Realigning Malaysian SMEs to the New Economic Model & 10th Master Plan - Chai Sen Hong

SME CorporationMalaysia 2

SME Corp. Malaysia• Established under the Small and Medium Enterprises Corporation Malaysia Act 1995 [ACT 539] on 2 October 2009• Formerly known as the Small and Medium Industries Development Corporation (SMIDEC)• A single dedicated agency to formulate overall policies and strategies for SMEs and to coordinate programmes across all related Ministries and Agencies• The central point of reference for information and advisory services for all SMEs in Malaysia 3

Vision & Mission Vision The premier organization for the development of progressive SMEs toenhance wealth creation and social well- being of the nation Mission Promote the development of competitive, innovative and resilient SMEs through effective coordination and provision of business support 4

Corporate Structure CEO CORP COMM CEO’s OFFICE AUDIT STU DEVELOPMENT & COORDINATION SUPPORT IMPLEMENTATION INTERNATIONAL SECRETARIAT BUSINESS CORPORATE INFORMATION POLICY & PROGRAM BUSINESS STATE OFFICES ADVISORY & MANAGEMENT TECHNOLOGYECONOMY COORDINATION DEVELOPMENT SUPPORT KEDAH / POLICY HR & ORG ICT APP PERLIS NSDC BAP & E2 PLANNING DEVELOPMENT PLANNING & BUSINESS DEVELOPMENT PULAU DEVELOPMENT PINANG *PROGRAMME **BUSINESS FINANCE STATISTICS MANAGEMENT ADVISORY MANAGEMENT PERAK INFRA, NETWO CEDU RK & SECURITY N SEMBILANECONOMICS MACRO SCORE MANAGEMENT ANALYSIS SUPPORT*** BUSINESS INNOVATION MELAKA ORC LEGAL JOHOR PAHANG MONITORING TERENGGANU KELANTAN SARAWAK SABAH 5

Roles of SME Corp. Malaysia EXPANDED ROLE PREVIOUS ROLESECRETARIAT TO MANAGEMENT OF “ONE REFERRAL BUSINESS THE NATIONAL POLICY COORDINATION DATA, INFORMATION CENTRE “ ON DEVELOPMENT SME & PROGRAMME DISSEMINATION & INFORMATION SUPPORT DEVELOPMENT IMPLEMENTATION RESEARCH ON SMES & ADVISORY PROGRAMMES COUNCIL CURRENT ROLES & FUNCTIONS OF SME CORP. MALAYSIA

Profile ofSMEs in Malaysia 7

SMEs are the Backbone of the Economy• SMEs account for a large proportion of businesses in Malaysia: - 99.2% of establishments (548,267) - Majority are micro enterprises, with 5 workers and less Important domestic source of growth Foundation & support in supply chain through forward & backward linkages Balanced growth Strengthen resilience of the nations economy Provide support to growth of new & existing areas Promote private sector-led growth 8 Source: Census of Establishments & Enterprises 2005

Currently, SMEs are mainly in Services Sector• Services: 87% share, largest subsector is distributive trade• Manufacturing: 7% share, mainly in textiles/apparels and F&B industries• Agriculture: 6% share, plantation/horticulture and fishing Manufacturing Plantation and horticulture Agriculture (7.2 %) (65.6%) (6.2 %) Fishery and its services activities (20.8%)Textiles & Apparels Poultry farming (7%)(23.4%)Food & Beverages (15%)Metal & metal products(13%) Services Wholesale & Retail (55.5%) (86.6 %) Restaurant & Hotel (15.2%) Transport & Communication (6.5%) Source: Census of Establishments & Enterprises 2005 9

Performance of SMEs Outpaced the Overall Economy SME growth outperformed overall economy for the period 2005 – 2009 mainly due to supporting policy initiatives such as: • Establishment of NSDC in 2004; and • Other supportive policies (PEMUDAH, Visit Malaysia Year, Government salary increment, RMK9 projects) GDP Annual Growth (2000 price) GDP & SME Growth SME Contribution to: GDP 31.2% Employment 56.4% Exports 19% 10

