Fredrick Agboma Centre for Development Informatics University of Manchester, UK

1. Researching with Multiple Frameworks: Triangulated Assessment of Entrepreneurship in the Nigerian IT Sector Fredrick Agboma Centre for Development Informatics University of Manchester, UK http://www.manchester.ac.uk/cdi Centre for Development Informatics

2. Outline • Why IT sector entrepreneurship • Research objective and scope • Need for triangulation • Triangulated frameworks • Findings • Lessons learnt

3. Why IT sector enterprises • A recognition of the IT sector as a key determinant of socio-economic development (Murphy, 2003); it harbours a wide range of IT enterprises that lie at the heart of competitive advantage (Guerrier, 2005). • Little is known about IT sector micro-enterprises in Nigeria and more generally developing countries (Eggleston et al., 2002; Heeks, 2006; Molla, 2000). • 1/6 of all registered small enterprises in Benin City, Nigeria, are PC/Internet-related micro-enterprises. If we could extrapolate that figure, it would suggest 100,000 such enterprises across all of Africa (Heeks, 2010).

4. Objective and scope • Following Wennekers and Thurik (1999) who distinguish between national, industry, and individual levels of analysis in establishing the role of entrepreneurship in economic development, this research takes a multi-level, business-oriented perspective: The first level of analysis is conducted at that national level where intending entrepreneurs are required to seek out IT sector resources necessary to start, sustain and grow their enterprises. The second level of analysis is carried-out at the industry level, it deals with the interaction between key stakeholders and how these relationships affect the nature of competition within the sector. The third level of analysis is focused on the individual firm level, it aims to understand why and how enterprising Nigerians plan and execute entrepreneurial strategies.

5. The need for triangulation • Like most business related research, IT sector entrepreneurship is concerned with the social world and as researchers, the application of a singular perspective only allows for a partial understanding of such a complex, multi-dimensional concept. • The conceptualisation of triangulation that most appropriately reflects the approach adopted is one where the research process is informed by more than a single academic discipline/theory - 'interdisciplinary theoretical triangulation’. • Porter’s Diamond and Competitive/Five Forces Framework (FFF) are used to assess national and industry level influences respectively, while Individual level influences are assessed using Azjen’s Theory of Planned Behaviour (TPB).

6. Porter’s (1990) Diamond • The Diamond directs attention to the independent variables (resources) that determine competitive advantage for different production sectors. • Factor conditions represent human, capital and infrastructural resources. They can be basic/generalised or advanced/specialized. • FSS&R represent the conditions governing the nature of how companies are created, organized and managed. • Demand condition represent the nature of (home) demand. • R&SI represent the presence or absence of supplier and related industries that are themselves competitive.

7. Porter’s (1980) FFF • The FFF is useful for assessing the competitive strategies and profit potential of industries. Within the framework, industry level competition is rooted in the underlying social and economic agendas of a diverse range on of forces (stakeholders). • Porter recognises government as a key competitive force because its regulations can modify the behaviour of firms. However, its role is shaped by politics (through policies) rather than a need for profit.

8. Ajzen’s (1991)TPB • The principal feature of the TPB revolves around an individual’s intention to carry out a given behaviour. • The three distinct precursors to an intention include: (1) an individual’s Attitude toward the target behaviour; (2) Social Norms, which relate to the perceived need to conform to social requirements; and (3) Perceived Behavioural Control, which concerns the level of ease or difficulty involved in transforming an intention into the actual behaviour.

9. National Level Porter’s Diamond Industry Level Porter’s FFF Individual Level Ajzen’s TPB But then there is a problem of connectivity, how do we connect these different frameworks? IT Sector Entrepreneurship

10. Solving the connectivity problem • In order to impose a logic and achieve internal, institutionalism works as both an additional theoretical foundation, but also a means to connect both in terms of theories, and in terms of levels. • Institutional framework has a formal or state-like dimension made up of policies and legislations as well as an informal dimension where society more generally has the opportunity to call to order how we behave (North, 1990). • This general sociological theory is thought to identify important sources of homogeneity at different levels of analysis (Thornton, 1991; Walsham, and Sahay, 2006). This is instantiated by the insistent focus on how the institutional framework condition IT sector entrepreneurs and their enterprises, be it at the national level with the diamond framework, the industry level with the FFF or the individual level with the TPB.

