Knowledge, technology trajectories, and innovation in a developing country context: evidence from a survey of Malaysian firms

This paper investigates the applicability of contemporary firm-level innovation concepts to a developing country context by drawing on the results of a survey of Malaysian manufacturing and service establishments. We build on Keith Pavitt's 'technology trajectories' framework to empirically test the effect of firms' structure, strategy, resources, and environment on the probability of their product, process, and organisational innovations across various sectors. We find that Malaysian firms possess relatively high process and organisational innovation capabilities, but lag in new product development. Further, they more frequently utilise a variety of 'soft factors' like employee training, knowledge management practices, and collaboration with market actors as inputs to innovation rather than formal R&D. We conclude by discussing the implications of our findings about Malaysian firms' technology trajectories to innovation policy in that country.

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