Major Challenges Faced by SMEsAccess to Finance  Difficulty in obtaining financing resulting in reliance on informal sector  Reliance on collateral-based lending  Perceived higher risk for SME lending  High interest rates Access to market  Limited marketing & promotion strategies  Limited access to domestic & global markets  Lack of international certification for export and costly certification process  Limited use of e-commerce and internet marketing 11

Major Challenges Faced by SMEsAccess to Advisory Services and Information  Limited access to advisory servicesAccess to Technology and Innovation  Management and technology capability constraint  Low value add and not competitive – low adoption of technology  Limited capability in R&D and technologyAccess to Human Capital and HC Development Difficulty in retaining manpower Inadequate training and inadequate budget for training 12

Initiatives for 2011 13

Business Accelerator Programme (BAP)This programme enables SMEs to be assisted through an integrated approach with guidance, including strengthening their core business, building capacity and capability, and facilitating access to financing.Applicants will receive business and technical advisory services, aimed at enhancing their business potential 14

PROGRAMME-BASED APPROACH Programme-based approach BAP E² DYNAMIC, COMPETITIVE & RESILIENT SMEs 15

PROGRAMME-BASED APPROACH (CONT.)Diagnose and identifystrengths & weaknesses ofSMEsBusiness advisory and BAP SMEs 2-starrecommend action plan to (SCORE) andSMEs aboveCapacity building E² Micro EnterprisesProvide and facilitate financial of level 3(M-CORE)support In collaboration with Bank Rakyat 16 In collaboration with SME Bank

Components of BAP • SME Competitiveness Rating for Enhancement (SCORE) A diagnostic tool used to rate and enhance competitivenessDiagnostics Programme of SMEs based on their performance and capabilities • Skill Upgrading Short-term courses are provided under the 40 training centres that have been appointed by SME Corp. MalaysiaCapacity • Brand Awareness Building Entrepreneurship TrainingAdvisory & • One Referral Centre (ORC) Provide advisory services for start-up as well as Technical established business by Business Counselors and SME Support Expert Advisory Panel (SEAP) • Providing advisory services related to access to financing provided by variousFacilitating financial institutionsAccess toFinancing 18

Enrichment & Enhancement Programme (E2) This programme enables Micro Enterprises (MEs) to be assisted through an integrated approach with guidance, including strengthening their core business, building capacity and capability, andfacilitating access to financing. Applicants will receive business and technical advisory services, aimed at enhancing their business potential 19

Components of E2 • Micro Enterprise Competitiveness Rating for Enhancement (M-CORE)Diagnostics Programme A diagnostic tool used to rate and enhance competitiveness of MEs based on their performance and capabilities • Skill Upgrading Short-term courses are provided under the 40 training centres that have been appointed by SME Corp. MalaysiaCapacity • Brand Awareness Building Entrepreneurship TrainingAdvisory & • One Referral Centre (ORC) Provide advisory services for start-up as well as Technical established business by Business Counselors and SME Support Expert Advisory Panel (SEAP) • Providing advisory services related to access to financing provided by variousFacilitating financial institutionsAccess toFinancing 21

One Referral Centre (ORC) Business Advisory SME Registry Membership Info Centre ONEVirtual ORC REFERRAL Link of CENTRE Ministries/ Agencies Towards producing national, regional and global champions Product Gallery Pocket Talk Resource Centre 23 23

One Referral Centre (ORC) BUSINESS ADVISORY - Business Counselor - SEAP Experts INFO CENTRE Centralized Call Centre consists of : Info Line, Info Email, General Line ORC LINK Referral Counter for Ministries, Agencies, Banks & DFIsTowards producing national, regional and global champions RESOURCE CENTRE - Library - Business Centre : Photostat, printing, etc - Touch screen kiosk + Internet Kiosk 24 24

