The internationalisation of innovative capabilities : the Malaysian electronics industry.
This thesis is focused on the internationalisation of innovative capability, not R&D and
patenting capabilities or on production capabilities alone.
The broad research questions are: 1) to examine whether internationalisation of
innovative activity has spread to firms in the Malaysian electronics industry.
Conventional literature states that it has not occurred, as countries like Malaysia are not
technologically advanced and do not have the conditions in terms of skills and internal
capabilities for this to occur. 2) If there is evidence to the contrary, how long did this
take? 3) How has it occurred, what learning mechanisms have assisted this process? 4)
If there is such evidence, what factors contributed to it?
In this thesis, the internationalisation of innovative capabilities is measured by the
technological capability levels and speeds at which they have been built by firms. To
operationalise key concepts, the thesis has developed 1) a comprehensive classification to
measure capabilities of firms in the electronics industry, 2) learning rates using the
historical timeline of firms, 3) a new typology for understanding knowledge flows and
learning links between firms.
The analysis of 53 firms (26 TNC subsidiaries and 27 local firms) show that the
internationalisation of innovative capabilities has occurred to some extent. 85% of firms
conducted at least intermediate innovative activities and took an average of 11 years to do
so. Only two conducted research-basedin novations and took more than 20 years to do
so. Similar proportion of firms conducted advanced and research-based product and
process innovations. Contributory factors include 1) time and the agglomeration of
learning which reduced learning rates of later entrants, and 2) the cumulating interaction
of diffusion of knowledge and people flows from TNCs primarily through subsidiaryparent
and supplier-customer links, and independent learning.