Determinants of eco-innovation capabilities adapted by Malaysian SMEs during the COVID-19 pandemic

Abstract

Today’s businesses must deal with difficult economic circumstances, including fallout from the COVID-19 pandemic. This has had a direct influence on Malaysia’s manufacturing industries because all economic activity was interrupted for a considerable period. Implementing eco-innovation capabilities is viewed as one of the key approaches that firms can decide to adapt in order to sustain their local and global competition during this unexpected pandemic. In this study, we examine the potential significant eco-innovation capabilities that manufacturing companies implemented during the pandemic. This study applies the qualitative method by interviewing four top-level managers of small and medium-sized enterprises (SMEs) in Malaysia. The essential components of eco-innovation capabilities represented in this study are product, process, organisation, marketing, and technology. The results demonstrate that the majority of SMEs in Malaysia were able to employ core eco-innovation capabilities for their operations during the pandemic. However, for various reasons, a minority of SMEs were unable to implement any of the capabilities in their daily operations. This study has important implications for policies, government institutions, and manufacturer business managers in terms of developing an effective innovation platform upon which manufacturing businesses can rely to increase their business potential and performance in the coming years and beyond.