Enhancing Competitiveness through Technological Capability development of Metal and En-gineering Enterprises (Case: Small and Medium Enterprises in Addis Ababa, Arada Sub-City Administration)
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Date
2024-06
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Addis Ababa University
Abstract
Technological capability plays an enormous role in firm improvement and getting competitive in the marketplace. The actual technological capacity of Ethiopia's metal industry is incredibly low. Be-cause of this shortcoming, the sector cannot import substitutes as intended, even though it cannot adopt, improve, reengineer, and disseminate them to other similar industries at the desired level for the nation. Therefore, the study's main objective is to enhance the competitiveness of small and me-dium metal and engineering enterprises (SMMEEs) in Arada sub-city by developing technological capabilities. We employ qualitative and quantitative study approach to achieve this. Both primary and secondary data collection methods are used to gather information through observation, focus group discussions, and different literature and reports. We next apply system dynamics to analyze the data obtained so that we can understand the causal elements affecting competitiveness through technological capability. Vensim software is used to carry out the simulation. The simulation period is 10 years, and we also use the descriptive analysis method.
The analysis indicates that the competitiveness of small and medium metal and engineering enter-prises in the Arada sub-city is determined by technology transfer which affected by level of technol-ogy, their network and organizational learning capability, research and development which is influ-enced by their level of education, international market linkage which is affected by the market inno-vation ,demand condition and competitors’, organizational condition which is influenced by their existing knowledge financial capability ,investment and their commitment , innovation which affect-ed by product and technology innovation, obsolescence rate and r and d characteristics , and finan-cial capability which affected by inflation , investment and investment knowledge possibility. This study also revealed a lack of technology transfer practices, poor international market linkage, no use of research and development, and a lack of organizational vision for the development of technology. The competitiveness of the metal and engineering sectors in Arada Sub City is found to be unsatis-factory.
Finally the system dynamic model shows the causal elements affecting competitiveness through technological development. And working on these elements can indeed foster the competitiveness.
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Keywords
Competitiveness, Technological Capability, Small and Medium enterprises (SMEs), Metal and Engineering sector, System Dynamics