An analysis of innovation support programme is an emerging economy: a case study of Malaysia

Emerging economies have introduced a number of policies to propel economic development.
Policies are acknowledged as powerful tools to promote industrialisation and economic
diversification. The feature of these policies are not only confined to established emerging economies
but also mid-ranking emerging economies like Malaysia. As the country moves towards a knowledgebased
economy, this study provides insight into how a policy comprising a financial initiative
introduced by Malaysian Government has been used to enhance capabilities of indigenous small and
medium enterprises particularly for innovation. This study is exploratory since it seeks to find out
how firms developed and enhanced their innovation capabilities in the presence of government policy.
This study found that this policy initiative tends to affect the latter end of the innovation process (i.e.
in particular in the exploitation phase) rather to the innovation process in general. This study
contributes to closing some of the gaps in research into public support for innovation and
development of knowledge-based economy within emerging economies. In particular it identifies the
target group and impact of such policy initiative, particularly in the context of policies designed to
upgrade firm‟s capacity to carry out new product development process for high-technology products.