://doi.org/10.69798/34104433

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