Adoption of Sustainable Technology in the Malaysian SMEs Sector: Does the Role of Government Matter?

Abstract

This paper looks at the role of government as a novel dimension in the adoption of sustainable technology by small and medium enterprises (SME) in Malaysia. This determinant stems from the fact that, in many transitional economies, private sector organizations encounter resource constraints as a barrier to innovation adoption. This is especially the case with sustainable technology incorporated into business operations. Therefore, third party intervention into the adoption process becomes inevitable and it is considered to make the adoption process more effective. A government has both the power and resources to play a pivotal role in the adoption of sustainable technology. Given this state of affairs, this study examines the government’s role as a critical factor in achieving smooth and efficient adoption. The theory of reasoned action (TRA) serves as the theoretical underpinning of this study. The data were collected from a sample of 263 SMEs in Malaysia. Partial least squares structural equation modeling (PLS-SEM) was used to analyze the data. It was found that government policies and subsidies are critical in encouraging the adoption of sustainable technology in Malaysia. This paper discusses the implications for government-driven adoption of sustainable technology, identifies the limitations of the analysis, and avenues of future research in this very relevant and expanding field.

Role of Technological Innovation in Achieving Social and Environmental Sustainability: Mediating Roles of Organizational Innovation and Digital Entrepreneurship

“…Externally, persuasion based on credibility, sympathy, and logic will refine and impose arguments on people's attitudes, affecting their moral duty ( 42 ). In addition to the antecedents, external influences such as eco-centrism and altruism are thought to impact attitudes ( 43 ). Those working on sustainability studies have a diverse range of views on technology.…”

Governmental Intervention and Its Impact on Growth, Economic Development, and Technology in OECD Countries

“…Moreover, it has been observed that tariffs are the most efficient and profitable mechanism for encouraging sustainable technologies, rather than other instruments, like quotas, direct incentives, or voluntary goals [66]. However, government subsidies or incentives do not have to be only financial.…”

“…Innovative, non-monetary incentives, like providing public recognition or awards, can be as efficient as financial subsidies over the long-term [67]. It is important to mention that government support might have many purposes, including educating organizations about the use of sustainable technology, changing companies' behavior towards sustainability, and establishing a more environmentally friendly relationship [66].…”

“…Small and medium-sized companies can make awareness campaigns concerning sustainable technology that is pleasant, easy to use, and triggers employee interest. Supporting sustainable technology in a form that enhances responsibility concerning the environment could produce a higher acceptance of sustainable technology [66].…”

“…We take the findings from the literature review [65,66] to define our second research hypothesis: government intervention types impact differently in terms of technological achievements. For example, health expenditures are not the same as expenditures on education; moreover, they may have opposite effects.…”