The increase in technology related to this increasingly rapid digitization (Wolfgang Becker and Oliver Schmid, 2020) causes many companies to digitize to compete in business (Benjamin Barann et al, 2019). With the digitization method, a company can increase customer satisfaction with the services and products they provide. Digitalization is a process of making or improving business processes by using technology and digital data (Rahiza, 2021) this also aims to create a better business. The digitization process is very important to be done in Small and Medium-sized Practices (SMPs) and Small and Medium-sized Enterprises (SMEs), but financial constraints cause the digitization process in SMEs and SMPs to be slow. SMPs and SMEs are industries where most of their efforts and jobs are in the category of private industry that has the best economy (Waseem Ahmed Abbasi et al, 2017). This enterprise consists of no more than 250 employees and has a turnover of no more than 50 million.

According to Purnima Rao et al (2021) in this increasingly developing and advanced economy, SMPs and SMEs are one of the most important sources of income for many people. This causes SMPs and SMEs to become one of the main focuses of the Government. According to Wan Salman (2021), there will be a decline in SMPs and SMEs due to the spread of the Covid-19 epidemic which has caused a very severe economic crisis, this has a great impact on SMPs and SMEs in Malaysia.

The fourth industrial revolution is known as Industry 4.0 which is currently a digital transformation that brings changes to business (Dragana and Sasa, 2023). SMPs and SMEs are among those that are in desperate need of digitalisation. This aims to assist SMPs and SMEs in incorporating digitization services into their daily company operations. According to Haslinda and Muruga (2019), by the year 2020, SMEs in Malaysia have the potential to contribute as much as 41% to the country’s GDP compared to 2012 which only contributed as much as 32%. According to a study conducted by SME Corp. Malaysia (2020), as many as 73% of SMEs in Malaysia experienced losses in 2020 due to the spread of the Covid-19 virus. Since Covid-19, many SMEs have had difficulty applying for financing from banks due to their severely affected credit reports (Afiq Mohd Shah, 2021). Covid-19 pandemic has expedited the need for technology adoption as an initiative for SMEs and SMPs to survive and continue its business operations.

The general aim of this project is to explore the previous and existing funding options for technology adoption and digitalization for SMPs and SMEs. Funding options are categorized into three (3) main categories such as internal funding, external funding and government funding. Each funding option is examined as mediating variables between financial resources, technical resources and intangible resources towards the technology adoption. Subsequently, this project will propose the best funding option for SMEs and SMPs, and for the government to be focused on in their future program and initiative. The objectives

  • Research objective 1: To explore the existing funding methods for technology adoption by Small and Medium-sized Practices (SMPs) and Small and Medium-sized Enterprises (SMEs).
  • Research objective 2: To examine the internal funding mediate the relationship between (financial resource, technical resource and intangible resource) towards technology adoption of SMPs and SMPs.
  • Research objective 3: To examine the external funding mediate the relationship between (financial resource, technical resource and intangible resource) towards technology adoption of SMPs and SMPs.
  • Research objective 4: To examine the government funding mediate the relationship between (financial resource, technical resource and intangible resource) towards technology adoption of SMPs and SMPs.

Research Team:
> Dr. Siti Afiqah Binti Zainuddin
> Prof. Madya Dr. Noorul Azwin Binti Md Nasir
> Dr. Tahirah Binti Abdullah
> Dr. Amira Binti Jamil

University: Universiti Malaysia Kelantan (UMK)