KUALA LUMPUR: Malaysia’s small and medium enterprises masterplan is showing results, says the World Bank.
One key area where it has worked well, according to the World Bank, is in innovation and technology adaptation.
It gave as example, the decision to make the green light-emitting diode (LED) business a focus for SMEs. This, it said, had seen huge growth over the years and good international exposure.
In 2016, Malaysian firms sold RM116.9 million in LEDs, compared with just RM65.6 million in 2012.
The World Bank said Malaysia’s future areas of focus would be in the areas of medical devices, oil and gas, shipbuilding and repair, and aerospace.
Each sector will receive specific attention for a 12-month period in an effort to kick-start activity in that area.
“In terms of numbers, SMEs are significant, and they form the backbone of Malaysia’s economy,” a report on the World Bank’s website quoted the Chief Executive of SME Corporation Malaysia Hafsah Hashim as saying.
“To us in Malaysia, small is the new big,” Hafsah, who helped create the 2012-2020 SME Masterplan which was designed in conjunction with the World Bank Group, said.
The masterplan includes a structured framework to advance SME development. By 2020, Malaysia aims to push SMEs’ contribution to the Gross Domestic Product to 41 per cent and the share of the country’s exports from SMEs to 23 per cent.
The report quoted Anabel Gonzalez, Senior Director of the Bank Group’s Trade and Competitiveness Global Practice as saying: “Malaysia’s transition to a high-income economy will highly depend on SMEs’ contribution to GDP growth. In addition, SMEs have a significant role to play in creating opportunities for women and youth.”
Hafsah said Malaysia’s SME growth had outpaced that of the overall economy, but the country’s target of 8 per cent SME growth through 2020 would be tough to maintain, given that the overall economy was growing only at about 5 per cent annually.
Ninety-seven per cent of business establishments in Malaysia are SMEs. These businesses are responsible for nearly 36 per cent of the country’s GDP, 65 per cent of the country’s employment, and nearly 18 per cent of Malaysia’s exports.
SMEs have been at the core of Malaysia’s economic transformation since the 1990s to an upper-middle income nation.
The report noted that another innovative programme being implemented by the SME Corporation is one called the Tube Youth Development Programme which is meant to spark the entrepreneurial spirit among young Malaysians.
Based on a boot camp concept, the programme sends participants to a jungle for a week to test their leadership, discipline and teamwork skills. Those who make it through the camp continue on to year-long apprentice training programs.
“This strategy is simple: entrepreneurship is not a 100-metre burst. It is a marathon and needs a lot of energy and a lot of stamina. If they can’t get through one week, we feel they can’t get through the entrepreneurship journey,” said Hafsah.
She added: “We want to create employment providers, not employment seekers.”