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Knowledge
transfer
291
Received 9 December 2011
Revised 14 April 2013
Accepted 20 May 2013
Abstract
Purpose This paper aims to investigate to what extent knowledge inflows have taken place among
professional Malaysian workforces and what the significant employee-related factors of knowledge
transfer are. The development of technology parks at Technology Park Malaysia (TPM), Kulim High
Tech Park (KHTP) and Multimedia Super Corridor (MSC) is the focus of the discussion.
Design/methodology/approach Data were collected through a self-administered survey to 300
local professionals; and 51 percent responded. A multiple regression was used to identify the
significant determinants of transfer of knowledge.
Findings Knowledge transfer from foreign expatriate, parent and peer subsidiary companies to
local professionals is at a moderate level. The overall multiple regression shows that workplace
learning, personal time management, symptom of replication, adaptation and innovation, and work
experience significantly contribute to the transferring of expertise to local professional employees.
Research limitations/implications The success of companies in todays competitive economy
lies more in their knowledge and intellectual capital rather than other resources. Therefore,
transferring new knowledge from foreign multinational corporations (MNCs) to local workforces is a
basic step for future sustainable competitive advantage. Empirical evidence from previous research
shows that information and communication technology can facilitate the transfer of knowledge. This
is not covered in this study.
Practical implications Training mechanisms must be designed in such a way to promote in-plant
training or employee attachment at the parent company or foreign peer subsidiaries.
Originality/value The paper shows that the success of knowledge transfer depends on the
absorptive capacity, the organizational learning climate and the willingness of foreign expatriates in
multinational corporations to transfer knowledge. This is an empirical indication of knowledge
inflows within Malaysian technology parks, which is a relatively new topic to be explored.
Keywords Knowledge management, Workplace learning, Employee behaviour, Learning organizations,
Multinational companies
Paper type Research paper
Introduction
Strong economic growth and continuous expansion of real per capita income are
Malaysias intention. In 1956, Solow introduced the production function, and most
This research was supported financially by the Ministry of Science, Technology and Innovation
Malaysia (MOSTI). The authors are grateful to research executives at Technology Park Malaysia
(TPM), Multimedia Super Corridor (MSC) and Kulim High-Tech Park Corporation (KHTPC) for
their valuable contributions.
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manufacturing process engineering (Ninth Malaysia Plan, 2006; Tenth Malaysia Plan,
2010; National Economy Advisory Council, 2009). In addition, the Eighth Malaysia Plan
(2001; RMK-8) of 2001-2005, infrastructure and environment designed to stimulate the
development of information and communication technology (ICT) in advancement of the
National IT agenda (NITA) were established. Incentives offered in the security bill in the
Eighth Malaysia Plan, 2001-2005 were also established. These incentives included
freedom to hold equity, unlimited recruitment of foreign skilled workers, and no limit on
the use of foreign capital. An income tax exemption for up to ten years or 100 percent
deduction of an investment tax allowance was offered, for a period of five years (Eighth
Malaysia Plan, 2001).
In 1988, Technology Park Malaysia (TPM) was established as an agency under the
Ministry of Science, Technology and Environment. It is now wholly owned by the
Ministry of Finance. Currently, 135 companies are located at TPM. The overall
building occupation rate is 95 percent. The tenants consist of 16.3 percent MNCs and
83.7 percent local companies. Sevent-seven percent of these company focus on
information and technology. Several companies focus on telecommunications and
electronics (5 percent), biotechnology (5 percent), engineering (5 percent), and
environmental technology and commercial (6 percent) (Technology Park Malaysia,
2008). At the same time, total investment in 2004 in Kulim Hi-Tech Park (KHTP)
reached RM2.3bn. The existence of KHTP has attracted local and foreign companies to
invest directly in situ. The numbers of foreign companies include some from the USA
(five), Japan (eight), Germany (two), and one each from Canada and the UK (Kulim
Hi-Tech Park, 2008). The number of companies involved in KHTP stands at 178. of
these, 90.4 percent are local companies, while 9.6 percent are foreign companies.
