Malaysia’s Experience with the Small and Medium Sized Enterprises Masterplan : Lessons Learned
Productivity-enhancing measures play a pivotal role in Malaysia’s aspirations of becoming a high-income economy. Malaysia has enjoyed an impressive growth performance over the past few decades, with growth rates of at least 7 percent per year for m...
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| Language: | English |
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World Bank, Malaysia
2020
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| Online Access: | http://documents.worldbank.org/curated/en/504361583989615623/Malaysia-s-Experience-with-the-Small-and-Medium-Sized-Enterprises-Masterplan-Lessons-Learned http://hdl.handle.net/10986/33437 |
| Summary: | Productivity-enhancing measures play a
pivotal role in Malaysia’s aspirations of becoming a
high-income economy. Malaysia has enjoyed an impressive
growth performance over the past few decades, with growth
rates of at least 7 percent per year for more than 25
consecutive years. However, with the rise of other emerging
economies, notably China and India, Malaysia has faced
challenges in pivoting away from a ‘low-cost, high-volume’
strategy towards a ‘high-value’ one. Small and medium-sized
enterprises (SMEs) are a crucial component of Malaysia’s
strategy to become a high-income nation. As SMEs account for
all but 1.5 percent of firms and the bulk of production and
employment, they are central to Malaysia’s objective of
becoming a high-income economy. SMEs form the bedrock of the
private sector and innovation and can contribute to growth
by supplying multinationals or accessing international
markets directly. Despite their critical importance, the
share of Malaysian SMEs in GDP (32 percent) and total
exports (16 percent) was far lower than competitors in 2010.
At the time of preparation of the Masterplan, the export
share was more than 20 percent lower than that in countries
such as the Philippines, Hong Kong, Taiwan and even the US,
and there was also scope for greater sectoral and
geographical diversification. It was recognized that
specific policies to enable favorable conditions for SMEs to
flourish were needed so that they can easily expand into
fast-growing markets and increase the production of
knowledge- and innovation-based products and services. |
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