Buck up or risk losing out, Malaysian SMEs told

[ 12-04-2008 ]

Buck up or risk losing out, Malaysian SMEs told

LOCAL small- and medium-sized enterprises (SMEs) are once again being urged to move up the value chain to remain competitive or risk losing out in the increasingly challenging global market.

Associated Chinese Chamber of Commerce and Industry Malaysia (ACCCIM) secretary-general Tan Sri Soong Siew Hoong said many SMEs still lag behind their counterparts in other countries, especially in research and development (R&D).

"It is important for our SMEs to adopt the latest innovation and technology know-how either through acquisition or their own R&D initiatives," he told reporters after a seminar on "Linking SMEs to Technologies and Funding Opportunities" organised by Sirim Bhd in Kuala Lumpur yesterday.

Based on the numbers obtained from the Finance Ministry, current R&D spending is just 0.4 per cent of the country's gross domestic product (GDP).

"Although SMEs comprise 99 per cent of all business establishments in the country, their contribution to the GDP is only 32 per cent.

"This is much smaller than China's 60 per cent and lower than neighbouring countries such as Indonesia at 57 per cent and Thailand at 38.9 per cent," he said.

Soong said as part of efforts to close the gap, SMEs must become more proactive in making full use of various grants and incentives offered through several government ministries and agencies.

Agencies such as Sirim have the expertise to offer various facilities and assistance to SMEs in areas of R&D, and help ensure their products or services are market driven.

At the same time, the Small and Medium Industries Development Corp and the Malaysian Technology Development Corp have the funds to help industry players to move forward.

"If SMEs fail to nurture an innovative culture in their operation, they will tend to lose out and become irrelevant to the market," he said.

Soong said emerging economies such as China, India, Thailand and Vietnam, that supply abundant cheap labours, have already overtaken Malaysia as the major centre for labour-intensive industries.

"The emergence of knowledge-based economy also imposes great pressure on SMEs, as they will have to transform their industrial activities to be more capital intensive and knowledge-based," he said.

source: http://www.btimes.com.my/Current_News/BTIMES/Friday/Nation/acim.xml/Article/