Innovation in Small and Medium Enterprises in Vietnam: The Role of Human Resource Management

This study aims to analyze the impact of human resource management practices on innovation of Small and Medium Enterprises (SMEs) in Vietnam in the dynamic and competitive environment. The study uses the data collected by Central Institute for Economic Management (CIEM) in 2011, 2013 and 2015. By using the Tobit model, the results show that Human Resource Management (HRM) practices positively influence innovation of SMEs, and the most significant relation to innovation is training. Based on the findings, small and medium firms in Vietnam need to manage human resource effectively by some activities such as training, union, wage and job rotation in order to promote innovation output, including new products, new process and modified product.