Technological Change from Foreign Firms: Firm-Level Case Studies in the Kenyan Context

Foreign direct investment and technological spillovers are among the most widely studied to understand theirrole in learning, capability building and innovation management. The purpose of this paper is to examine the roleof FDI in industrial development in the sub Saharan region but using an alternative framework taking Kenya as acase study country. Specifically, the paper investigates whether presence of FDI in manufacturing industrystimulates spillover occurrence. This is done following a unique analytical framework developed taking intoconsideration human resource development, linkages, competition and demonstration effects. On the basis of thisframework, foreign presence stimulated spillover occurrence in Kenya’s industry. There was tremendousevidence of learning, capability building and innovation due to spillover occurrence. The main limitation of thispaper is that results obtained cannot be generalized since the five foreign firms studied cannot be consideredcomprehensive representatives of the entire manufacturing industry. The results need to change our thinking withregard to policy pertaining to the role FDI plays in a host country’s industrial development. This paper presentsthe only known work based in Africa focusing on FDI, spillovers, learning, capability building and innovation.The case studies, though ambitious, present findings which need to change our thinking about the past resultsand methodologies of the past studies on FDI and spillovers.