In the context of Industrial 4.0, Vietnam has emerged to play a critical role in the global supply chain while facing intense competition and fast changes. However, what drives manufacturing enterprises in Vietnam to innovate themselves and how well they perform in coping with business obstacle remains one of the central questions in the extent of studies. Therefore, this research primarily attempts to establish how innovation investment and obstacles affect technological and non-technological innovations, especially in the growth phase of the industry life cycle (ILC), with an analysis of available data obtained from the General Statistics Office of Vietnam and World Bank Enterprise Survey data with the use of descriptive statistics and regression analysis. The outcome of this article highlights that researchers and practitioners should consider the importance of the industry life cycle in the choice of technological or non-technological innovation through third significant contributions. First, the innovation investment is driven by R&D, and formal training enables both technological- and non-technological innovation. Second, the innovation obstacle related to finance, policy, competition, and regulation directly impacts the choice of innovation activities. Third, this study demonstrates that the firm’s engagement in technological- and non-technological innovation in line with innovation investment can help maintain successful post-innovation performance.

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Small and medium-sized manufacturing enterprises, the backbone of the Southeast Asian economy, are struggling to operate and maintain profitable growth in the face of the COVID-19 epidemic. During the recovery process, technological and non-technological innovation is a major factor in enterprise efficiency and profitability. However, it is unclear what drives manufacturing enterprises to innovate in technological and non-technological approaches and how they choose to implement innovation to keep their businesses growing and successful. Therefore, to answer this issue, this research develops and empirically tests a model based on dynamic capabilities and innovative perspectives utilizing World Bank Enterprise Survey data from 789 manufacturing enterprises in Southeast Asian countries. The hierarchical regression model assists create prediction equations to test technological and non-technological innovation as the mediators of structural reconfiguration and innovation investment on firm performance. The results reveal that structural reconfiguration and innovation investment impact technological and non-technological innovation. Additionally, structural addition and investment in formal R&D have a moderated impact on technological innovation. Finally, firm performance may be boosted by organizational innovation.

The purpose of this study is to examine the direct and moderating effects of internal endowment and external dynamism on capability reconfiguration, which in turn has a positive impact on a firm’s post-reconfiguration performance. A researcher-designed survey questionnaire was developed based on multiple works and subsequently administered with a final sample of 266 Vietnamese small and medium enterprises engaged in manufacturing industries. As a result, we find that internal endowment and external dynamism positively impact a firm’s capability reconfiguration and post-reconfiguration performance consequently. This empirical research provides four major contributions that supplement the extant literature. First, the internal endowment sponsored by resource abundance and absorptive capacity enables both a firm’s capability evolution and capability substitution. Second, the external dynamism in terms of market turbulence, technology turbulence, and competitive intensity directly affects the enterprise’s capability reconfiguration and positively moderates the relationship between internal endowment and capability reconfiguration. Third, this study demonstrates that the firm’s engagement on capability reconfiguration once in line with external and internal factors can help maintain its post-reconfiguration performance. Finally, the primary data collected in Vietnam offers a firsthand investigation of the catching-up economy to be compared with the research findings available in developed countries.