DIGITAL INNOVATION STRATEGY AND PERFORMANCE OF MANUFACTURING FIRMS IN NAIROBI COUNTY, KENYA

Jattani Galgallo Wako, Dr. Mary Mwanzia

Abstract


The manufacturing sector is a critical component of Kenya's economy, contributing significantly to employment, GDP, and export earnings. However, firms in Nairobi County, the industrial hub of the country, face numerous challenges including high operational costs, inefficient production processes, and stiff competition both locally and globally. The general objective of the study was to determine the effect of digital innovation strategy on performance of Manufacturing Firms in Nairobi County, Kenya. Specifically, the study sought to assess the effect of process innovation on performance of manufacturing firms in Nairobi, Kenya and to analyze the effect of Market innovations on performance of manufacturing firms in Nairobi, Kenya. The study used descriptive survey design. The target population for this study was manufacturing companies in Nairobi County. According to Kenya Association of Manufacturers (KAM, 2022), there are 91 medium Food and beverage manufacturing companies in Nairobi County. These manufacturing firms were the unit of analysis while the management employees were the unit of observation. The object from which information is obtained is referred to as a unit of observation. Therefore, 546 managers in the 91 manufacturing companies were targeted. The Yamane formula was adopted to calculate the study sample size. Therefore, the study sample size was 231 respondents. The stratified random sampling method was adopted to select the study sample size. This study used primary data collected using a semi- structured questionnaire. Statistical Package for Social Sciences (SPSS) was used to analyze the data. Descriptive and inferential statistics was computed and findings presented in tables and figures. The study concludes that process innovation has a positive and significant effect on performance of manufacturing firms in Nairobi, Kenya. The study also concludes that market innovations have a positive and significant effect on performance of manufacturing firms in Nairobi, Kenya. Based on the findings, the study recommends that the management of manufacturing firms in Kenya should implement advanced automation technologies. By incorporating automation into production processes, firms can achieve greater efficiency, reduce error rates, and lower labor costs. Automation tools, such as robotic systems and smart sensors, can streamline operations, enhance precision, and accelerate production timelines.

Key Words: Digital Innovation Strategy, process innovation, Market innovations, Performance of Manufacturing Firms


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