| Summary: | Innovation is crucial for SMEs to survive and impacts the national economy. The present study is conducted in the context of knowledge-based SMEs in Malaysia concerning structural capital (technology capital, innovation capital, and organizational capital), innovative intelligence, and innovation performance. A survey was carried out through a face-face interview and online. A total of 136 usable questionnaires were then analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). This study has shed light on the role of the structural capital of knowledge-based SMEs on innovation performance. While structural capital is significant for organizations to achieve their competitive advantage and should be given necessary attention compared to human capital, innovation and technological capital were not fully capitalized. The presence of innovative intelligence in SMEs helps to be innovative. This result will be encouraging to SMEs in other developing countries. The results obtained are useful for SMEs, especially knowledge-based firms where technology and innovation are critical to achieving a competitive advantage. The results are also significant for agencies that handle SMEs in high-tech and policymakers to increase performance and promote economic stability. © 2022, Universiti Malaysia Sarawak. All rights reserved.
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