Johannesburg: Delegates from around the world attending a small business conference held in the city praised a long-term plan by the Malaysian government to assist small businesses, with members from South African business associations holding up the plan as a model that the country could learn from.
Speaking today at the International Small Business Congress (ISBC) held at the Sandton Convention Centre, Hafsah Hashim, chief executive of the Malaysian government’s small business support agency SME Corp, detailed the country’s SME Masterplan 2012-2020, which puts various targets in place to be achieved by 2020 in developing small businesses.
SME Corp is the Malaysian government’s small business development agency. The SME Masterplan, launched in July last year, is based on putting in place public-private partnerships involving interaction between ministeries and think tanks as well as with business chambers and associations. Formulated in partnership with the World Bank, the plan is outcome-based and focuses on productive sectors and boosting innovation. It also allows targets and programmes to be tweaked at any time.
The plan aims to increase the number of small businesses overall, expand the number of high-growth and innovative firms by 10% a year, almost double small firms’ productivity and ensure more register so as to take advantage of support, funding and other measures.
It chiefly aims to achieve several targets by 2020, these include: lifting the contribution of small businesses from 32% of GDP to 41% of GDP; increasing their contribution to employment from 59% of the workforce to 61%; lifting their contribution to exports from 19% to 25% and ensuring that registered firms move from 69% to 85% of all firms.
The plan focuses on six key areas, with the aim of making small enterprises competitive across all sectors, namely: innovation and technology, access to finance, improvement of human capital, increasing access to markets, infrastructure,
Importantly the plan hinges on the collection of reliable statistics on SMEs through a regular SME census, monitoring of support programmes, ensuring effective co-ordination and delivering effective business services.
“We believe in the principle that what you can’t measure you can’t plan,” said Hashim. She pointed out that governments carrying out similar plans should connect, communicate and collaborate with the private sector to ensure that the private sector owns the plan.
A key cornerstone to the new plan is the SME Competitive Rating for Enhancement (SCORE) diagnostic tool, which helps to measure small firms in various areas of competencies – including management, quality, performance and technical capability, and thereafter based on the outcome of the rating, refer them to appropriate programmes to enhance their capability.
Between 2011 and this year, Malaysia has improved in the overall World Economic Forum (WEF) ratings moving from 16 to 14. In the Doing Business rankings for the time it takes to start a business Malaysia has moved from 111th to 50th position in starting a business over the same period.
Hashim said Malaysia had learned from the example of Nordic countries, such that it now took those in Malaysia just one hour to register a business. Worldwide small businesses represented 90% of all firms, contributed 60% of employment and 50% of gross domestic product (GDP), she said.
She said while micro enterprises balanced growth – particularly as they make up 80% of all firms, medium-sized firms drove of growth, innovation and competitiveness while acting as enablers of growth together with small-sized firms.