Effective Human Capital and Efficient Intellectual Capital will Enhance Bumiputra SMEs Performance in Malaysia

This research aims to enhance the performance of SMEs by utilizing intellectual capital (IC), with a specific focus on human capital (HC) as the key aspect that will impact SME performance. The study entailed disseminating well-organized questionnaires and collecting data from 266 managers of SMEs. A purposive sampling approach was employed to determine the sample size for the study. Data was analyzed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The study shows that the IC components (human, customer, structural, and social) enhance SME performance. It was found that HC positively correlates with customer, structural, and social capital. This study provides valuable insights for practitioners on the success of SMEs in Malaysia. In conclusion, this study will assist policymakers in developing programs conducive to SMEs. Implementing policies that facilitate training and education, research and development, and industry networks can help SMEs use their IC to improve business outcomes.