Monday, September 17, 2012

Navigating future of SMEs

Source from (Business Times): http://www.btimes.com.my/Current_News/BTIMES/articles/naviga/Article/

Published: September 17, 2012

I CAME across a quote by Robert Orben, an American comedy writer, he said "Time flies. It's up to you to navigate".

It's amazing how time flies so fast that we are already entering the last leg of 2012. It is perhaps a good time to reflect and ponder on how we've faired in the past nine months or so. 2012 is a year, full of uncertainties, and yet, we continue to navigate our way with all hope and courage that we will reach the desired destination with minimal glitch.

On that note, as I pen my thoughts from Johannesburg, I have just realised that it's been a good six months since I've started to share my wisdom on matters related to SMEs in this column - I am hopeful that this column has shed some light on the development of SMEs in Malaysia, and the role of SME Corp in ensuring that the "primary engine" of the nation is navigating well.

Government officials like us mark September as the busiest period of the year as we prepare for the most awaited announcement - Budget 2013, a budget that will touch the lives of the Rakyat. While we wait with baited breath for the live telecast, I personally believe that the upcoming announcements for our SMEs will cheer the micro enterprises and give a new perspective in easing up the access to financing to our SMEs.

In my previous writing, I mentioned about the six high impact programmes (HIPs) carved in the SME Masterplan to escalate our SMEs to higher levels. It goes without saying that a house is only as good as its foundation.

The same applies to our six HIPs. The programmes would not take into effect and the impact will not reverberate across the country if it is not complemented with thematic measures to close the gaps and enhance performance of our SMEs.

Therefore, the first important thematic measure is to create demand for SME products through government procurement. It is understood that globally, governments a.k.a largest buyer of SME products and services play a big role in creating demand for SMEs. Developing a nation goes hand in hand with procurement contracts and tender notices.

Therefore, SMEs that hit a certain level of quality will be given priority and easy access to government procurement, which entails to market expansion in the long run.

Many might agree if I say that one of the common problems faced by SMEs is their inability to meet with the sudden surge of demand for their products. Hence, the second thematic measures which is resource pooling will encourage consortiums and aggregation of service providers for bulk purchase and assist in the consolidating and marketing of SME products and services.

Likewise, SMEs should also work together and form alliances to enable them to market their products in larger volumes. Brains put together is always better than going solo.

Moving on to the next frequently heard problem faced by our SMEs is the access to information on products and services offered by our banking institutions.

Alike, bankers may not have the sufficient information on credit history of SMEs to assess their credit worthiness thus making it even harder for the SMEs to obtain access to financing.

Therefore, this calls for an enhancement to the current credit information system which the masterplan has proposed as part of the third thematic measure is to reduce information asymmetry.

In ensuring that SMEs can withstand the many challenges that arise amidst the uncertainties in the market environment, the fourth thematic measure is building the capacity of SMEs towards enhancing the skills and productivity of SMEs which include ensuring industry readiness of new entrants into the workforce, tapping on talent from abroad as well as intensifying training programmes.

Notwithstanding the different levels of basic amenities between East Malaysia and Peninsular Malaysia, the SME Masterplan has proposed specific measures for SMEs in the eastern part of the country, which include infrastructure building to improve connectivity and improve basic amenities within East and Peninsular Malaysia through increased investments and enforcement.

To top it off, government delivery will also be improved to address administrative challenges that hamper the growth of the SMEs, particularly in East Malaysia.

Having said all these, at the end of the day it still takes two to tango. While the government at its level best has rolled out many initiatives, SMEs must also be open to changes and adopt initiatives which have been well thought out. SMEs must be bold in embracing change, more creative in their thinking and innovative in their business processes.

I strongly believe that with the right ingredients, tools and processes in place, in no time, the capabilities of our SMEs will be further escalated with the catalytic push from the government. Stephen Covey said, you must begin with an end in mind because without an end in mind, you will be grappling in the dark.

Definitely, "Malaysia Boleh!"

All the way from Johannesburg, wishing everyone a Happy Malaysia Day!

Datuk Hafsah Hashim is the chief executive officer of Small and Medium Enterprises Corporation Malaysia (SME Corp Malaysia).

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