Propelling Malaysian SMEs into - PowerPoint Presentation

Slide1

Propelling Malaysian SMEs into a Higher Economic Contributor

Saudi International SMEs Forum 2013, 29th May 2013

b

y:

Dato’ Hafsah Hashim

CEO of SME Corporation Malaysia

Definition of SMEs

Annual sales turnover

< RM25 million

(

£5.42

million

)

OR

Full time employees

<150

Annual sales turnover

< RM5 million (£1.08 million)OR Full time employees < 50

2

SMEs account for bulk of total businesses in Malaysia … 97.3%

3

97.3% of total establishments (645,136) versus 548,267 on 2003

Mainly (77%) microenterprises

Concentrated in services sector (90%)

Services

Distributive Trade and Repair of Motor Vehicles and Motorcycles (50%)

Restaurants (25%)

Manufacturing

Textiles & Wearing Apparel (26.5%)

F&B Products (16%)

Construction

Non residential buildings (21.5%)

Civil Engineering (21.0%)

Agriculture

Crops (70.4%)

Livestock (13.4%)

Mining & Quarrying

Stone Quarrying (83.6%)

Mineral Mining (16.4%)

90.0%

3.0%

0.1%

Source: Economic Census 2011

SMEs are the backbone of the economy

Source: Economic Census 2011

4

97%

Total Establishments

32%

GDP

19%

Exports

59%

Employment

SME Value Added and Overall GDP Growth…

5

GDP & SME Growth

SME growth outperformed

overall GDP growth during 2004 – 2011:

NSDC was set up and SME development accorded national agenda

Other supportive policies (improvement in government delivery, higher domestic demand and tourism, focus on farmers and small contractors)

%

Year

Source: DOSM and SME Corp. Malaysia

GDP & SME Growth (yoy change)

6

Moving forward, SME development to be innovation-led and productivity-driven through the

SME

Masterplan

“Unless we introduce a ‘

game changer

’, we will be caught in a middle-income trap, and no longer as competitive on cost...”

“… the Government would adopt

a differentiated approach

to accelerate the growth of SMEs and to provide the impetus for growth led by the private sector.”

“ … an

innovation-led economy

demands a new breed of SMEs

that can help foster market and technology-driven innovation to create more high-skilled jobs in all economic sectors.”

Prime Minister of Malaysia /

Chairman of National SME Development Council

Approach

Public-private

partnership

‘Live’

plan

Outcome

-based

Innovation

and

productivity

-led

SME

Masterplan

takes a

new approach

in

SME

development

7

New SME Development Framework for

innovation-led and productivity-driven

growth

Market Access

SME Development Framework

Goals

Increase business formation

Intensify

formalisation

Expand number of high growth and innovative firms

Raise productivity

Reliable database

Monitoring & Evaluation

Effective Coordination

Effective Business Services

Innovation & Technology Adoption

Human Capital Development

Legal & Regulatory Environment

Access to Financing

Infrastructure

Globally competitive SMEs across all sectors that enhance wealth creation and contribute to the social well-being

Vision

Focus Areas

Institutional Support

8

Action Plan

Plan proposes 32 initiatives across all focus areas,

of which 6 are High Impact

Programmes

Result-based approach

with monitoring & evaluation

6 High Impact

Programmes

(

HIPs

)

Measures across 4 Themes

Measures for East Malaysia

Other Measures

Integration of business registration & licensing

to enhance ease of doing business

Technology Commercialisation Platform (TCP)

to encourage innovation

SME Investment Programme (SIP)

to provide early stage financing

Going Export (GoEx) Programme

to expedite internationalisation of SMEs

Catalyst Programme

to promote more homegrown champions

Inclusive Innovation

to empower the bottom 40%

Resource pooling & shared services

Create demand for SME products

Reduce information asymmetry

Building capacity & knowledge

Improve connectivity & basic amenities

Review restrictive laws & policies

Ease market access

Completion of Integrated trade clearance and facilitation system

(single window)

Bankruptcy Law to give entrepreneurs a second chance

Synchronise measures on productivity enhancement technologies with other relevant labour policies

9

Target is to increase contribution to GDP to

slightly over 40% by 2020

Projections by SME Corp. Malaysia

Economic Contribution in 2020:

GDP

Employment

Exports

2010

2020

GDP Growth

Quantum leap

“Business as usual” growth

New SME growth path

CAGR (% change)

(6.5%)

(8.7%)

10

Public – Private Collaboration

Malaysia Incorporated initiated in 1983 to

recognise

importance of private sector in economic growth

Concept: Nation is a corporate or business entity, jointly owned by both sectors and working together in pursuit of a common mission of nation

Operating Mechanism

11

3 structural mechanisms established to promote

intersectoral

consultation and cooperation

12

Public-private sector collaboration scaled new heights with establishment of PEMUDAH in February 2007

The Special Taskforce to Facilitate Business or

PEMUDAH

:

High-powered taskforce to address bureaucracy in business-government dealings

13

SME development a shared responsibility...

Government

Private Sector

Facilitator

Act as catalyst

Associations, chambers & NGOs to develop

SMEs

Large firms to mentor

SMEs

Participation in design & implementation of

progs

.

Way Forward :

14

..with

private sector assuming a greater role

15

Bling - Business Linkages

To develop

competitive and innovative

SMEs

To widen the

business opportunity

of SMEs in supplying products and services to large companies and Multinational Companies (MNCs)

To

encourage business networking

between SMEs and MNCs & GLCs

OBJECTIVES

“It's efficient”

“good database”

“Pre-evaluated companies”

“Good match”

16

SME COMPETITIVENESS RATING

FOR ENHANCEMENT (SCORE)

PUNB

CIDB

MINDEF

TPM

MDEC

PSDC

SME Bank

TM

MPC

HDC

NCIAMTIB

A diagnostic tool to rate and enhance competitiveness of SMEs based on their performances and capabilities.

Developed in August 2007.

What is SCORE?

Identify strengths and weaknesses for improvements; and

Facilitate linkages.

Function

Business Performance

Financial Capability

Management Capability

Production Capability

7

Parameters

0 – 2

: Very basic business operation

3 – 5

: Competitive and export-ready

companies

Characteristics

Collaborators

Example of Radar Diagram for 3-Star company

Analysis

:

Weak in financial capability

Assistance

:

Requires training in financial management & improvement in quality management

Technical

capability

Quality System

Innovation

17

1-INNOCERT

IV.

Innovation

Outcome

III.

Innovation

Management

II.

Commercialization

Ability

I. Innovation Ability

To date,

115 companies have been certifiedInnovation Certification for Enterprise Rating and Transformation Programme

18

NATIONAL MARK OF

MALAYSIAN BRAND

To enhance the

visibility

of

Malaysian products and services

in both local and international markets.

To date,

59 companies

have been certified

ASSESSMENT CRITERIA

Management Commitment &

CapabilityFinancial CapabilityBrand Management & MarketingOperations ManagementQuality & Standards of Products/Services

Management Best Practices

Social Responsibility

19

SME Corp. Malaysia

www.smeinfo.com.my

www.smecorp.gov.my

1-300-30-6000

SME Annual Report

2011/12

Physical

KL Sentral

MOVING forward

T

hank you