In this piece, i was interested in finding out why innovation projects prematurely stop, or abandon, or slow down, or not to start at all, using statistical information from a sampled innovation survey i conducted within six (6) establishments (which includes;
* Food Research Institute, CSIR, Accra;
* STEPRI-CSIR, Accra;
* Katanka Automobile company, winneba;
* Coastal TV, cape coast;
*Center of Awareness traditional innovation health center (COA),cape coast;
*Suame Magazine Industrial Development (SMIDO), Kumasi.
The objective of this contribution is threefold;
Firstly, i collected the evidence data from the above innovation establishments through a direct interview. The questions were based on the ‘obstacles to their innovations and their impacts and possible measures’.
Secondly, i compare the evidence data from empirical studies on other establishments.
Thirdly, i discuss the policy implications of the empirical findings as well as alternative solutions to remove or to by-pass these obstacles.
Lastly, presented some conclusion remarks.
Obstacles to innovation and their impact: some facts.
In the survey covering six establishments, innovative firms were asked to answer some detailed questions about the hampering factors and their consequences for their innovative projects. The hampering factors they exposed and stipulated were;
(1) uncertainty of future market development;
(2) lack of qualified personnel;
(3) lack of knowledge on technologies needed;
(4) economic uncertainty,
(5) organizational rigidities,
(6) and existing of regulation.
Also, the financial factors or constraints they exposed as a hindrance include;
Firstly, providing convincing signals about the quality of the innovation projects is costly, lack of appropriate sources of finance.
Secondly, the difficulty of using intangible assets as collateral also leads to increased costs of external capital in the form of risk premium, where they prefer to use internal funds over external debt and finally new equity to finance innovation investment.
Thirdly, information asymmetry problem hinders the financing of their innovation, where some innovations are reluctant to share with outside investors information about their innovation to enable them invest or finance them.
Lastly, lack of business angel finance, who will provide capital for business start-ups in exchange of ownership equity.
Both hampering factors and financial constraints lead to delaying of innovation projects, prematurely stopping, abandoning, or not starting innovation projects at all.
Establishing the relationship between the variables in the research or findings using linear regression, hampering factors are more of significant higher to them at 58% than the financial factors of 42%.
The finding that about 58% of the firms that answered the interview reported to have been hampered in one way or the other, and that about 42% reported to have been financially constrained.
Conclusion remarks and way forward.
Science, Technology and Innovation are solid building rock for industrialization and economic growth. My analysis led me to conclude that the constraints faced by innovative firms are important and have had a major negative impact on innovative activities.
*Treatment of Research and Development (R&D) should be favorable;
*policy mix packages must exist to support small innovative firms;
*venture capital financing should experience a significant boost, as well as *business angel investors to mitigate the financing problems.
*There should be a creation and investment in human capital and diffuse technological opportunities and products.
*Facilitate regulation for technologies, materials, and products that may enlarge the market and enhance market access.
*Need to legitimize technology and firms
*To direct technology, market, and partner research
*to incubate in order to provide facilities, equipment, and administrative support.
The researcher is a holder Master of Science (Msc) in Economics of Technology, innovation and development, Graduate School, Economics department, University of Cape Coast (UCC).
BA(Econs),ACE, Msc(Econs Tech)
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