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This paper explores the role that IT capability (IT-c) plays in firm innovation performance through the channel of organisational learning (OL) in Kenya. It frames OL in two dimensions: explorative and exploitative OL. The former entails seeking new knowledge, which mainly exists outside the firm’s competence. The latter is an activity or process that builds on existing competence and knowledge in the firm. Using mediation analysis of 481 firms drawn from the World Bank Enterprise Survey (2013) and Innovation Follow-up Survey 2014, it demonstrates that IT-c has a significant effect on innovation performance of firms (capability to simultaneously improve products, processes, organising and market development). It finds that the mediative role of OL in the relationship between IT-c and innovation performance is realised mainly through explorative learning, whilst enabling the firm exploit existing (in-house) knowledge base. The paper puts forward some managerial, policy and further research suggestions.

IT Capability, Organisational Learning and Innovation Performance of Firms in Kenya