Building Technological Capabilities of Small and Medium Enterprise through Industrial Linkage with Multinational Company: A Case Study of Malaysian Electrical and Electronic Industry

Abstract

This paper is a concept paper and the discussion of the paper focuses on a model known as Industrial Linkage Model. The model comprises of four main elements namely the firm specific factor the MNC linkage the learning process and the facilitating effect from the government as well as public and private sectors. These four elements are important to facilitate the process of a firm in acquiring the technological capability however, with the condition that SMEs are willing to change their unproductive status quo and shift their paradigm on technology. The condition also applicable to MNCs where the commitment of the organisation to let the SMEs to participate in high value added process such as research and development is significant for the acquisition process of technological capability to function well. To strengthen the linkages. Government and the support system play their roles in providing strong and continuous support to the capability development of SMFs. This linkage approach has a potential to conciliate the acquisition of technological capability of technologically inferior firm.