Ianna Journal of Interdisciplinary Studies (Jul 2024)
Legal Policy Implications for Promoting Innovation Capability and Business Efficiency: A Case Study of Small and Medium Enterprises in Vietnam
Abstract
Background: Legal policy plays an important role in promoting innovation. It creates a legal framework and favourable environment for research, development, and application of new technologies and contributes to improving the business efficiency of small and medium enterprises. Objective: The study evaluates critical factors affecting the innovation capability and business efficiency of small and medium enterprises in Vietnam. Methodology: The author applied a quantitative method, using a descriptive survey as the instrument for data collection and a structured questionnaire as the sample size. The sample size was 500 managers representing 500 small and medium enterprises (SMEs). The study's model was tested using a structural equation model, and results were presented in tables. Result: Research results show that eight factors affect innovation capability based on a significance level of 1%. The factors are (1) total quality management, (2) organisational learning, (3) government support, (4) collaboration network, (5) ability to absorb knowledge, (6) internal human resources, (7) strategic vision, and (8) technology application. Moreover, innovation capability influences the business efficiency of small and medium enterprises. Conclusion: The research results contribute particular academic value and are a reference for research on innovation capacity. The study adjusted the scale for innovation capacity, knowledge absorption capacity, cooperation network, organisational learning, and comprehensive quality management following actual data conditions farewell in Vietnam. Unique Contribution: This study is beneficial in both theory and practice in measuring innovation capacity and related variables impacting innovation capacity on business efficiency. Key Recommendation: From the above results, the author proposes eight policy recommendations to improve small and medium enterprises' innovation capability and business efficiency in the context of development and integration in Vietnam. To take advantage of this opportunity, it is necessary to synchronously implement the above solutions to remove institutional bottlenecks and promote innovation capability in Vietnamese enterprises.
