Based on the annual sales turnover 27

LIST OF TABLES TABLE TITLE PAGE 2.1 Measurements of SMEs, Percentage of Workers and Value Added per SMEs in Selected ASEAN Countries and Other Region 25

2.2 Based on the annual sales turnover 27

2.3 Based on Number of Employees 27 2.4 Based On Distribution of SMEs by size 28 2.5 Measurements of SMEs, Percentage of Workers and Value Added per SMEs in Selected ASEAN Countries and Other Region 30 2.6 Distribution manufacturing Sector in Malaysia 32 2.7 Labor and Capital Productivity of SMEs in 2006 34 2.8 Contribution of SMEs in the Manufacturing Sector 36 2.9 Contribution to Output, Growth in Output , Contribution to Value-Added Products and Growth in Value- Added Product by SMEs in Manufacturing Sector 36 2.10 Employment Distribution of SMEs in the Manufacturing Sector 38 2.11 Fixed Assets per Worker by Employment Size Group in Malaysia 40 2.12 Critical dimension of Performance 107 2.13 Dimension of Innovation construct 115 3.1 Reliability of Variables 133 3.2 Distribution of SMEs in State Country 136 3.3 Breakdown of sample according to industry sector 141 3.4 Construct of the Questionnaire 144 3.5 Profile of Respondent 145 3.6 Profile of Business 146 4.1 Respondents’ Background 152 xiii 4.2 Company Profile 153 4.3 Business Location 155 4.4 Type of Industry 156 4.5 Annual Sale Turn Over Business 157 4.6 Descriptive Analysis of Company Profile – Mean and Standard Deviation 158 4.7 Descriptive Analysis of Challenges of Innovation Activities 161 4.8 Descriptive Statistic of Challenges Faced in Implementation of Innovation 162 4.9 Nature of Organization Success 162 4.10 Government Agencies for SMEs well-being 163 4.11 The government State and Federal Currently Gives Full Support to SMEs in Getting Suitable Factory Site and Affordable Office Spaces for Their Business 164 4.12 The financial institution currently are very realistic, especially in charging reasonable interest rates, as well as imposing easy loan terms on SMEs 164 4.13 SME will become the core organization to enhance the development of Socio-Economic activity of the country 165 4.14 Relationship between Gender of Respondent and the Importance of Innovation to Them 166 4.15 Relationship between Organisation Year Established and the Important of Innovation to the Organisation 166 4.16 The innovation importance and Business Performance 167

4.17 The innovation intention and Business Performance 169