Meanwhile, the Multimedia Super Corridor (MSC) was established in 1996 as a global
test house of innovation activities, as well as incentives to attract the worlds leading
companies as a hub of ICT and to develop local SMEs (Eighth Malaysia Plan, 2001).
MSC has attracted a total of 825 companies, with 72.9 percent being local and 27.1
percent foreign MNCs (Multimedia Development Corporation, 2008). Thus more
employment opportunity was created for local workers, mainly professional in nature,
with this employment serving as a catalyst for economic growth. This study was
guided by two leading research questions:
(1) To what extent has the local professional workforce at foreign MNCs acquired
knowledge inflows:
(2) Is knowledge inflow in foreign MNCs affected by local absorptive capabilities?
An alternative hypothesis of this study is that local absorptive capabilities have a
significant impact on knowledge inflow. This paper explores the determinants of
knowledge transfer and the role of the absorptive capability of the bumiputera (local
native) professional workforce at science and technology parks in Malaysia.
Specifically, the focus of this study is:
.
to examine the inflows of knowledge from MNCs to the local professional
workforce; and
.
to analyze the significant contribution of the absorptive capability of the local
professional workforce on knowledge inflow.
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The results of regression analysis and the variance inflation factor (VIF) scores
(varying from 1.09 to 3.169) estimated with the various models did not reveal any
serious multicollinearity. The VIF scores are well below 10, the critical value for a
serious problem of multicollinearity (Neter et al., 1983; Hair et al., 1998). The overall
model is also fit (F 17:139, p , 0:001). The overall selected variables explain 57
percent (R 2 0:57) of the variance in knowledge inflows.
296
Science and technology parks in Malaysia
This study highlights three science and technology parks in Malaysia, i.e. TPM, KHTP
and MSC. TPM aims to be a comprehensive center for technology innovation and the
latest in research and product development. KHTP aims to be the city of the future
science with a goal of integrating merger technology industries, especially in
advanced electronics, mechanical engineering, telecommunications, semiconductors,
optoelectronics, biotechnology, advanced materials, research and development, and the
production of new technology. The main objective of MSC is to be the strategic location
developer for innovative uses of ICT to enhance national economic growth and
competitiveness, as shown in Table I.
TPM is located on a site of more than 600 acres at Bukit Jalil, close to the capital city,
Kuala Lumpur. TPM sits in the heart of the Multimedia Super Corridor (MSC) and close
to the new Federal Government Administrative Center at Putrajaya, the intelligent city
Cyberjaya, and Kuala Lumpur International Airport (KLIA). TPM has a good
transportation network. The park is linked to the North-South highway, Port Klang,
Science and technology park
Objectives
Kulim High Technology Park (KHTP) Attracting and incorporating high-technology industry
Establishing science cities in the future
Meeting high-technology manufacturing activities, training,
and R&D to meet modern, healthy lifestyles
Multimedia Super Corridor (MSC)
Table I.
Objective of science and
technology parks
Sources: Multimedia Development Corporation (2008); Technology Park Malaysia (2008); Kulim HiTech Park (2008)
West Port, Kuala Lumpur Airport Cargo Terminal, and public transport facilities.
TPMs infrastructure is a creative blend of nature and structure with tropical
surroundings, enabling its tenants to work in a prestigious park setting environment
(Technology Park Malaysia, 2008). Currently, TPM features 12 distinct buildings
equipped with smart facilities, which include the use of solar energy to power its entire
network systems. Other support and recreation facilities include a gymnasium,
convenience stores, food outlets, banks, a clinic, kindergarten, and an engineering
college (Technology Park Malaysia, 2008). Special incentives and facilities are
provided to attract more investors, mainly from foreign multinational companies
(MNCs), as shown in Table II.