One Referral Centre (ORC) POCKET TALK - Talk from SME Corp. -Talk from other Ministries, Agencies, Banks, DFIs - Company presentation - Book Launch/ Review PRODUCT GALLERY Showcase of products by Industry/sector cluster - Thematic showcase - Events/ programme VIRTUAL ORCTowards producing national, Corporate Website global champions - SME Corp. regional and - SME Info Portal SME REGISTRY MEMBERSHIP - Membership Card - Enjoy Benefits : current updates & Invitation for events & programmes 25 25

LANDSCAPES FOR ADVISORY SERVICES ACCESS TO BNM, SME CORP, LUCT & SME CORP BRANDING FINANCING BANKS, DFIs, CGC (National Mark) MASB, MIA KPDNKK, MITI, ACCOUNTING SUPPLY SME CORP TRAINING HUMAN SIRIM, JAKIM (MOHR, PSMB, M CERTIFICATION RESOURCE OTOUR) LABOUR (MITI) TAX GST EXPORT MATRADE (MOF), LHDN, MIA FMM, FAMA Pusat Teknologi MARKETING GREEN TECH Hijau Nasional BIOTECHCORP, BUSINESS SME CORP R&D MARDI, SIRIM, (SMIDEX), MATRADE MATCHING UPM, USM (MIHAS & INTRADE), MITI (SDSI) PACKAGING LUCT, SIRIM CONSTRUCTION CIDB LOCAL AUTHORITY BUSINESS MARA, SME LICENSING eg: DBKL PREMISE BANK, MIDF PROPERTY 26

SME Business Counselor BUSINESS COUNSELORS Provide business advisory & business counseling to SMEs focusing on the 5 areas i.e. Management, Human Resource, Financial, Marketing & Production P I L L A R S 27 27

DevelopmentProgrammes forSMEs 28

SME Competitiveness Rating for Enhancement (SCORE)SCORE is a diagnostic tool used to rateand enhance competitiveness of SMEs based on their performance and capabilities 29

About SCORE Identifies strengths and weaknesses of SMEs in order to recommend measures for improvement OBJECTIVES Facilitates linkages of Links export-readypotential SMEs with large companies to MATRADE companies / MNCs 30

SCORE ParametersThe capabilityand performanceare measuredbased on 7parameters thatvary acrosssectors 31

BACKGROUND OF SCORE • a comprehensive diagnostic tool to rate Example of Radar Diagram What is and enhance competitiveness of SMEs based on their performances and for 3-Star company SCORE? capabilities. • developed in August 2007. • identify strengths and weaknesses for Function improvements; and • facilitate linkages. • Business Performance • Technical capability • Financial Capability • Quality SystemParameter • Management Capability • Innovation • Production Capability • 0 – 2 Stars : Very basic business operationCharacteristics • 3 – 5 Stars : Some degree of sophistication Analysis: and can be groomed for export Weak in financial capability Assistance:Implementation • Retail & Distributive Trade • Maintenance, Repair & Require financial management Channel (PUNB) Overhaul (MINDEF) training (Existing • Construction (CIDB) • Professional Services Collaborators) • ICT (MDeC) (PSDC) 32

Background of M-CORE • a comprehensive diagnostic tool to What is enhance competitiveness of Micro Example of Radar Diagram Enterprises for Level 2 Micro Enterprise M-CORE? • developed in Feb 2010 Business Capability • identifies strengths and 3 Functions weaknesses for improvements; 2.5 2 1.5 1 Financial 0.5 Business 0 Capabilities Operations • Business Capabilities; • Financial Capabilities;Parameters • Operations; and Business • Management. Managemen t • Level 1 : Basic business operationsCharacteristics • Level 2 : At average and has a Analysis: potential To measure capabilities of start- • Level 3 : Complete the criteria ups or existing micro enterprise businesses. Proposed •TEKUN •BSN Assistance:Implementation •AGROBANK •AIM To provide hand holding Channel •SME BANK •ICU, JPM assistance 33

Micro-Enterprise (M-CORE) Business Business Business Financial Capability Capability Operation Management• Quality • Marketing • Management • Initial Capital Management Channel Structure • Account Book-• Training • Business • Business keeping• Employee Infrastructure Development • Account • Marketing Strategy Management • Method of • HR Operation/ • ICT adoption Services • Customer Service • Brand 34

