Catalysts of Change: Evaluating the Impact of Government-Funded Digital Innovation Hubs on SME Competitiveness in Nigeria

Abstract

This study examines the transformative role of government-funded Digital Innovation Hubs (DIHs) in enhancing the competitiveness of Small and Medium Enterprises (SMEs) in Nigeria. As Nigeria advances its digital economy agenda, DIHs have been introduced as strategic mechanisms to stimulate innovation, strengthen entrepreneurial capacity, and expand digital participation among SMEs. Despite their growing relevance, limited empirical attention has been devoted to understanding how DIHs impact SME performance in developing contexts. Drawing on secondary data including government policy reports, SME surveys, and development agency publications, this paper explores the impact of DIHs on SME digital adoption, productivity, and innovation capacity across diverse regions in Nigeria. Guided by Innovation Systems Theory, the Inclusive Innovation Framework, and the Resource-Based View (RBV), the study evaluates DIH outcomes through systemic coordination, equity, and capability-building lenses. Findings indicate that DIHs facilitate knowledge diffusion, skill enhancement, and digital adoption, contributing to improved market access and productivity among beneficiary SMEs. However, benefits remain uneven, with DIHs concentrated in urban and southern regions, limiting equitable participation for rural, informal-sector, and northern-based enterprises. The study recommends expanding DIH coverage, strengthening institutional coordination, and implementing culturally and regionally responsive digital inclusion strategies. This research contributes to emerging scholarship on innovation infrastructure in developing economies and offers practical implications for policymakers, development practitioners, and SME stakeholders seeking to build inclusive and competitive digital ecosystems.