Impacts of innovation towards small medium entreprise (SME) performance: A case study of manufacturing sector in Melaka

Mohamad Ibrahim, Haiqal Hadi (2018) Impacts of innovation towards small medium entreprise (SME) performance: A case study of manufacturing sector in Melaka. Project Report. Universiti Teknikal Malaysia Melaka, Melaka, Malaysia. (Submitted)

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Abstract

In this century, Small Medium Enterprise (SME) has make a significant impact in the economic growth of a country as SMEs contributed to the growth of Growth Domestic Product (GDP) in 2012. Recently, most of the research are focusing on large organization when it comes to innovation management. This article, however, identifies innovation activities and their performance implications towards manufacturing SMEs focusing in Melaka. The survey data is obtained from of 100 respondents from manufacturing SMEs in Melaka. It is found that innovation strategy, innovation culture and technological capabilities have positive impacts towards SMEs’ performance while formal structure and customer and supplier relationship do not have a significant impact. This study therefore concludes that SMEs’ performance is likely to have benefits both in growth and accounting returns from the practice of innovation strategy, innovation culture and technological capabilities in an organization. This research also recognize that formal structure does not brings impact towards the SMEs’ performance as it is restricting creativity (Cosh, et al, 2012) while customer and supplier relationship also do not bring benefit towards SMEs’ performance as there is a lack of ability for SME to apply Supply Chain Management (SCM) effectively (Bouncken, et al,.2016).

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