Effective Knowledge Creation for Promoting Innovative Capacity in SME Malaysia Through University-SME-Collaboration (UEC): The Interaction Model

Collaboration between university and Small Medium Enterprises (SMEs) is a concept for achieving innovation through knowledge creation but challenges are huge due to resource constraints and limited capabilities. In Malaysia, despite of SMEs being the major contributor to the national economic landscape, innovative capacity is still below expectation indicating the poor relationship between the collaboration actors. One method to enhance innovation capabilities through interaction is to develop a new collaborative model with embedded attitudinal element that reflects the favoured mode of interaction for SME Malaysia. This work intends to study the perception of the researchers and industry practitioners towards effective collaboration using interaction process parameters that promote co-creation of knowledge in enterprises based on trust and honesty. A survey is instrumentally developed to study the respondents’ perception on the interaction attributes. The data obtained are analyzed based on Taguchi method and linear regression. The results show that impactful collaborative engagement is achieved if interaction between actors is informal. The findings support the argument on SME preferring an informal mode of interaction to foster successful SME-University collaborations through enhanced interaction and help to complement the current national innovation policy which is yet to be updated since 2012.