Internationalisation of technological innovative capabilities: levels, types and speed (learning rates) in the electronics industry in Malaysia

Abstract

This paper focuses on the internationalisation of innovative capability; not R&D and patenting capabilities or on production capabilities alone. It examines whether internationalisation of innovative activity has spread to firms in the electronics industry in Malaysia where Malaysia is among the world's largest exporters of semiconductor devices and 96.3% are foreign-owned. Conventional literature states that it has not occurred, as production outpost in countries like Malaysia are not technologically advanced and do not have the conditions in terms of skills and internal capabilities for this to occur. If there is evidence to the contrary, how long did this take? To operationalise key concepts, the paper has developed a comprehensive classification to measure technological capabilities of firms in the electronics industry and learning rates (speed) using the historical timeline of firms. The analysis of TNC subsidiaries and local firms shows that internationalisation of innovative capabilities has occurred to some extent.