Strategies for Entrepreneurship and Market Innovation by KIBS in Developing Economies

Abstract

Knowledge-Intensive Business Services (KIBS) is the fastest growing sector globally with the focus on market innovation but lacks empirical research in developing economies. Thus, this paper investigates the strategies for entrepreneurship and market innovation by Knowledge-Intensive Business Services in developing economies .A framework is built in which KIBS small and medium sized enterprises (SMEs) employ radical innovation or market pioneering strategy for market innovation through knowledge acquired from theformal and informal institutions. Four hypotheses are developed and tested. Data is collected from 510 SMEs in KIBS sector of Lagos at firm level and analyzed.The results suggest that the main strategy for market innovation is market pioneering and the knowledge is acquired from informal institutions.The findings could assist in formulating policy agendas for promoting market innovation by KIBS SMEs in developing economies. It is recommended that the informal institutionsbe recognized as a significant part of institutional system for innovation in developing economies.

Keywords: Institutions, new market innovation, developing economies, SMEs, Knowledge-Intensive Business Services (KIBS).