SMEs must reassess business model, recognise value proposition — MITI
03 Sep 2020
Companies, particularly Small and Medium Enterprises (SMEs), need to reassess their current business model, identify target market, as well as recognise their value proposition including mode of delivering product or services during the COVID-19 pandemic, said the Ministry of International Trade and Industry (MITI).
Its Deputy Secretary-General (Industry) Datuk Seri Norazman Ayob said: “Organisations or business entities should start by questioning; if the next pandemic or crisis were to strike, how would it impact me or my organisation, and what type of strategy including digital transformation should I undertake to stay resilient and sustainable.
“SMEs play an important role in our economy, however, their awareness on adopting Industry 4.0 technologies are relatively low,” he said during the Standard Chartered Live Webcast on ‘Malaysia – At the Heart of Digitalisation’.
Norazman added: “To put it in perspective, let’s say there are two group of companies, the first group believes digitalisation is an important feature so as to be competitive, while the other group comprising mostly SMEs think that digitalisation is nice to have.
“This is where we need to change the mindset of the SMEs — that digitalisation is no longer nice to have…it is a necessity,” he stressed.
Meanwhile, Malaysia Digital Economy Corporation chief strategy officer Datuk Fadzli Shah Anuar said SMEs are the key component in the economy and its importance cannot be disputed as the sector accounted for 98.5 per cent of all business establishments in Malaysia, not even counting those that are not registered.
Citing statistics, Fadzli said the SMEs, of which 90 per cent are in the services sector, contributed just over one-third of the country’s gross domestic product and accounted for two-thirds of the total employment.
“Technologies are expensive, I think it’s very hard to find very basic transformational technologies that are affordable, it is actually a very big challenge. When things are expensive and you don’t have enough money to pay the bills while keeping your workers on the payroll, even without COVID-19, how can we expect 98.5 per cent of our businesses to go digital tomorrow?” Fadzli asked.
“We are not really worried about the larger companies, they will invest in the economy with the right kind of technology and get to the right form, but the SMEs need more guidance…their awareness level is still very low,” he said.