Fostering an Innovative Climate for the Development of New Products among the Malaysian Small Medium Enterprises

Abstract

Technological innovation is concerned with the use of knowledge for the creation and implementation of new technologies. These can be translated in the form of introducing radically new product to the market, improvement of product features or improvement of the manufacturing processes. Further, it is generally recognized that the capability of the company to continually innovate or improve its product and processes is the key to its growth and survival. Hence, an innovative climate for new product development (NPD) should be fostered within the company if it does not exist. Technology has been identified to be the essential element towards achieving Malaysia's vision to be an industrialized nation by the year 2020. In Malaysia, small and medium enterprises (SMEs) in the manufacturing sector form a vital component of the Malaysian economy. The importance of NPD to the country's economy is also being instituted in the Industrial Master Plan published by the government in 1985 and 1996. However, the NPD activities amongst the SMEs have not been adequately explored. This paper is based on a sample obtained from a preliminary study of NPD among SMEs. The study identifies the problem faced by SMEs in executing NPD. Factors that contribute to NPD success were also determined. The study also determines some methods used by SMEs in conducting their new product development activities. Based on the findings from the study and using Mckinsey's 7S framework as a guideline, a few suggestions for fostering the new product development capacity in Malaysian manufacturing companies will be forwarded. It is hoped that this study will provide a starting ground for more research work on NPD within the SMEs. Consequently, it will hopefully, improve the development of indigenous technology and cultivate entrepreneurship within the SMEs.