More attention must be given towards small, and medium enterprises (SMEs), and not just micro SMEs, to help increase productivity of the players of the industry in Malaysia.
This includes assisting SMEs to become environmental, social, and corporate governance (ESG)-compliant and protecting their respective intellectual property.
Association of Small and Medium Enterprises Malaysia (SAMENTA) deputy central chairman, Datin Lorela Chia, said policies related to SMEs in Malaysia were often focused more on the small players.
Micro SMEs are businesses with an annual turnover of RM300,000 and below, while small enterprises have a sales turnover from RM300,000 to RM15 million. Medium scale enterprises, meanwhile, enjoy a sales turnover of between RM15 million and RM50 million.
“Granted, the government has been doing a lot for SMEs over the years. But it’s time to move beyond the grassroots and focus more on the higher hanging fruits,” said Chia.
“There must be a shift in the need to introduce policies that will help everyone in the industry grow, instead of using the same formula or approach for everyone,” she said.
Elaborating on the need for different approaches to cater to the different segments, Chia said as an example, when it comes to digitisation, the focus of micro SMEs would likely be on the setting up of websites and developing social media advertising and marketing. However, digitisation efforts for a manufacturer with a sales turnover of RM40 million, would be vastly different, most likely centring on automation.
“This is why you need to differentiate the SMEs, as they are not the same. When the distinction can be drawn, more targeted packages can be offered to the different groups of SMEs,” Chia said.
She added that this was part of the wish list of SMEs ahead of the tabling of Budget 2023 on Feb 24.
Chia said many Malaysian SMEs are part of the global supply chain, furnishing goods, materials, and services to various parts of the world, including the United States and Europe.
“Multi-national companies are taking a hardline approach on environmental, social, and corporate governance (ESG). The government needs to educate and teach SMEs about this.
“If SMEs do not comply with ESG regulations, they will not be able to be a part of the global supply chain.
“Another area that needs to be focused on is intellectual property. This includes turning ideas into business assets, which have value,” added Chia.
She said SMEs were innovative and creative, but oftentimes, they are not aware of how intellectual property rights can protect their inventions and designs, and even help them fund future innovations.
“A good invention can be turned into a business asset. It is something that can be used as leverage or collateral, provided it is protected.”
She said many SMEs were not familiar with the country’s intellectual property laws.
“This is where the government can play a role, by embarking on more awareness and educational programmes on intellectual property protection,” said Chia.
“In the long run, this will also help in developing and adopting emerging technologies. It will also help Malaysian SMEs nurture our own R&D (research and development),” she added.
Last month, Prime Minister Datuk Seri Anwar Ibrahim said government policies should focus on improving the capacity of the SME sector, as it is one of the pillars of the national economy. Anwar said the sector has significant potential and employs a large number of workers.
Data, as of December 2021, shows that there are more than 1.15 million SMEs nationwide.
The sector also contributes more than 38 per cent, or over RM500 billion, to the country’s gross domestic product.