Small Medium Enterprises’ Resources and the Development of Innovation in Malaysia

Lily Abu Bakar,Hartini Ahmad

doi:10.5171/2010.128184

Abstract

More recent research has shifted attention from tangible to intangible resources as it perceived to be more important from a strategic point of view, since they bring together more frequently the requirements necessary for producing sustainable advantage: to be valuable, rare and difficult to imitate and replace by competitors (Barney 1991; Hitt et al. 2001).In view of the fact that there has been a dramatic increase in Malaysia SMEs development, this research reviews the SME resources and its contribution to innovation development. In the context of Malaysia manufacturing companies, reputational resources have been found given the highest impact on the product innovation performance compared to other factors.Survey was distributed randomly to the business owners and managers who work in various sizes of manufacturing firms.The response rate was 48% resulted from the personally administered questionnaire are considered highly favorable.

Highlights

The governments of most developed economies including Malaysia see Small Medium Enterprise (SME) as the well-spring of economic growth and job and wealth creation
The above findings are in line with the Resource Based View (RBV) point of view that focuses on intangible resources as the main drivers for firm’s performance which comprise the element of product innovation as one the performance indicators
The findings show that in order to bringing up Product Innovation Performance (PIP), SMEs should focus on the utilization of tangible resources and intangible resources including low cost production efficiency; quality of manufacturer; high labor productivity; low cost product design and engineering; and flexibility in manufacturing

Summary

Introduction

The governments of most developed economies including Malaysia see SMEs as the well-spring of economic growth and job and wealth creation. In term of SME’s performance indicators, innovation surveys carried out by many countries around the world including Malaysia, follow general guidelines set out by OECD publication or Oslo Manual (OECD 2005) Such guidelines or indicators mostly focused on financial indicators such as gross domestic expenditure on R&D, business enterprise expenditures, technology balance of payments, profitability, market share etc., but lack of information on non-financial indicators that indicate performance in term of product innovation, SME’s competitive advantage, business operation such as availability of information technology and communication, product development time, technological breakthrough, product quality etc. The present study will identify whether there are similar effects hold for Malaysia SMEs, but in the context of product innovation performance (PIP) Exploring such relationships will enrich understanding on the importance of SME resources in explaining PIP

Research Methodology

Results and Discussions

Regression Residual Total

Limitations and Future

Conclusion