Want to compete? Prepare for digitalisation, finance minister tells SMEs

Lim Guan Eng addresses a press conference at the Ministry of Finance in Putrajaya January 8, 2019. — Picture by Mukhriz Hazim
Lim Guan Eng addresses a press conference at the Ministry of Finance in Putrajaya January 8, 2019. — Picture by Mukhriz Hazim

KUALA LUMPUR, June 25 — Small and medium enterprises (SMEs) have to be prepared for digitalisation in order to be able to compete effectively in the challenging business environment with the rise of new technology.

Finance Minister Lim Guan Eng said businesses that are unprepared were risked being left behind by its competitors equipped with the right culture and expertise in providing products and services in complex and hyperconnected market.

“Despite its large contribution to the economy, SMEs face a challenging business environment. Introduction of new technology, especially relating to Industry 4.0, is disrupting various SMEs’ model so thoroughly that they have no choice but to change,” said Lim in his opening speech at the Malaysia SME Business Summit, citing that SMEs are expected to contribute up to 41 per cent to the Malaysian gross domestic product (GDP) by 2020.

Citing the International Data Corporation (IDC) 2017 report, Lim said 50 per cent of the Forbes Global 2000 companies will have its business dependent on digitally enhanced products, services and experiences.

“This highlights the fact that digitalisation is an essential ingredient for success, and it would not be too long before digitalisation become ubiquitous in our daily life,” he said.

In support of SMEs moving towards digital transformation, Lim said Putrajaya has launched several programmes and initiatives to help the businesses to make the digital leap.

Among the initiatives include new guarantee scheme worth RM2 billion through SJPP (Syarikat Jaminan Pembiayaan Perniagaan Bhd) to help Malaysian SMEs adapt to industry 4.0, with an additional RM1 billion allocated to life bumiputera SMEs under the RM6.5 billion SJPP guarantee scheme to ease access to loans, as well as other funds such as the RM1 billion Sustainable Development Financing Fund and the RM1 billion Tourism Infrastructure Fund

Lim said the Federal administration had also provided a RM3 billion Industry Digitalisation Transformation Fund to accelerate adoption of new technology among Malaysian companies, and boost support for innovating new fundraising methods such as equity crowdfunding (ECF) and peer-to peer (P2P) financing.

“I encourage all Malaysian SMEs to utilise these funds and make the digital leap as soon as possible.

“The push towards accelerated adoption of Industry 4.0 technology among Malaysian companies, including among SMEs, is part of the government’s initiative to increase Malaysia’s national competitiveness,” he said.

Lim added the nation’s competitiveness has enabled Malaysia to benefit from the ongoing trade war between China and the United States.

He said this was achieved through business relocation as well as trade and investment diversion.

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