Transformation of SMEs towards high-income nation

KUALA LUMPUR: Small and medium enterprises (SMEs) can enhance their competitiveness in domestic and international markets if they undergo business transformation by adopting digitalisation and automation.

SME Association of Malaysia (SME Malaysia) president Ding Hong Sing urged SMEs to move up the value chain by digitalising business processes and implementing factory automation to support the government's economic target of achieving high-income nation status by 2025.

In turn, he hopes the government will deliver on its financial assistance and related grants to SMEs in 2024 to facilitate their technology adoption and export aspirations.

He said this at SME Malaysia's Chinese New Year (CNY) dinner, officiated by Digital Minister Gobind Singh Deo last week.

Ding hopes the new Digital Ministry will assist more SMEs to move into the digital space, including educational programmes on digitalisation in business, as many SME business owners were not familiar with information technology and digital processes.

On the hesitation by SMEs to pay higher wage rates to employees, Ding explained the payment of higher wages could be accomplished only with an associated increase in labour productivity growth underpinned by technology adoption, although he acknowledged these companies had to bear the high cost of investment.

"By employing technology, we are helping our customers with cost savings in the long run, supporting employees with higher wages and ultimately helping Malaysia achieve high-income nation status through higher productivity growth and higher levels of SME exports," he added.

Ding acknowledged that SMEs had faced business challenges since the Covid-19 pandemic and some SMEs had yet to recover strongly but concluded to reassure that business owners could reach their objectives despite the longer timeframe.

CNY dinner organising chairman and youth bureau chairman of SME Malaysia Sam Tsen in his welcome speech encouraged aspiring youth business owners to join SME Malaysia for business mentorship, networking opportunities and resources to help them kick-start their entrepreneurial journey.

"Joining SME Youth means being part of a supportive community that's dedicated to helping you succeed in the business world, nurturing your dreams into reality – guiding you to be the next generation of business leaders," Tsen said.

At the dinner, invitees were treated to a lion dance, cultural and song performances, musical entertainment and lucky draws alongside corporate video screenings by event sponsors.

In his speech, group managing director and chief executive officer of Hong Leong Bank (HLB) Kevin Lam reiterated that the bank would support SMEs by providing innovative financial solutions.

This is given that SMEs were poised to benefit in 2024 from increased foreign direct investment, tourism, infrastructure spending and a RM44 billion loan injection by the government into the MSME market as outlined in the 2024 Budget.

This was the third consecutive year that HLB had been the main sponsor of SME Malaysia's CNY dinner, reflecting the bank's close bond with members of the SME community.

The largest SME association in the country, SME Malaysia was founded in 1995 to provide support, services and solutions to SMEs and to promote the best interests of the SME community.

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