Providing continued support to small- and medium-sized enterprises (SMEs) are part and parcel of any association — in the case of the SME Association of Malaysia (SAMENTA), its ongoing push to divert funds for start-ups to SMEs is a logical one.
SAMENTA is lobbying for this right now as the mid-term review of the 12th Malaysia Plan is underway.
“While we can understand the government’s obsession with start-ups, some of these funds and intervention may bear better fruit if they are funnelled to high growth and impactful SMEs,” said William Ng, President, SAMENTA.
With the necessary funding and interventions, Ng believes export-ready SMEs can receive better facilitation with any allocated funds from the government. This includes getting the right support for market linkages, brand building, and packaging design.
Any funding support can also be paired with venture funds and government-linked corporations to co-finance SMEs that are looking at merger and acquisition activities.
“This will ensure the supply chains are better integrated and will enable SMEs with sufficient size to compete regionally and globally. (After all,) established SMEs are not only less risky investments, but also have stronger footing in global supply chains,” Ng added.
Start-ups, in comparison, are riskier due to their instability and unknown future affiliations. According to Ng, there have been many examples where start-ups receive support from the government and, later on, see these growth engines be sold to larger regional players or have their main operations move overseas due to better incentives.
“Given the increased significance of SMEs as part of the ecosystem of every piece for the new economic narrative, we urge the government to think beyond the ‘World Economic Forum hype’ and focus on turning our SMEs into the next unicorns or quasi-unicorns like MyNews, Top Glove, Inari, and Vitrox — all of whom started off as SMEs,” Ng said.
Ng is making primary reference to the Madani Economic Framework as it placed emphasis on supporting SMEs. While there is a clear plan to enable and empower SMEs, there is only start-up support at this point.
For Ng, the government of the day made the right moves to support high growth and value-add industries as the spill-over will positively impact SMEs that are operating on the supply chain. This includes SMEs that operate as OEM producers who, with the right interventions, can become proper brand owners when they create their own branding and packaging.
On the 12th Malaysia Plan mid-term review, SAMENTA lauded the changes so far and believes the course corrections are necessary for the economy to grow.