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SMEs urged to embrace technology to expand and compete globally PDF Print E-mail

By Daljit Dhesi, The Star

June 19, 2010

 

AT the recent United States-India Business Council’s 35th anniversary in Washington, DC, India’s External Affairs Minister S. M. Krishna said: “The 20th century was a century of capital accumulation; the 21st century will be the century of innovation.”

This could not be more true and Malaysian small and medium enterprises (SMEs) must take note of this. Technology breeds innovation and without it a company will not be able to expand and compete globally.

sme corp ceo

"SMEs need to recognise that innovation is a continous and long-running process" SME CORP CEO DATUK HAFSAH HASHIM

The Government’s move to transform Malaysia into a knowledge-based and high-income economy will not be possible without creativity and innovation.

Both are catalysts that will drive the growth of businesses, including SMEs. Many information and communications technology (ICT) companies agree that technology is a vital platform that will allow companies to adopt and strive for innovation.

The importance of innovation can be seen in the 10th Malaysia Plan which, among others, places strong emphasis on innovation and technology to drive the country’s growth.

A recent survey by SME Corp Malaysia reveals that SMEs are upbeat about the current business environment and expect better sales this year.

In the first quarter this year, SMEs expanded by 13% year-on-year in terms of sales growth based on 3,264 respondents surveyed.

The survey indicates that SMEs expect a 20% growth in the second quarter and their businesses to recover fully from the financial crisis by the second half of the year.

Despite the eurozone debt crisis, analysts opine that Malaysian businesses will see improvements this year on the back of global economic recovery.

They agree that innovation is an important tool for businesses to leapfrog into the overseas markets by helping to differentiate products, enhance quality, reduce costs and boost earnings over the longer term.

IC Microsystems Sdn Bhd (ICmic) president and chief executive officer Abd Rashid Munir says technology is an enabler for creativity and innovation. Without it, he says, SMEs will not be able to produce competitive products globally.

He says innovation creates products that can compete and are cost effective. But Rashid says companies must first acquire technology in order to innovate.

abd rashid munir

Abd Rashid Munir...‘Technology is an enabler for creativity and innovation. Without it, SMEs will not be able to produce competitive products globally.’

ICmic recently bagged the top inaugural SME Innovation Award at the SME Innovation Showcase – Smidex 2010. The June 1-3 event was organised by SME Corp and the Malaysian Industry-Government Group for High Technology.

Rashid says with technology and innovation working in parallel, SMEs will be able to strategise their business plans to serve customers more efficiently and effectively.

Compared with other Asian countries, he says Malaysia still lacks in this area and that there is room for improvement.

He says SMEs in advanced countries are major contributors in terms of income generation, job creation and innovation for major conglomerates.

He believes SMEs can also be successful if they do not shy away from technology.

While agreeing that funding is vital for the development of SMEs, Rashid believes competency and human resource are equally important for start-ups.

“Once a company has the competency and the human resource or expertise, it will be easier to obtain funding, either grants, bank loans or through venture capital. There are other intangible things which can help SMEs in their businesses, including seeking the right information from the right ministry or agencies,” he says.

SME Corp CEO Datuk Hafsah Hashim feels that SMEs need to recognise that innovation is a continuous and long-running process.

She says events like Smidex 2010 will not only allow innovative Malaysian companies to be more visible, but also to provide a platform to exchange and share experiences, best practices and strategies, to compete in a globally-competitive market.

She says the challenge will be in the ability to grasp the significance of this open market and capitalise on innovation to ensure that local companies can compete and sustain their businesses.