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How SMEs can leverage Technology to overcome economic challenges and stay competitive
 

How SMEs can leverage Technology to overcome economic challenges and stay competitive

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Teh Kee Sin

Teh Kee Sin
President , SME Association of South Johor, Johor

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    How SMEs can leverage Technology to overcome economic challenges and stay competitive How SMEs can leverage Technology to overcome economic challenges and stay competitive Presentation Transcript

    • Teh Kee Sin President SME Association of South Johor, Johor How SMEs can leverage Technology to overcome economic challenges and stay competitive
    • Teh Kee Sin (MBA, Demonfort UK)
      • 1. SM E Association of Johor Selatan, President
      • 2. SM E Association of Malaysia, Vice President
      • 3. Johor Bahru Chinese Chamber of Commerce & Industry (JBCCCI),
      • Committee Chairman of SME & HRM (2003- April 2009)
      • 4 . Johor CCCI, Committee Chairman of SME & HRM
      • (2003 – April 2009)
      • 5. ACCCIM, Committee Member of SME & HRM (2003 – April 2009)
    • IBM Confidential In tandem with global market conditions, Malaysia is expected to experience lower growth rates in 2009
      • First Quarter 2009 – Contracted 6.2% (BNM)
      • 2009 GDP growth estimated to be -4% to 5% (MIDA)
      • Total FDI in 2008 estimated to be US$6.6bil but expected to plunge to only US$1.1bil in 2009 (EIU).
      • Inflation for 2009 is forecasted to be 3.5%. (BNM)
      • Unemployment rate forecast for 2009 : 4.5% (MIER)
      • Malaysia is increasingly feeling the impact of the global economic crisis
      • Total exports in December 08 dropped 14.9% compared to a year ago and expected to be on a downward decline in the Q1 of 2009 (manufacturing – 17.6%)
      • However, for full year 2008, Malaysia’s external trade balance posted a surplus of RM142.0 billion (US$39 billion), surged 41.5% compared to last year. Total exports increased by 9.6% to RM663.5 billion (US$182 billion)
      • Malaysia’s top ten trading partners were Singapore, the USA, Japan, China, Thailand, Korea, Indonesia, Hong Kong, Taiwan, and Germany. These countries accounted for 71% of Malaysia’s total trade in 2008.
      Economic Trends Country Data and Trends Source: Dept of Statistics Malaysia, MIER Source: Economist Intelligence Unit GDP Growth (%) Export Growth (%), 2008 Y-o-Y Source: DOS, CEIS (Extracted from CIMB Research Report dated 13 February 2009)
    • Overview on SMEs
      • In Malaysia, there are 556,000 SMEs (99.2% registered company). More than 90% of SMEs are in manufacturing. The development of SMEs is at the forefront of the nation’s thrust towards achieving industrialized country status.
      • SMEs contributed 32% of the country’s GDP in 2008 and target to increase to 37% in 2010.
      • 56% - Employment (6 million) & 19% - Export
      • Malaysia is also the 21st largest trading nation in the world. 76.2% of Malaysian exports are manufactured goods.
      • Export activities would continue to be a key strategy for the Malaysian manufacturing sector and national economy.
      • To improve our competitiveness outside of Malaysia, SMEs must leverage IT to grow
    • 435,324 (78.7%) 100,333 (18.2%) 12,610 (2.3%) 4,537 (0.8%) Source: Census of Establishments & Enterprises 2005 – Profile of SMEs
      • Total establishments = 556,804
      • No. of SMEs = 551,267 (99.2%)
      TOTAL ESTABLISHMENTS BY SIZE MICRO SMALL MEDIUM LARGE
      • Challenges for SMEs are greater due to :
        • Fundamentally lack of resources
        • Ability
        • Limited market access
        • Lack of R&D and technology capacity
      • SMEs will have greater flexibility and adaptability in their operating structure, if they have knowledge-driven entrepreneurs investing and understand new technologies.
      Key Challenges
        • Greatest impact from implementing ICT
          • Building and managing customer relationship,
          • Managing suppliers and improvement in strategic management (decision making process and better financial control, greater efficiency in operations leading to improved business flow);
          • Access to new markets with better branding, prompt delivery
          • Higher employee productivity and improved communications.
      • Source : SME Annual Report 2007, published by the National SME Development Council,
      Opportunity
    • TAP ON THE STIMULUS PACKAGES FOR SMEs 1.Working Capital Guarantee Scheme (WCGS) – 5 billion 2.Industry Restructure Loan Guarantee Scheme (IRLGS) - 5 billion RM2billion RM60 billion SME Assistance Guarantee Scheme (SAGS) RM7billion 2 nd Stimulus Package (8 th Mac 2009) Special Assistance (3 rd Feb 2009) 1 st Stimulus Package (Nov ’08)
    • Roles :
      • Government
      • Financial Institutions
      • SMEs
      • NGO / Trade Association
    • How can Manufacturing be smarter?
      • Creating an infrastructure that drives down costs, is intelligent and secure in a dynamic business climate
      • Maintaining continuous business operations while rapidly adapting and responding to risks and opportunities with an integrated infrastructure.
      • Leadership virtualization and consolidation solutions that reduce cost, improve asset utilization, and speed provisioning of new services.
      • Understand, manage & response to customers’ expectations, develop sustainability strategies aligned with overall business strategy.
      • Use fewer resources in the creation of products and ensure that the products are environmentally friendly. Avoid the costly disposal of environmentally harmful byproducts
        • The fundamental effort towards innovation must start with a change in SMEs mindset and organisation culture.
        • SMEs should be more active and aggressive in seeking and securing new knowledge, especially knowledge that would help them to manage resources effectively and efficiently.
        • Continuous technology enhancement has to be carried out to further improve operation capabilities and business opportunities.
      Conclusion - How SMEs can leverage Technology to overcome economic challenges and stay competitive
    • Thank You www.smejs.org