Abstract

This study seeks to explore the specific trends of technological innovation in Malaysia’s wooden furniture industry from two dimensions, namely knowledge and the process of learning as well as actors and linkages. In order to achieve this goal, empirical evidence for the study was derived from a case study of the Muar furniture cluster, which is known as the furniture capital of Malaysia. The main findings from the study indicate that there is no clear distinction between the large manufacturers and SMEs (small and medium enterprises) in terms of technological capabilities. The success of the cluster is largely due to the collective effort of all the innovation actors in the industry, particularly those that belong to the immediate business environment. In general, the industry is business driven and emphasizes on the industrial dynamics. There is a strong social capital and mutual understanding amongst the practitioners to see each other as partners in their quest for competitive development.

Key words: SMEs, low-tech, innovation systems, cluster, Malaysia.