KHTP was founded in 1992 and opened officially in 1996. It is the first high-tech
park in Malaysia (Kulim Hi-Tech Park, 2008). It is located in Kulim, in the state of
Science and technology park
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Kulim High Technology Park (KHTP) Provides modern basic physical infrastructure
Low land prices (RM18.00 per ft2), water tariffs (RM1.00 per
cubic meter) and proprietary-free lease for 60 years
Provides an effective one-stop center of local authorities
Availability of highly skilled labor, especially from USM, the
Malaysian Spanish Institute, the Japan Malaysia Institute, and
the Polytechnic Institute
Multimedia Super Corridor (MSC)
Sources: Multimedia Development Corporation (2008); Technology Park Malaysia (2008); Kulim
Hi-Tech Park (2008)
Table II.
Investment incentive and
advantages
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Kedah, located on the west coast of Peninsular Malaysia and covers about 1,700
hectares (approximately 4,000 acres). KHTP is also strategically located 26 km from
North Container Butterworth Transport Terminal (NBCT) and about 36 km from
International Airport Bayan Lepas, Penang. It is also linked to the North-South and
East-West highways (Kulim Hi-Tech Park, 2008). The area is governed by the Kulim
Technology Parks Corporation, which is a subsidiary of the Kedah State Development
Corporation. The area of KHTP is also equipped with electricity, telecommunications,
water, natural gas, waste recovery, and a fiber-optic telecommunications system with
24 main lines, which can be upgraded up to 60,000 lines (Kulim Hi-Tech Park, 2008).
MSC is host to international foreign companies and local companies that focus on
multimedia and communications products, solutions, services, and research and
development. The Multimedia Super Corridor is an area about 15 50 km, across up to
the Petronas Twin Towers Kuala Lumpur International Airport (Multimedia
Development Corporation, 2008). MSC covers an area of 750 km2. It is bounded by
the North-South Highway in the East and the Coastal Highway in the West. This area
includes Cyberjaya (the technology center) and Putrajaya (the new federal government
administrative center). Overall, MSC will be equipped with a digital fiber-optic
network, 2.5-10 gigabit link that will directly and interactively connect with the
ASEAN countries, Japan, the USA, Europe, and other developing countries.
Results and discussion
Profile of employees and companies
This section presents the descriptive statistics and covers the background of the
respondents and companies of this study. Local professionals are male-dominated in
TPM (53.4 percent), MSC (52.6 percent), and KHTP (67.4 percent). Overall, 34.0 percent
of professional workers are aged 26-30 and 26.8 percent are aged 31-35 years.
Employees in the age range 26-30 dominate TPM (39.7 percent) and KHTP (34.9
percent), while in MSC professional workers aged 31-35 years dominate (40.5 percent).
Local professional knowledge workers are mostly young executives. Almost 80-90
percent of them are hold Bachelors degrees, with 9 percent holding a Masters degree.
On average, 66 percent graduated from local higher-learning institutions. A total 53.4
percent of professional workers in TPM and 46.5 percent of KHTP earn gross salaries
between RM2,001 and RM4,000 per month. However, in MSC, 27.0 percent are paid
between RM2,001 and RM4,000 per month, while 29.7 percent earn a monthly gross
salary of RM4001-RM6000. In terms of work experience, the majority at TPM (46.6
percent) have worked for less than four years; at MSC the majority have worked for 5-8
years (30.6 percent), and at KHTP the majority have worked for 9-12 years (34.1
percent). This shows that local professional knowledge workers at KTHP are relatively
more experienced in term of years employed than workers at TPM and KHTP.
Innovation output
In terms of output of innovation activities in the patent submitted, only 19.5 percent of
the bumiputera professionals were surveyed. The submission of patents is relatively
high at TPM (35.6 percent) as compared to MSC (2.6 percent) and KHTP (7.0 percent).
