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.