The adoption and impact of Internet-based technological innovations on the performance of the industrial cluster firms

Abstract

Knowledge-driven economy tends to enjoy tremendous technological transformation due to rapid advances in new technologies, which have given rise to a disruptive technological revolution known as the “Industry 4.0 or Fourth Industrial Revolution (4IR)” with profound impacts on firms. The adoption of Internet-based technological innovations (IBTI) indicates a critical paradigm shift that transforms the status quo by which firms’ relationships are built across borders, compete in markets, interact with their customers and ensures the flow of economic benefits. However, there is limited study known in the literature to have assessed the adoption dynamics and phenomena of IBTI in industrial clusters, and also the evidence on the impact of the technological innovations on the performance of industrial clusters in Nigeria are scarce. The results show that despite the low level of investment and expenditure on Internet-based systems and infrastructure in the Nigerian fast-moving consumer goods clusters, the adoption of IBTI have beneficial effects on firms’ capabilities and growth, customer relationships, product/service features and firm’s reputation. Holistically, the study reveals that the level of the adoption of IBTI is significantly low as the fast-moving consumer goods firms still currently utilize a combination of IBTI with internally owned IT systems in operations. This is an indication that the fast-moving consumer goods industry is still a late majority adopter of the disruptive technologies. This poses a threat to the industry, especially in this era of 4IR. Thus, the Nigerian industrial sector needs to be proactive and keep up with the rising use of disruptive and digital technologies, so as to maintain their competitive advantage.