Knowledge Sharing and Innovation as it affects the Local Content in the Oil and Gas Industry in Nigeria

Abstract

This study assessed the factors hampering innovation and knowledge sharing in indigenous oil and gas firms in Nigeria. The aim was to provide information that will increase knowledge sharing among the indigenous in the sector and create added value, which is needed to improve the local content within the industry. The study used primary and secondary data sources. One hundred firms were sampled. A structured questionnaire was administered to the firms. This was supplemented with field observations and interviews. A total of 100 questionnaires were administered to heads of production and engineering departments in the firms with a 70% response rate. Secondary data were obtained from published sources. The data were analysed using descriptive statistics. The study found that the challenge of innovation centred on high costs, lack of skilled personnel, especially in their R&D departments and poor economic conditions in the country. However, an estimated 30% of the firms were innovation active in the period 2001 to 2010. The reasons why these firms innovated were to take advantage of new technology, lower production costs and to stake out market position while competing with their foreign counterparts. The study also found that the principal initiators of innovation in the firms included information from the parent firm (for those that operated as subsidiaries), competitors, clients/customers and suppliers. The study concluded by providing policy recommendations that would increase indigenous participation in the industry while stating clearly what roles the industry, government and academia will play to achieve Nigeria's desired local content status.

Keywords:

• Innovation
• Foreign firms
• Indigenous firms
• Knowledge sharing
• Local content