Factors Affecting Engagement and Commercialization of Innovation Activities of Firms in Tanzania

In this paper, we analyse the commercialization of innovations in Tanzania using firm level data. Specifically, we assess the relative importance of firm, innovation and environmental level factors in commercialization and how innovation is linked with commercialization. Environmental level and innovation level factors all impact commercialization of innovation in Tanzania while firm level factors not influencing commercialization. Cooperation with domestic firms, an environmental level factor has the greatest impact on commercialization followed by the cost-reducing motive of engaging in product innovation and firm funding of external research and development. The analysis reveals engaging in product innovation with a goal of reducing cost and firm funding of external research and development are the only factors impacting both product innovation and commercialization of innovations in Tanzania implying enhancement of firm efficiency and internal knowledge base is the main link between product innovation and commercialization of innovations. Market factors such as changes in promotion and advertising methods surprisingly do not influence commercialization of innovations