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Unlocking New Opportunities for SMEs
In the context of Malaysia, Small and Medium Enterprises (SMEs) are critical to the country's economy, playing a significant role in job creation, innovation, and economic growth. SMEs in Malaysia are defined based on criteria set by the National SME Development Council (NSDC), which considers both annual sales turnover and the number of full-time employees.
In Malaysia, SMEs are defined as those with annual sales of less than 50 million Malaysian ringgit. The contribution of SMEs to the country's economy grew by 33.1% in 2014. Kedah is the highest concentration of Bumiputera SME’s in Malaysia and this state has a great potential to improve their socioeconomic level.
Small and medium entrepreneurs (SMEs) in the Malaysian economy, play as an important role and for development in the country (Radam, Abu, & Abdullah, 2008). SMEs in Malaysia contributed 5.2% of National Gross Domestic Product (GDP) growth in 2016, with 36.6% SME’s contribution to the country’s GDP (SME, 2017).
Given that SMEs performance is linked with the domestic demand, Malaysian government is committed towards creating a conducive business environment for Small Medium Enterprise (SME). Furthermore, the job market is squeezed, resulting individual to involve in entrepreneurship (Winifred, 2015). Lately, the world is facing high education unemployment (Zaliza and Mohd, 2014) and government has encouraged them to become an entrepreneur as one of the solutions as the source of income.
“In Malaysia, SMEs are defined as those with annual sales of less than 50 million Malaysian ringgit. ”
SMECorp
Definiton of SME
The Malaysian government's push towards digitalization allows SMEs to adopt digital technologies, improve efficiencies, and expand their market reach. Initiatives like the Malaysia Digital Economy Blueprint (MyDIGITAL) support SMEs in this transition.
The rise of e-commerce offers SMEs a platform to reach a wider audience without significant physical infrastructure. This is especially relevant in a post-pandemic environment where online shopping has surged
Regional Trade Agreements
Malaysia's involvement in trade agreements like the Regional Comprehensive Economic Partnership (RCEP) opens up new markets for SMEs, providing them with opportunities to expand their operations regionally.
Small: Annual Sales Turnover: RM 300,000 to less than RM 15 million
Small: Number of Employees: Between 5 and 75 full-time employees
Medium: Annual Sales Turnover: RM 15 million to not exceeding RM 50 million
Medium: Number of Employees: Between 75 and 200 full-time employees
The rise of e-commerce offers SMEs a platform to reach a wider audience without significant overhead costs, enabling them to compete globally. With access to digital tools, businesses can streamline operations, target specific markets, and enhance customer engagement. This shift reduces the traditional entry barriers, such as high rental fees for physical stores, while providing analytics to optimize marketing strategies. For SMEs, embracing e-commerce broadens their customer base and fosters growth through flexible business models and scalable solutions.
