THE DIGITAL CAPABILITIES–SERVICE INNOVATION NEXUS: A CASE STUDY OF OPAY, LAGOS STATE, NIGERIA

Abstract

This study examined the nexus between digital capabilities and service innovation at Opay, Lagos State, Nigeria. The specific objectives were to determine the effect of human capabilities on service delivery, the influence of technical capabilities on employee expertise, and the relationship between innovation capabilities and the introduction of new services.. A descriptive research design was adopted. The target population comprised 363 employees of Opay in Lagos State, with a sample size of 190 determined using the Taro Yamane formula. A random sampling technique was employed. A structured questionnaire was used to collect primary data. Simple linear regression was used to test the three hypotheses at p < 0.05. The findings revealed that human capabilities have a significant positive effect on service delivery (β = 0.487, p < 0.005, R² = 0.274). Technical capabilities exert a significant positive influence on employee expertise (β = 0.516, p < 0.005, R² = 0.299). Innovation capabilities have a significant positive relationship with the introduction of new services (β = 0.525, p < 0.005, R² = 0.315). All three hypotheses were supported. The study concluded that digital capabilities are not monolithic; human, technical, and innovation capabilities each predict distinct service innovation outcomes. Recommendations include implementing quarterly digital skills training, upgrading technical infrastructure, establishing an Innovation Lab.