11. National Level Porter’s Diamond Industry Level Porter’s FFF Individual Level Ajzen’s TPB Institutional Framework IT Sector Entrepreneurship

12. Findings – national Level • The analysis showed formal institutions that provide resources for IT sector enterprises do exist and more generally provided the bases/foundation for competitiveness. • However, these are not well attuned to the IT sector, and generally fail to provide the necessary advanced and specialized resources to sufficiently bring the sector to a competitive level. • As a consequence, IT sector firms/entrepreneurs turn to informal institutional mechanisms in search for resources that enhance competitiveness and engender success. While these efforts are laudable, an over-reliance on informal aspects of the institutional environment does pose its own competitive constraint on the resources entrepreneurs seek.

13. Findings – industry level • Similar to the national level, analysis of three industry segments (Software, Internet Services and Computer Training) suggests that entrepreneurs that operate in these industries tend to rely more on informal institutions, and their actions and interactions with other industry stakeholders are shaped by these informal forces. • In addition to the very geographically-localised nature of the industries, this was linked to a short supply of skill, technology, capital and the general state of resource poverty at the national level. • More specifically, the industry level analysis shows the impact of IT sector specific issues such as the knowledge requirements, the ongoing strong demand growth in the country and more general issues such as a short supply of information and the way in which ideas of competitive strategy are undercut by the strength of social relations.

14. Findings – individual level • The results reveal inner and/or hidden processes on how IT micro-entrepreneurs respond to situational factors and what incentives motivate them. • IT sector entry is seen as second-best to formal employment. This ‘necessity based activity’ reflects an environment where some underlying attitudes and dispositions toward entrepreneurship are unfavourable and counterproductive. Yet, other underlying values about the need to earn and the need to be seen to succeed help maintain the impetus to enterprise. • Formal institutions have had a key influence on intentions towards entrepreneurship in the IT sector. Part of this relates to the reform and liberalization of the telecommunications sector which enabled entrepreneurship in markets that were previously outside the reach of potential entrepreneurs.

15. Findings – individual level (cont.) • Entrepreneurs are grouped into ‘technology push’ and ‘business pull’ depending on the informally developed technical or business capabilities that influence key entrepreneurial decisions.

16. Findings – Triangulated • Kenyon (2007, p. 2) points to “informality as a form of state failure”, and a rational response to inefficient formal institutions. In the assessment of entrepreneurship in the Nigerian IT sector this is manifested at all three levels of analysis; IT entrepreneurs are mostly conditioned to base strategic decisions around informally developed resources, values, beliefs, attitudes and behaviours from the wider society. • We see a variety of instances where entrepreneurs exhibit behavioural patterns that differ from those described by established frameworks (Cousins and Menguc, 2006). The IT sector, the industries within as well as constituents such as firms and entrepreneurs may not formulate strategies in a wholly rational and objective manner. • Entrepreneurs substitute rational analysis for institutional guidance (Majumdar, 2005; Meyer et al, 1983 cited in Haveman, 1993).

17. Lessons learnt • This study contributes to research and practice by providing rich insights and knowledge of the little-studied question of how environmental conditions influence IT sector entrepreneurship in developing countries. • For practice, such an assessment of the IT sector is an important analytical tool. It provides an invaluable backdrop as well as a contextual guide for policy makers to direct the country’s IT and entrepreneurship developmental process (Tan and Leewongcharoen, 2005). • From a theoretical or research perspective, we see that logical frameworks for research and analysis may not always have the capacity to reveal the 'full story', at least not when they are applied on their own. Such an ‘interdisciplinary theoretical triangulation’ is employed to give a more complete explanation of a multi-dimensional phenomena like entrepreneurship.

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20. Further Information agboma_fred@hotmail.com fredrick.agboma@manchester.ac.uk