The structure of the Nigerian economy is typical of an underdeveloped country. The primary sector, in particular, the oil and gas sector, dominates the gross domestic product accounting for over 95 per cent of export earnings and about 85 per cent of government revenue between 2011 and 2012. The industrial sector accounts for 6 per cent of economic activity while the manufacturing sector contributed only 4 per cent to GDP in 2011. The economic transformation agenda, otherwise known as Nigeria Vision 20: 2020, sets the direction for the current industrial policy in Nigeria. The industrialization strategy aims at achieving greater global competitiveness in the production of processed and manufactured goods by linking industrial activity with primary sector activity, domestic and foreign trade, and service activity.
An intractable issue for many developing countries is in building local technological capability (LTC). Contemporary capitalist economies have amply demonstrated that building LTC is a necessary condition for any nation aspiring to develop technologically. In industrial and newly industrialising countries, the national system of innovation (NSI) has been shown to be a major factor in technological advancement in the past century. We have identified the important features of the NSI framework, especially as related to the less developed countries. Using Nigeria as an illustration, this paper presents some insights into how a less developed country can articulate strategies aimed at building LTC using the NSI features as guides for relevant policies.
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