Transcript Slide 1

Empowering SMEs
to expand to
International Market
(Malaysia's Experience)
APEC SME Ministerial Meeting, Bali, Indonesia
7 September 2013
Demographic highlights …
USA:
314 million
CHINA:
UK:
63.2 million
1.3 bn
MALAYSIA:
29.7 million
INDIA:
1.2 bn
INDONESIA:
238 million
With a population of merely about 30 million, Malaysia can’t afford to rely on2
domestic consumption only to achieve high-income nation status by 2020.
Internationalisation is crucial…
Facts & Figures
Population: 29.7 mil
Women: 14.66 mil (49.3%)
Youth*: 11.5 mil (38.7%)
GDP: 0.3 tri
Population: 2.7 bil
Women: 1.4 bil (51.9%)
Youth*: n.a.
GDP: 40.3 tri
*Aged 15 – 24 years old (as defined by UNESCO)
Source: 1. http://countrymeters.info
2. http://www.apec.org
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SMEs are the backbone of the economy…
Important domestic source
of growth
Country
Comparison
Total
Establishments
97%
99%
99%
Foundation & support in
supply chain through
forward & backward
linkages
Balanced growth
32%
37%
46%
Employment
59%
75%
65%
Exports
19%
28%
34%
GDP
Strengthen resilience of the
nation's economy
Provide support for growth
of new & existing sectors
Promote private sector-led
growth
Source: 1. Economic Census 2011, Malaysia
2. Office of Small & Medium Enterprises Promotion, Thailand (OSMEP)
3. Small Business & Entrepreneurship Council, USA
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Holistic approach to SME development brought
positive results…
SME growth outperformed overall GDP growth during 2004 – 2010:
• 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)
GDP & SME GROWTH
12%
10%
8%
6%
4%
2%
0%
-2%
-4%
GDP & SME Growth
(change)
28.6% share
of GDP
32% share
of GDP
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Year
GDP Growth
SME Growth
Source: DOSM and SME Corp. Malaysia
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SME Masterplan to chart direction for SME
development…
High-income
nation
National
policies
ETP
ETP
Year 2020
GDP
41%
Employment
62%
Exports
25%
SME
Masterplan
Year 2010
RTP
RTP
GTP
GTP
GDP
32%
Employment
59%
Exports
19%
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New SME Development Framework for innovationled and productivity-driven growth
Vision
Globally competitive SMEs across all sectors that enhance wealth
creation and contribute to the social well-being
SME Development Framework
Goals
Focus
Areas
Increase
business
formation
Expand number
of high growth
and innovative
firms
Innovation & Technology
Adoption
Market Access
Raise
productivity
Human Capital
Development
Legal & Regulatory
Environment
Intensify
formalisation
Access to Financing
Infrastructure
Action Plan
Institutional
Support
Reliable
database
Monitoring &
Evaluation
Effective
Coordination
Effective Business
Services
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Through interaction with stakeholders, 6 focus areas were
identified where constraints need to be addressed
Constraints to Growth
Innovation & Technology
Market Access
• Limited participation in national
innovation system
• Low product commercialisation
and R&D spending
• Poor technology uptake
• Low bargaining power
• Information barrier for exports
• Limited focus on marketing &
branding
Human Capital Development
• Workforce lacks job readiness
• Low utilisation of existing
training
• Non-competitive rewards &
benefits
Legal & Regulatory
Framework
• Ease of obtaining licenses
• Bankruptcy law limits
entrepreneurs
• SME taxation
Access to Financing
Infrastructure & Security
• Early stage financing
• Poor creditworthiness
• Lack of know-how and
resources
• Low and infrequent trade
volume
• Inefficient trade facilitation
system
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Plan proposes 32 initiatives across all focus areas,
of which 6 are High Impact Programmes
6 High Impact Programmes
(HIPs)
• 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%
Measures across 4 Themes
•
•
•
•
Resource pooling & shared services
Create demand for SME products
Reduce information asymmetry
Building capacity & knowledge
Measures for East Malaysia
• Improve connectivity & basic amenities
• Review restrictive laws & policies
• Ease market access
Other Measures
• 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
Result-based approach with monitoring & evaluation
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Going Export (GoEx) Programme to expedite
internationalisation of SMEs
• Uncertainty on new market entry & high upfront cost for information
access are biggest deterrents to expand overseas
Context
• SMEs require assistance from market experts (private service
providers)
Programme
Management Team
(Pvt. Sector)
Preparation &
execution of Export
Sales Plan
Required
services
Emerging
SME
Exporters
Part payment for
required services
• Customised assistance
on steps to export
• Link to expertise to
implement
• Targets:
- New Exporters
- Existing Exporters (new
product / market)
• Matching grant
- Cost of Export Sales Plan
(ESP) if needed
- Other support in ESP after
proof of export arrangement
• Market driven after initial
success
• Link to buyers
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Industrial Linkages
 Facilitating access to market by integrating SMEs into the supply
chain of the large companies
 Concentration on high value-add portion of the supply chain…
RETAIL
LOCAL
INTERNATIONAL
MANUFACTURING
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Malaysia’s Experience…
Opening
Ceremony
Officiated by PM
of Malaysian
4 MoUs
between
SME Corp:
Small & Medium
Business, Korea;
Small Ent. Dev.
Fund, Yemen;
Entrepreneurship
Dev. Fund
(DAMU),
Kazakhstan &
Touch N Go,
Malaysia
No. of Booth: 406
Potential Sales:
No. of Companies:
302 (247 local,
55 international)
International
Participation:
Korea, Japan,
Iran, Italy,
Thailand, Papua
New Guinea
US$98 mil
with 165
90 companies
sessions
recognised as
1-InnoCERT
companies
BAE Systems,
Tesco, TM,
HICOM, MDEX
6 Winners
No. of Visitors:
8,706
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4th Global Entrepreneurship Summit 2013
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11 – 12 October 2013
in
Kuala Lumpur Convention Centre
THEME:
“EMPOWERING & CONNECTING ENTREPRENEURS”
http://www.geskualalumpur2013.org/index.html
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