Technology, human resource competencies and productivity in nascent petroleum industries: an empirical study

Abstract

PurposeTechnology competencies (TC) and human resources (HR) play a vital role in enhancing productivity in any industry. Yet the significance and interplay of these two factors in developing economies such as Uganda that are kick-starting oil exploration is not clear. Using structural equation modeling (SEM), the underlying relationship between technology, human resources and productivity in the petroleum industry is established.Design/methodology/approachTo examine the interrelationship among the independent factors (TC and HR) and the dependent factor (productivity), a questionnaire was used to collect data from respondents in Uganda. All the targeted respondents come from the oil exploration side of the industry in Uganda. SEM, a multivariate statistical analysis technique, was applied to analyze the underlying relationships among variables.FindingsThe findings suggest that TC and HR positively and significantly influence the petroleum industry productivity (PI). Both TC and HR explain a 32% variation of the observed improvement in productivity. The relationship between the independent variables (TC and HR) and dependent variable (PI) is summarized using the equation ΔPI = 0.36 TC + 0.25 HR, with TC having a more significant effect on PI than HR.Practical implications The study thus proposes to governments and oil companies in resource constrained environments that adoption of advanced technologies in oil exploration plays a relatively much bigger role and has an overarching impact on productivity especially in countries with small scale production, or in hostile environments or with unconventional hydrocarbon reservoirs.Originality/valueFor developing economies with fewer resources that often face economic tradeoffs, the study examines the significance of TC and HR development in expanding the oil and gas sectors. This work, to the best of the authors’ knowledge, is among the few studies that have examined the impact and the interplay of TC and HR on the productivity of emerging oil industries in developing economies such as Uganda.