Innovative value chain: supply chain technology (SCT) adoption of SMEs in Sabah

Information technology drives innovation and innovation is the path to business success. Innovation in business has the same impact that steam had on the industrial revolution. Without a backbone of information technology, a business is not going to go far. Unfortunately, in Malaysia although there are many steps taken by the government to assist technological development of SMEs, the mood by the supposed receivers paints a sombre picture. Digital adoption, especially among SMEs, is barely touching 20 per cent, and most manufacturing companies apply less than 50 per cent of automation. Malaysia has always scored among the highest in the region in terms of digital readiness, according to global surveys. However, the drive by industry players themselves falls short. Critical challenges include the lack of awareness, especially among SMEs, in terms of the impact of and benefits of keeping up with new technologies. It shows the level of technology usage still very low within business operation especially in supply chain that discourage the firm to digitalise their business. Thus, this study identified factors affecting supply chain technology (SCT) adoption among SMEs in Sabah particularly. This paper use Diffusion of Innovation (DoI) theory with introduce three variables were proposed to help predict SCT adoption among SMEs in Sabah namely: idea generation, idea conversion, and diffusion of innovation. This study employed quantitative method approach by using questionnaire as a tool to answer the study aims. Data was collected from 106 SMEs in Sabah regardless in manufacturing, services and agriculture industry was analysed using Structural Equation Modelling (SEM) via Partial Least Squares (PLS). The results and implications included in our study contribute to an expanded understanding of the innovation factors that influencing SCT adoption among SMEs