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

Published in Technology , Economy & Finance
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  • 1. Teh Kee Sin President SME Association of South Johor, Johor How SMEs can leverage Technology to overcome economic challenges and stay competitive
  • 2. 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)
  • 3. 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)
  • 4. 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
  • 5. 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
  • 6.
    • 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
  • 7.
      • 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
  • 8. 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)
  • 9. Roles :
    • Government
    • Financial Institutions
    • SMEs
    • NGO / Trade Association
  • 10. 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
  • 11.
      • 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
  • 12. Thank You www.smejs.org