KUALA LUMPUR: Malaysian small and medium enterprises (SMEs) remained robust in 2018 as the sector braced for the adoption of Industrial Revolution 4.0 (IR4.0), with strong and encouraging support from the government.
While the performance of the sector is also affected by global volatility which has resulted in a weakening ringgit and in turn a rising cost of business, the situation is seen as temporary.
The business environment for SMEs continued to be supported by the government and corporate companies with various initiatives put in place to help SMEs promote their products and services locally and globally.
SME Corporation Malaysia (SME Corp), which has been tasked with coordinating and implementing SME development, had introduced various programmes and activities to spur growth for the sector.
In 2018, a total of 158 SME development programmes were being implemented with a total financial commitment of RM14.3 billion.
Among others, the agency spent RM217.33 million to implement 28 innovation and technology-related programmes, benefiting 37,429 SMEs under the innovation and technology adoption initiative in its annual SME Integrated Plan of Action (SMEIPA).
Based on the SMEIPA for 2018, a total of 151 SME development programmes were planned to benefit 613,576 SMEs.
In further enhancing the technology ecosystem, SME Corp had in June collaborated with Huawei Malaysia to sponsor a study on 2,033 SMEs across regions and sectors including services, manufacturing, construction and agriculture, to explore the state of adoption of information and communications technology.
As technology is innovating quickly, it was noted that SMEs found it difficult to increase their competitive edge especially in their readiness to adopt IR4.0. Hence, they need to improvise strategies for efficiency to stay relevant in the business and serve the customers.
The survey done by SME Corp on 1,469 SMEs showed that 66 per cent of the respondents were aware that insufficient knowledge and skills of employees are the greatest challenge for the successful implementation of IR4.0.
They still need support from alternative funding sources, such as private equity, venture capital or merger capital, to help build capacity, SME Corp said.
Highlights of the IR4.0 initiatives include the Industry4WRD National Policy on Industry 4.0 launched by the government to enable SMEs to be agile and adaptable to meet the challenges posed by IR4.0.
A total of 500 SMEs have been identified to be placed under the Industry 4.0 Readiness Assessment programme, with RM210 million allocated under this programme via the Ministry of International Trade and Industry. – Bernama
The government aims to increase SMEs’ contribution to the gross domestic product (GDP) to 41 per cent in 2020 from the 37.1 per cent recorded last year and 36.6 per cent in 2016.
The contribution of SMEs in the manufacturing sector is targeted to increase to 7.0 per cent of GDP by 2020 from the current 5.8 per cent.
In the 2019 Budget, the government has taken various initiatives to push the SMEs further with an allocation of RM17.94 million.
SME Corp has welcomed this as a further boost, especially in the areas of access to financing which will continue to be given an important emphasis, export promotion, entrepreneurship and various programmes under the SME Masterplan.
On the outlook for 2019, SMECorp projected the SME sector to grow by 6.0 per cent as against 5.9 per cent in 2018.
“With the advent of megatrends such as IR4.0 and digitalisation as well as the emergence of new market-based funding and FinTech, SMEs are expected to be more productive, efficient and able to reduce the costs of doing business,” it said.
Meanwhile, the Leading Entrepreneur Accelerator Platform (LEAP) market on Bursa Malaysia has seen a total of 20 companies making their debut since its launch in July 2017, including Metro Healthcare Bhd, Nova Pharma Solutions Bhd, Polymer Link Holdings Bhd and Amlex Holdings Bhd.
The latest was eye care services provider Topvision Eye Specialist Bhd on Nov 28 which raised RM12 million, the largest initial public offering on the platform to date.– BERNAMA
