THE success and failure of an economy is often romanticised by the global brands that it creates — Apple of the United States, Shell of Europe, Toyota of Japan and the Samsung of South Korea.
However, the unsung heroes of any thriving global economic powerhouse are the small and medium enterprises (SMEs) that often form the biggest chunk of the economy.
In most countries, SMEs form a round 90 percent of the population of companies. In Malaysia, the figure stands at around 98 per cent.
The SME economy is important for a few reasons. Firstly, they form the backbone of the value chain that supports larger corporations. Secondly, they provide the playing field for creativity, innovation and business potential.
Out of the 900,000 SMEs registered in Malaysia, more than three quarters are micro businesses while only two per cent form medium enterprises.
In 2016, SMEs contributed 36.6 per cent to the nation’s gross domestic product.
It is important that SMEs are given the attention and development space. They must also adopt new technology to stay relevant and competitive.
The Malaysian economy is highly diversified, which includes deep rooted cultural heritage that has spurred cottage industries like the manufacturing of batik, silk and handicrafts.
While there is local sentiment to preserve the cottage industries, it also has export potential.
The model to ensure the sustainability of our cottage industries needs to be updated. To stay relevant, value-added activities must be added to promote the products and improve quality.
Marketing, sales, accounting, training and crafting can be improved through the usage of new technologies, made possible by automation, cloud-based technology and the Internet of Things (IoT).
Many technologies have been created for use in the automotive industry, as discussed extensively in this column. They include IoT based enterprise planning and accounting software, camera vision, or broad-based financial technology software — all with immediate spin off for the utility of other sectors.
The barriers in spurring international market awareness and exportability of such products can be reduced as technology adoption becomes more affordable, particular for the SMEs
It is for this reason that the Malaysia Automotive, Robotics and IoT Institute launched the Technopreneur Development Programme (TDP) last week, in conjunction with the Malaysia Autoshow 2019 Sabah.
The TDP is structured to provide SMEs with the requisite knowledge and digital tools to enhance business operations, with the end goal of establishing an ecosystem revolving technology, that is fully utilised by SMEs on a shared common platform and engineered by MARii and its partners
The pilot programme, starting with 10 companies within the cottage industry in Sabah, was developed in partnership with Fintech Lab to allow SME business owners to reduce administrative burdens through the adoption of applicable technology, increasing value-added activities that can enhancing company operations
In the future, more companies will join the TDP, covering more sectors and areas as a spin off from technology applications within the automotive and overall mobility industry.
While there are numerous efforts from many parties to enhance the SME sector, these spinoffs are ready to be applied and adopted for SMEs to enhance their productivity, quality, and exportability of our rich heritage.
The writer is the chief executive officer of the Malaysia Automotive, Robotics and IoT Institute (MARii).