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 Business

SMEs’ contribution to GDP rises to 40 pct by 2020

141211_pairin-mou
Pairin (2nd left) witnessing the exchange of signed documents between SEDIA president/chief executive Datuk Dr Mohd Yaakub Johari (left) and IST executive chairman Nordin Abd Malek

14th December, 2011

KOTA KINABALU: The role of small and medium enterprises (SMEs) sector is set to expand as its contribution to the national gross domestic product (GDP) is expected to increase from 31 per cent in 2010 to 40 per cent by 2020.

Chief Minister, Datuk Seri Musa Haji Aman said this was attributable to the introduction of initiatives by the National Small Medium Enterprise Development Council to strengthen the competitiveness of SMEs, which were reinforced by measures to be implemented under the 10th Malaysia Plan and the SME Master Plan (2011-2020).

“The Malaysian SME Master Plan also focuses on creating an enabling environment to accelerate the growth of SMEs through productivity gains and innovation, in order to bring SMEs to next level of development,” he said.

“One of the strategic goals under the plan is to expand the number of high-growth and innovative firms by way of encouraging greater innovation as well as adopting of technology among SMEs,” he added.

Musa said this in his keynote address at the seminar on “Sabah Development Corridor (SDC): Promoting SMEs and Entrepreneur Development in Sabah” held at a resort hotel here yesterday.

His speech was read by Deputy Chief Minister cum Infrastructure Development Minister Tan Sri Joseph Pairin Kitingan.

The seminar was jointly organised by the Sabah Economic Development and Investment Authority (SEDIA) and the SME Corporation Malaysia (SME Corp).

Musa said Malaysia had close to 600,000 SMEs playing a significant role in the nation’s economic development.

“SMEs represent a whopping 99.2 per cent of total active business establishments, and due to their large number, Malaysian SMEs have the potential of becoming among key drivers in transforming the country towards an innovation-led economy,” he said.

He noted that SMEs had consistently since 2004 outperformed overall national economic growth at an average of 6.3 per cent compared with the 4.5 per cent in average annual GDP expansion. This sector has helped stabilise economic growth during periods of financial crisis.

“Development of innovative and creative SMEs is one of the key elements in transforming Malaysia’s economic structure towards the high-income nation target,” he said.

SME Corporation Malaysia, he said, was implementing a special certification programme to encourage innovation among entrepreneurs. This is known as the Innovation Certification for Enterprise Rating and Transformation Programme which seeks to identify, certify and recognize innovative Malaysian SMEs. The Malaysian government had also introduced the SME Innovation Award to identify and recognize the most innovative SMEs.

He urged entrepreneurs in Sabah to seek advice from SME Corporation Malaysia as it is entrusted with the primary task of coordination development of SMEs and in ensuring the effectiveness of programme implementation.

Musa who is also Finance Minister encouraged banks to continue supporting the growth of SMEs through the introduction of innovative products.

“Banks are the main source of financing for SMEs, contributing more than 80 per cent of financial support, complementing government funds and schemes, leasing and venture capital companies,” he said.

Meanwhile, Musa said SMEs would be accorded special focus in the second phase of the Sabah Development Corridor (SDC) implementation, from 2011 to 2015.

He said SEDIA would be supporting the creation of a viable environment to create vibrant SME development in the state.

This will be done, he added, by providing greater focus on strengthening SMEs, rural entrepreneurs, agro-entrepreneurs and start-ups identified under the SDC initiatives.

“The entry of new entrepreneurs, especially start-ups in knowledge-intensive sectors, which can serve as new growth sources such as biotechnology, oil and natural gas, creative industries and green technology, will be promoted.

“SEDIA will customise special incentives designed to promote science-industry linkages in order to encourage anchor companies as well as start-ups having knowledge-intensive industries to invest in the SDC initiatives,” he said.

Musa said SEDIA would also establish incubators and business links to support the development of start-ups, SMEs, agro-entrepreneurs and techno-entrepreneurs in the knowledge-intensive sector to spawn development of new sources of growth in line with the Economic Transformation Programme.

He said SEDIA would establish two incubators, including one at the Sabah Agro-Industrial Precinct (SAIP) in Kimanis which is dedicated to support the creation of entrepreneurs in agriculture.

The Chief Minister was pleased that SEDIA was also addressing the increasing demand for human capital when it signed a memorandum of understanding (MoU) with Institut Skill-Tech (IST) in the area of training entrepreneurs in agriculture development and related industries during the function yesterday.

   
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