Acknowledging the potential of innovation in transforming government into high-performance government, the Malaysian has intensified their commitment to the public sector innovation through implementation of various policy and initiatives. However, knowledge about the current level of performance of public sector innovation in Malaysia is still very much lacking. Thus, using sectorial innovation system theory as a pillar, this study examines the relationship between innovation capability, wider public sector condition for innovation, innovation activity as the independent variable and innovation performance as the dependent variable. The Structural Equation Modelling analysis conducted on 456 data set found that innovation performance was influenced by innovation capability, wider sector condition for innovation and innovation activity. The implication of the study concludes the need for dedicated policy and strategic intervention for improving the innovation performance in Malaysia by focusing on innovation capabilities, wider public sector condition for innovation and innovation activities.
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