The National Mark of Malaysian Brand One of the initiatives under the SME-Brand Development Programme, in collaboration withSIRIM QAS International Sdn. Bhd. to enhance thevisibility of Malaysia products and services in both local and international markets 35

The National Mark of Malaysian Brand Pre-Requisite Criteria • Business incorporated / registered • Operating from legal premises • A minimum 3-STAR rating under SME Certified ISO or equivalent • Own a Registered Brand 36

The National Mark of Malaysian Brand Facilitate companies’ access to on-going local and international trade promotion and A&P Invitation to specific activities by training MATRADE Privileged Media opportunities Coverage organised by SME Corp. Malaysia and its partners Qualifying SMEs would have privileged Special access admittance to SME Benefits passes to MICCI- Corp. Malaysia SME Corp. programmes such as of the Malaysia BAP, Brand Entrepreneurship Programme mentoringconference, SMIDEX and programmes many more 37

Branding Innovation Centre (BIC) SME Corp. Malaysia in collaboration with LimkokwingUniversity of Creative Technology (LUCT) has establishedthe Branding innovation Centre to promote branding to the SMEs in Malaysia and to assist them in building and developing their own brands of products and services aswell as to enhance SME products packaging at this Centre 38

Branding Innovation Centre (BIC) To provide awareness across the country on the importance of innovation branding and packaging on meeting global market needs 39

Branding Innovation Centre (BIC) • A bus has been allocated which operates as the Mobile Gallery to cover four regions in peninsular Malaysia namely North, South, Central and East. • It will be making trips to designated locations toBranding and Packaging hold workshops and Mobile Gallery training sessions for SMEs with branding related collaborators such 40

Innovation Certification for Enterprise Rating and Transformation (1-InnoCERT)A programme to recognise and certify innovative enterprises and SMEs 41

1-InnoCERT To foster and support innovative SMEs and enterprises to be globally innovative and competitive players Facilitated access to financial incentives and Eligible to wider market participate in Eligible forthe Annual SME business Innovation coaching Award Benefits of the Programme 42

1-InnoCERTSMEs will be assessed using 4 maincriteria: I Technology Technology manufacturing ability innovation Ability to develop products using ability Technology Marketing ability II Technology commercialization ability R&D activity index Technology Innovation System Technology Innovation Administration Technology Accumulation System Outcome of Technology III Technology Analysis Ability Competitiveness Progress Technology Technology management result innovation Technological Achievements management (forecasting) ability IV Technology innovation result Management’s innovation ability Ability to respond to changes Manager’s sense of values 43

1-InnoCERT Mechanism Applicant conducts a self-audit using the On-Line Assessment On-Line Assessment Software 1-InnoCERT Auditor conducts on-site audit to On-Site Audit verify innovativeness of company1-InnoCERT Committee The 1-InnoCERT Committee (Chaired by MIGHT) Approval will provide final approval for certification Approved 1-InnoCERT SMEs be awarded withAward of Certification 1-InnoCERT Certification Provisions of Incentives & Exemptions Fast Track Program including accelerated processing. Pre-packaged with 1-InnoCERT Certificate issuance. 44

On-line Innovation Self AssessmentClick To Do Online Innovation Self-Assessment at MIGHT website http://www.might.org.my 45

The Malaysia-Japan Automotive Industry Cooperation (MAJAICO A-1) Initiated under the Malaysia-Japan Economic Partnership Agreement (MJEPA) in July 2006 in order to develop and improve MalaysianAutomotive Industries to become more competitive as global players 46

MAJAICO A-1 To further promote competitiveness within automotive components and parts manufacturing companies for better market expansion OBJECTIVESTo upscale local automotive parts and components manufacturers towards To introduce Kaizen activities higher value-added activities and through implementation of Leanupgrade capacity building, especially Production System (LPS) the SMEs 47

