Gezahegn Tesfaye, Ph.D. student at Addis Ababa University, Addis Ababa Insttute of Technology, School of Mechanical and Industrial Engineering, Addis Ababa, Ethiopia, e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Daniel Kitaw, Full Professor, Addis Ababa University, Addis Ababa Insttute of Technology, School of Mechanical and Industrial Engineering, Addis Ababa, Ethiopia, e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Abstract

Firms in developing natons possess low innovaton capabilites due to the absence of an adequate conceptual model that consolidates the innovaton capability development (ICD) constructs tailored to their needs. To describe the ICD in these frms, research fndings should have consolidated both the technical and fnancial aspects of innovaton. However, they have provided only a litle account of informaton on the ICD process via integratng the technical and fnancial aspects of innovaton. The aim of this research is thus to develop a conceptual model of the ICD process which is highly valuable to frms in developing countries (FDC). Methodologically, this research is based on a broad literature review. Following this, two key fndings were obtained. Firstly, three key constructs of ICD, namely knowledge accumulaton, knowledge applicaton and fund generaton were identfed. The frst two constructs consttute the technical aspect and the third construct represents the fnancial aspect of innovaton capability. Secondly, using these three key constructs, the research proposed a conceptual model that defnes a process of ICD for the FDC. These fndings imply that frms’ ICD effort can be beter explained by integratng the technical and fnancial aspects of innovaton. As far as our knowledge is concerned, this paper is unique regarding providing a detailed review and discussion regarding the ICD process for FDC. In conclusion, the model can place a great emphasis on the understanding of the key constructs and their relatonships to enhance the attudes and practces of frms to develop their innovaton capability.

Keywords: innovaton capability, frms in developing countries (FDC), technical aspect, fnancial aspect, constructs of innovaton capability