SMEs set to contribute more to GDP

Source From (Business Times): http://www.btimes.com.my/Current_News/BTIMES/articles/jrsme/Article/index_html

Published: on 17 May 2012
By June Ramlee

THE contribution of the small and medium enterprises (SMEs) to the country's economy is expected to increase from the current 32 per cent to 41 per cent in the next eight years.

SME Corp Malaysia chief executive officer (CEO) Datuk Hafsah Hashim said SMEs will contribute almost half of the gross domestic product (GDP) by 2020, when Malaysia is expected to achieve a developed status.

Hafsah said SME Corp is currently very much engaged in ensuring that its programmes and policies are moving towards achieving the target.

She said despite the current challenging time, Malaysian SMEs will be resilient enough to put good innovative products in the market.

"Local SMEs were well tested in the 2009 economic crisis, and they were able to recover very fast last year.

"This year, we cannot move away from market uncertainties and challenges, but this is where we see competitive SMEs are able to be more resilient in terms of putting in place innovative business practices," she said when after a talk presented by former international trade and industry minister Tan Sri Rafidah Aziz here yesterday.

Hafsah also said that a recent study commissioned by SME Corp revealed that businessmen had lost RM5.4 million during the Bersih 3.0 rally held on April 28.

"Due to 58 road closures on that day, the ones that were most affected by the rally were the taxis and buses," she said.

She added that many businesses located along Jalan Tunku Abdul Rahman in Kuala Lumpur (where the rally had taken place) saw a decline in their earnings for the day by 30 per cent to 60 per cent.

However, Hafsah did not mention the number of shops interviewed for the survey.

"This is the first time such a study had been done. It's good for us to know the extent of the losses for the businesses. We went down to gauge the losses for a day if something like that should happen again," she said.

Earlier, in a talk entitled "Role of SMEs in Creating a High Income Economy", Rafidah said SMEs should look at new areas of business in the coming years, such as biomedical which has a huge potential.

Rafidah, who is also AirAsia X chairman, said a special mechanism on research and development (R&D) on innovation should be set up for the SMEs to engage with research institutes and universities to enhance their operations.

She said the R&D is essential as Malaysia needs to fully utilise the remaining eight years to boost SMEs' performance in the market, or else, the companies may ignore the importance of innovation in business.

She also believed that the government should provide a special fund for the SMEs to conduct R&D.

"I've been told that our local SMEs spend less than 0.06 per cent of their revenue on research," she added.

The talk was organised by Institute of Marketing Malaysia.