Registering intellectual property/innovations enables companies to expand their
manufacturing operations and protect the rights to their inventions. Among the
bumiputera professionals surveyed, only 7.0 percent had managed to patent their
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299
Transfer of knowledge
Table IV shows that the overall knowledge transfer is at a moderate level. However,
expatriates play a substantial role at TPM, with most of the items measured being
classified as high level. Foreign experts were able and willing to transfer their expertise
through the sharing of work experience (M 3:6104, SD 0:9025) and holding
discussions to solve work-related problems (M 3:6364, SD 0:9553). Local
professionals also gained a better knowledge through observation of foreign experts
(M 3:6364, SD 0:9756) doing their job, and referring the job to foreign experts
(M 3:5779, SD 0:9059) to solve job-related tasks. Local professionals also refer to
reading material (M 3:4740, SD 0:9915) and task-related documents (M 3:3701,
SD 1:0350) written by foreign experts. In term of transferring production technology
from the parent company, the mean score is classified as being high at TPM, and
moderate at both KHTP and MSC, but the differences are insignificant. Among the
Number of patents
TPM
None
1-2
3-4
5-6
7-8
Over 10
Total
64.4
26.0
8.2
1.4
100.0
Patents submitted
MSC
KHTP
97.4
2.6
100.0
93.0
7.0
100.0
Total
TPM
Patents granted
MSC
KHTP
Total
80.5
12.3
6.5
0.6
100.0
74.0
16.4
5.4
1.4
1.4
1.4
100.0
100.0
100.0
85.7
9.0
3.5
0.6
0.6
0.6
100.0
93.0
4.7
2.3
100.0
Table III.
New patent submissions
and patents granted 2007
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Table IV.
Knowledge inflows from
foreign expert, parent,
and peer subsidiary
company
Mean
SD
3.6364
3.6364
3.6104
3.5779
3.5195
3.5130
3.4740
3.4286
3.3701
3.3636
3.3312
3.3182
3.2208
3.4615
0.9553
0.9756
0.9025
0.9059
0.9982
0.9983
0.9915
0.9624
1.0350
1.0530
0.9971
1.0707
1.0981
0.71913
Levela
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Table V.
Comparative knowledge
transfer
Mean
3.7281
3.2267
3.2165
3.4615
Knowledge inflowa
SD
0.51171
0.85264
0.74811
0.71913
Levelb
High
Moderate
Moderate
Moderate
Notes: aF2; 151 10:756, p , :001; bmean classification: 1:00-2:33 low, 2:34-3:67 moderate;
3:68-5:00 high
Source: Fieldwork, 2008-2009
Country
Mean
SD
Australia
China
India
Norway
USA
Finland
UK
Sweden
Japan
France
Switzerland
Singapore
Germany
4.1282
3.9385
3.7863
3.6923
3.6731
3.6603
3.5923
3.4103
3.3549
3.2821
2.9385
2.6923
2.5812
0.5187
0.2139
0.2821
0.3264
0.5684
0.3478
0.7173
0.5688
0.6816
0.4555
0.4121
0.9959
1.2139
Levela
High
High
High
High
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Note: Mean classification: 1:00-2:33 low, 2:34hyphen; 3:67 moderate, 3:68hyphen; 5:00 high
Source: Fieldwork, 2008-2009
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301
Table VI.
Comparative knowledge
inflows by country of
origin
Table VII.
