Malaysian Small and Medium Enterprises

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Malaysian Small and Medium Enterprises (SMEs) And Innovation Prof. Datuk Dr. Kamaruzaman Hj. Ampon Prof. Dr. Syed Azizi Wafa Universiti Malaysia Sabah

• “…The period of the IMP3 coincides with the remaining 15 years for the realisation of Vision 2020. To be a developed nation, it is important for industries, and the country, as a whole, to achieve global competitiveness. In this respect, the IMP3 has adopted the overall theme ‘Malaysia Towards Global Competitiveness’. Industries must strive for global competitiveness through the transformation and innovation of the manufacturing and services sectors.

• According to The Small and Medium Industries Development Corporation (SMIDEC) SMEs account for close to 99 % of all the establishments in the manufacturing, services and agricultural sector, provide around 65 % of total employment and it is expected that the value added production of SMEs to be around RM120 billion or 50 % of total production in the manufacturing sector by 2020.

• Malaysian SME contribution to the GDP was only 32 percent in 2006. Compared to that of • 40 percent in the United States, • 57 percent in Germany, • 55 percent in Japan, • 60 percent in China • 57 percent in Indonesia • and Thailand at 38.9 percent.

• Innovation and the capacity to innovate are among the most important factors that affect an organizations competitiveness and performance. • SMEs due their small size, limited managerial capabilities, as well as limited resources do face a challenging task in innovating. • SMEs as compared to larger firms are weakly structured in innovation, low market power and scarcity of resources in order to appropriate the benefit of their innovation.

• It is not surprising then, that SMEs in developing countries have been labeled as imitators rather than innovators. • The situation is however different in developed countries such as the United States of America

Small entrepreneurial firms (since WWII) are: •...
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