MAJAICO A-1 Receive guidance and advice directly from experts in the automotive industry from Japan to improve on:•INVENTORY AND WORKING CAPITAL REDUCTION•CYCLE TIME REDUCTION•DELIVERY LEAD-TIME REDUCTION•PRODUCTIVITY AND QUALITY IMPROVEMENT•DEFECT REDUCTION•DIE SETUP TIME REDUCTION•MANPOWER REDUCTION•WORK IN PROGRESS (WIP) STOCK REDUCTION•SPACE SAVINGS•LOADING EFFICIENCY 48

Skills Upgrading ProgrammeTo provide short-term courses under 41 training centres appointed by SME Corporation Malaysia 49

Skills Upgrading ProgrammeObjectives Benefits To enhance the skills of To enhance skill and the workforce in order to increase the capabilities of SMEs efficiency, productivity, pin hard and soft skills rofessionalism and capabilities of SMEs 50

Business MatchingIn accelerating SMEs to be resilient and competitive in the global supply chain, Business Matching through the Industrial Linkage Programme (ILP) is implemented to promote competitive SMEs 51

Business Matching To develop competitive and innovative SMEs OBJECTIVES To widen the businessopportunity of SMEs in supplying To encourage SMEs business products and services to large networking with MNCs and companies and Multinational GLCs Companies (MNCs) 52

Business Matching Potential to boost sales and business SMEs will be able opportunity to increase SMEs will increase visibility among understanding onpotential business the requirementspartners, including and criteria large needed to supplycompanies, MNCs to MNCs and GLCs and GLCs Benefits 53

SME Expert Advisory Panel (SEAP) 3-Phase Programme that provides on-siteassistance and transferring technology as well as technical know-how to the SMEs by the industry experts 54

SEAP Undertake diagnostic audit on SMEs to identify weaknesses and strengths for them to undertake remedial measures to enhance their capabilities The essence of the remedial measures SMEs are able to is to improvereceive advice and businessguidance from the practices, producti industry experts on and productivity Benefits of the Programme 55

SEAP • Technology improvement • Production capacity • EngineeringFOCUS OF IMPROVEMENT • Automation • Machinery equipment • Materials technology • Process Improvement • Designing • Financial Management • International Standards • Productivity Improvement • Maintenance • Label & Packaging • Quality Assurance • ICT and Computerization • Business system e.g. logistic, inventory • Lean Production System Management 56

SMIDEX ShowcaseAnnual event for SMEs to exhibit their products and services, and for large skills companies (LSI) and multinational companies (MNCs) to seek potential suppliers among SMEs. The yearly event also provides SMEs with opportunities to network regionally and exchange ideas and information on technology and innovation 57

SMIDEX• Exhibit products and services of Malaysian companies• Discover new market opportunities and technology through meetings with potential customers and suppliers• Forge closer linkages and networking between SMEs and large companies as well as multinational corporations (MNCs)• Exchange and sharing of experiences and know-how on best business practices and strategies• As venue for outsourcing exchange 58

Enterprise 50 (E50) A prestigious award programme that recognisesthe achievements of Malaysia’s enterprising smalland medium companies, which are well positioned for the future. 50 winners are selected from theirfinancial capabilities, operations and management skills, amongst the nominations received 59

E50• To promote a greater pursuit of excellence amongst local enterprises• To encourage and recognise the entrepreneurial spirits in local companies• To establish a platform on which emerging local companies can gain recognition and greater visibility 60

Virtual SME Info Centre 61

Virtual SME Info Centre 62

One Referral Centre Business Advisory INFOLINE Services (BAS) 1-300-30-6000 THANK YOU www.smeinfo.com.my LAMAN WEB SMS for SMEs Info & Other Information www.smecorp.gov.my Send to 15888SMECORP STATUS SMECORP BORANG[Ref. No] [alamat emel] Find us on Facebook SME Corp. Malaysia 63

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Realigning Malaysian SMEs to the New Economic Model & 10th Master Plan - Chai Sen Hong

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Realigning Malaysian SMEs to the New Economic Model & 10th Master Plan - Chai Sen Hong — Presentation Transcript