IMPACT OF TECHNOLOGY TRANSFER RELATED FACTORS ON THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES (SMES) IN SRI LANKA: A STUDY ON THE SRI LANKAN MANUFACTURING SECTOR

Abstract

This study investigates the critical factors influencing the effectiveness of technology transfer on the performance of Small and Medium Enterprises (SMEs) within Sri Lanka's manufacturing sector. Guided by a comprehensive theoretical framework, the research categorizes technology transfer into four key dimensions: Humanware (skills and knowledge), Orgaware (organizational structure and processes), Technoware (tools and equipment), and Inforware (information and documentation systems). The primary objective is to identify which of these elements most significantly contributes to enhancing SME performance, while also evaluating the moderating roles of government policies, competitive intensity, and firm size. A quantitative research approach was adopted, utilizing data collected from 145 SMEs operating across diverse manufacturing industries in Sri Lanka. The data was analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) to examine the direct and moderating relationships between technology transfer components and SME performance, both operational and strategic. The findings reveal that all four components, Humanware, Orgaware, Technoware, and Inforware, positively and significantly influence SME performance, with Humanware and Technoware showing the strongest effects. Government policy support and competitive intensity were found to moderate these relationships, highlighting their role in facilitating or constraining the benefits of technology transfer. Firm size also emerged as a relevant contextual factor, affecting the degree to which technology transfer enhances performance outcomes. The study recommends that policymakers strengthen Humanware and Technoware capacities in SMEs through targeted initiatives such as training programs, technology grants, and infrastructure support. Enhancing the policy environment and competitive capabilities can further improve technology adoption, enabling SMEs to boost productivity, drive innovation, and achieve sustainable growth in a competitive, technology-driven market.