Title: Small Medium Enterprises’
(SMEs) Resources
and the Development of Innovation in Malaysia
Abstract: More recent
research has shifted attention from tangible to intangible resources as
it perceive 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, Ireland,
Camp, & Sexton, 2001). SMEs with their important role in innovation
have a number of resource disadvantages such as limited financial and
technical manpower resources, narrow external technical networks, small
marketing resources, and lack of management skill (Hashim, 2004) since
there has been a dramatic increase in Malaysia SMEs development, this
research reviews the SME resources and its contribution to innovation
development. Particularly, with this backdrop, this paper attempts to
review the development of innovation in Malaysia. For example, in
Malaysia, a large number of SMEs provided parts and services to the
multinational companies (MNCs) which have manufacturing operations in
the country. At the same time, there are also many SMEs that create
indigenous technology. Their contribution towards technology
development pursues innovative products that will create firm
competitive advantage. Furthermore, from the researcher observation,
entrepreneurs in the globalization era mostly involved with incremental
innovation in which the application of numerous variety of knowledge,
skills and backgrounds have been adopted to previous products and
services to create something new, customer focused but still product
and service oriented. Their innovation mostly supported by numerous
kinds of resources which is tangibles and intangibles. 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.
Authors: Lily Julienti
Abu Bakar and Hartini Ahmad