Determinants of
knowledge inflows at
each science and
technology park
0.450
0.286 * * *
0.404 * * *
2 0.076
0.242 * *
2 0.143 *
0.173 * *
0.110 * *
0.036
0.030
2 0.087
2 0.012
0.721
14.348 * * *
73
0.405
0.078
0.083
0.086
0.098
0.074
0.072
0.035
0.068
0.057
0.084
0.008
Model 1
Error
b
1.218
0.237
0.266
0.188
0.282
0.166
0.208
0.104
0.154
0.183
0.289
0.018
Model 2
Error
21.355
1.766
0.597 * *
1.797
0.363
2.605
0.319
2.383
0.059
1.751
0.054
1.966 20.236
1.307
0.076
1.612
0.165
1.506
0.046
1.974 20.348
1.218
0.019
0.694
5.359 * * *
38
VIF
1.040
0.233
0.219
0.192
0.242
0.201
0.168
0.161
0.096
0.137
0.196
0.021
Model 3
Error
2 0.685
2.604
0.344
1.727
0.483 * *
2.429
0.038
2.051
0.127
1.518
0.139
1.437
0.034
1.415 2 0.317 *
1.534
0.188 *
1.790
0.145
2.039
0.280
1.187 2 0.038 *
0.597
4.174 * * *
43
VIF
Notes: Model 1, TPM; Model 2, MSC; Model 3, KHTP; *p , 0:10; * *p , 0:05; * * *p , 0:001
Constant
Workplace learning
Time management
Replication, adaptation, and innovation
Opportunities for self-development
Proficiency in Malay
Proficiency in English
Proficiency in Mandarin
Proficiency in Japanese
Proficiency in Arabic
Proficiency in German
Work experience
R2
F
n
0.418
0.087
0.088
0.084
0.107
0.076
0.075
0.043
0.051
0.063
0.087
0.008
Overall
Error
20.862
3.169
0.323 * * *
1.366
0.478 * * *
2.328
0.147 *
2.337
0.142
1.249
0.077
1.254
0.023
1.365
0.068
1.618
0.065
1.495
0.078
1.771 20.017
1.484 20.015 *
0.570
17.139 * * *
154
VIF
302
Independent variable
1.892
1.415
2.109
2.005
1.341
1.442
1.223
1.192
1.383
1.496
1.091
VIF
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setting, which occurs via teamwork and individual learning. Teamwork consists of
local professionals working with the inventor of the technology, coupled with input
from other countries. The team is responsible for carrying out research projects, either
within the company or their parent company. Research projects funded jointly between
the company and government should be initiated to enhance local inventions. This
scheme could also happen with local university researchers. In the initial stages, the
company identifies potential teamwork to be guided and trained as an inventor. In
addition, appropriate time and activities for replication, adaptation, and innovation are
accepted as significant factors, as mentioned in previous studies. However, indicators
related to the replication, adaptation, and innovation activities affected only the overall
inflows of knowledge. Similarly, factors in self-development opportunities are
significantly affected only within TPM.
Several studies have accepted that foreign language proficiency has a substantial
impact on knowledge inflow, mainly from the parent company and peer subsidiary
companies that operate abroad. Japanese language proficiency had a significantly
effect only within MSC, while English was significant within TPM. This shows the
dominance of the country of origin of foreign direct investment in a particular location
and the utilization of a certain language. Proficiency in the local language alone does
not provide an advantage in terms of inflow of knowledge. Therefore, local
professionals need to gain mastery of international languages, especially those young
professionals who yearn for new expertise from abroad. Thus, an absorptive capacity
is the primary transmission mechanism of knowledge inflow to local professionals to
assimilate and replicate new knowledge gained from external sources. Hence,
collaboration with foreign experts within the firm will facilitate effective knowledge
transfer. Formally, this can be operationalized by working in teams with foreign
experts to optimize access to specific knowledge and expertise, mainly concerning the
most recent technological developments. These activities allow information exchange
among and between foreign experts and local professionals. For knowledge transfer to
succeed, companies must prepare their employees with skills and a positive attitude
that implies that the company is not only allowing them to learn, but also to teach other
company employees. Greater training incentives must be designed in such a way to
promote in-plant training or employee attachment at the parent company or foreign
peer subsidiaries. Therefore, local professional workforces will gain better knowledge,
international experience, and the latest technology development from MNCs. Empirical
evidence from previous research shows that information and communication
technology can facilitate the transfer of knowledge, but that topic is not covered in
this study. Communication, teamwork, and work autonomy are also among the
predictors that should be expanded in a future study of sustained knowledge transfer.
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Appendix
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Figure A1.
Knowledge inflows
questionnaire
Corresponding author
Abd Hair Awang can be contacted at: hair@ukm.my
Reproduced with permission of the copyright owner. Further reproduction prohibited without
permission.