SHIFT Business Tech Seminar: Small is the new big
By Chong Jinn Xiung June 29, 2018
- Only 20% of Malaysian SMEs have adopted ICT
- Hopes to raise SME contribution to GDP up to 42% by 2020
THERE is a perception that Small and Medium Enterprises (SME) are just too small and don’t warrant the attention of larger companies. But don’t tell that to SME Association of Malaysia deputy president Ong Chee Tat (pic) because to him small is the new big.
Ong spoke at DNA’s first quarterly SHIFT Business Tech Seminar and highlighted that indeed SMEs should not be taken lightly because they make up 98% of registered companies in Malaysia.
He provided a breakdown of SMEs in Malaysia by sector, saying that the vast majority, or almost 87% are in the services sector. This includes those in F&B, logistics and IT.
Another 5% are in the manufacturing sector and 2% are in mining and construction.
According to SME Corp’s 2017 Annual Report, SMEs in Malaysia continued to expand at a faster pace despite challenges faced in 2016.
They recorded a real Gross Domestic Product (GDP) growth of 5.2% and contributed to 36.6% of the country’s GDP. Ong said that SME Association of Malaysia hopes to increase this to 42% come 2020.
Ong however, did highlight that there are several factors holding SMEs back including finances, infrastructure, adoption of technology, research and development and human resources.
He went on to say that it was alarming that in 2016 less than 20% of SMEs in Malaysia which numbered at 900,000 have not adopted Information and Communication Technology (ICT).
Ong cautioned SMEs that have not been adopting ICT to watch out for Industry 4.0. Malaysia been too reliant on foreign workers to bolster its labour force but the onset of Industry 4.0 means that automation will be a key driver. If they are not careful, SMEs could be left behind.
Nonetheless, he was glad to see that more industry players are starting to utilise big data analytics to improve and enhance their business. Ong pointed out that there is a shortage of data analytics experts due to the fact that universities are not producing them.
Even if one were to train a current workforce to be familiar with data analytics, very few full-time working professionals can afford to spend two to three years on a course in the subject.
On the other challenges facing SMEs, Ong said there was a lack of research and development carried out by SMEs resulting in very little innovation in the sector.
SMEs are also not investing enough in training their staff. But with any luck, incentives by the Human Resource Development Fund (HRDF) will encourage them to send their staff to up their skill sets, regardless of the size of the company.
“I always say that change starts with you. It doesn’t matter if you are the boss or manager, but the change must start with you,” he said.