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By:
Burhanuddin Saidin
Director
Organisational Capacity Development Division
Malaysia Productivity Corporation
27 May 2010

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| 
AGE A:
A:--
‡ MPC:
MPC:-- An Overview
‡ Malaysia¶s Competitiveness Ranking
‡ About SMEs in Malaysia
‡ Transforming SMEs into Global Players

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DEFINITION OF SMEs
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uNIQuE FEATu ES OF SMEs
ß have an owner/manager with few generic business
skills or a particular technical expertise
ß have personal assets committed as security for the
business
ß operate flexibly rather than on a strict observance of
regulations
ß have a vision and outlook that is bounded by the
skills and experience of the founder/owner and tight
resource constraints
ß operate in provincial areas, be a key part of the
social fabric of the community

º1 ' ?!   #     


  #         Ñ"2 
| 
IMPO TANCE OF SMEs
ß The significance of SMEs is associated primarily
with their role in stimulating economic growth.
ß Other significant contributions of SMEs:
Because they are labour-intensive, SMEs create
employment opportunities.
SMEs enhance regional development and create
more equitable income distribution due to their
location and ongoing expansion throughout the
broader community.

º
        !     > 
    º "  
| 
IMPO TANCE OF SMEs

SMEs play a vital complementary role in relation to


larger firms--as suppliers and distributors.
SMEs serve as a training ground for developing the
skills of workers and entrepreneurs.
The presence of SMEs curbs the monopoly power of
larger firms and provides the structure of the
economy with greater flexibility.
Thus, a country can reduce its vulnerability to
financial crises by strengthening its SMEs.

º       #  ! 


        Ñ8  1
|  
SOME FACTS & FIGu ES
ß A total of 99.2% (552,849 companies in operation)
of all manufacturing and service businesses are
SMEs and the majority of SMEs (86.6%) are in the
services sector.

ß Employment- SMEs accounted for 56.4% of the total


workforce.

ß GDP-SMEs contributed 33% of the total output.

ß Total Export-SMEs contributed 19%.


( ef: SMIDEC 2009)

º !          Ñ


+ 
   #BCFD |  
Contribution of SMEs to Gross Domestic
Product, Employment, and Export by Sector
in 2005


| 
COMPOSITION OF SMEs IN MALAYSIA
Based on Census on Establishments and Enterprise 2005, out of
99.2% of SMEs, the services sector comprise 474,706 (86.6 per
cent), followed by 39,376 (7.2 per cent) in the manufacturing
sector and 34,225 (6.2%) in the agriculture sector.

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Contribution of SMEs in Services Sector, 2005

šHealth include hospital,


medical, dental and veterinary
services, herbalist, homeopathy
and foot reflexology
2
| 
Contribution of SMEs in Manufacturing Sector, 2005

5
| 
Contribution of SMEs in Agriculture Sector, 2005

$
| 
SMEs::- CHALLENGING ISSuES
SMEs

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; Programme on QCC was first launched in 1982 by
Y.A.B. Prime Minister

; Establishment of CoE on Creativity and


Innovativeness

; ICC Programmes for Public and Private Sectors

; MPC internal ICC comprising 40 circles

; Innovation Jam 2008 (generated 993 ideas)

; Innovation Jam 2009 (held on 11 July 2009)

; Nurturing innovative and creative circles (ICCs


(ICCs)) in
creating value for organisation

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2001 ~ 2004 2005 ~ 2008


Companies with PLWS Elements
in Collective Agreements 691 749

Impact of PLWS Implementation 2006 (%) 2008 (%)

Productivity 2.64 5.17


Staff Turnover 5.21 2.13
Absenteeism 8.80 4.17
Rejects and Reworks 5.33 2.85

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‡ 90% SMEs surveyed recorded between 2%-10%


growth in productivity, sales and profitability;
‡ 86% SMEs achieved a reduction of 5%-10% in
accident rate; and
‡ 40% SMEs reported between 7%- 10% reduction
in customer complaints, absenteeism, rework and
reject rates.

º      " ! #! 


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á ormulate new economic


model based on
innovation, creativity and
high value´
value´
  
    

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áIf we can tie productivity with


innovation and creativity,
creativity, the
improvements in problem solving
will see a quantum leap instead of
just being incremental´
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