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MGM 4136

MGM 4136. GROUP 9 GROUP MEMBERS: AZEIL B. MOHD KHALID 120798 IZZAT SYAZNI B. ABD. GHANI 120885 SITI NORHANISAH BT. SARAF 116653 CARLSON JULLIAN S07280 DANNY GELIMAI S07297. SMI/E’s IN MALAYSIA :. CAN SMI/E’s CONTRIBUTE TO ECONOMICS GROWTH IN MALAYSIA ??. Contents.

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MGM 4136

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  1. MGM 4136 GROUP 9 GROUP MEMBERS: AZEIL B. MOHD KHALID 120798 IZZAT SYAZNI B. ABD. GHANI 120885 SITI NORHANISAH BT. SARAF 116653 CARLSON JULLIAN S07280 DANNY GELIMAI S07297

  2. SMI/E’s IN MALAYSIA : CAN SMI/E’s CONTRIBUTE TO ECONOMICS GROWTH IN MALAYSIA ??

  3. Contents • INTRODUCTION • REVIEW • ANALYSIS • RECOMMENDATION • CONCLUSION

  4. Chapter 1

  5. INTRODUCTION • SMI’s is define as Small and Medium Industries while SME’s means Small and Medium (Scale) Enterprises. • Without industries, no enterprises will exist. Without enterprises (firm), industries won’t developed. • Initially started in 1971 under the New Economic Policy (NEP). • The main thrust was to uplift the economic status of the Bumiputras Malaysians. • Becomes vital under the New National Development Plan (NNDP) which cover the period of 1991-2010.

  6. Small and Medium Industries/Enterprises (SMI/E’s) have been recognized in creating employment Opportunities, maintaining social equality and price to growth. • In Malaysia, SME’s currently account for more than 90% of firm in the manufacturing sector. • Collectively provide and enhance the production of goods and services in the national economy (hashim,1999). • Globally, SMI’s account for an increasing amount of the world trade. It was estimated that SMI’s were about 20%-25% of the total world trade (World Bank, 2003).

  7. Chapter 2

  8. REVIEWS • Presently, there is no common definition of SMI/E’s in Malaysia. Different agencies define SMI/E’s based on their own criteria. • Small and Medium Industries Development Corporations (SMIDEC), a government based agencies come up with a consensus of approved SMI/E’s definition based on the number of full-time employees and annual return.

  9. Summaries of approved SME definitions based on full-time employees :

  10. SMI/E’s sectors in Malaysia ; SMI/E are established in these following sectors ; • Agricultural • Basic raw materials • General business • Manufacturing Of these four, manufacturing sectors is the most important sectors since it involved the activity of converting raw materials to useful products. Its contribute significantly in terms of business units, employments opportunities and economic outputs. (Hashim and Wafa, 2002) • Out of 20,455 establishments in the manufacturing sector, 18,271 or 89.8 per cent are SMEs.

  11. Distribution of Manufacturing Companies by Location, 2003(% share)

  12. DISTRIBUTION OF SME’s BY SIZE IN THE MANUFACTURING SECTOR

  13. DISTRIBUTION COMPANIES IN THE MANUFACTURINGSECTOR

  14. Manufacturing Output of SMI’s by Sector (% share)

  15. Government agencies involved in assisting SMI/E’s in Malaysia • There are 13 ministries and 35 institutions/ agencies that provide helps and assistances to SME’s in Malaysia. • Divided into 6 broad functions that is ; a) financial & credits assistance b) entrepreneurial & managerial training c) technical &vocational training d) extension & advisory services e) marketing & market research f) infrastructure facilities

  16. Problems of SMI/E’s in Malaysia • Emerging technologies. • Increasing numbers of competitors. • Changes in the conduct of operations. • Capacity building – quality & speed to market. • Education level.

  17. Malaysian SMI/E’s vs. Global Market. • Market liberations • Increasing security concern. • Global insight

  18. Chapter 3

  19. Analysis • Market • Entrepreneurs orientation. • Policy

  20. 1.Market

  21. SMEs PROPORTION OF PRODUCTION SOLD BY MARKET

  22. MAJOR EXPORT MARKET BY DESTINATION (NUMBER OF SMEs)

  23. 2. Entrepreneur orientation • Level of education • Marital status • Race • Sex • Age • Type of ownership

  24. Demographic characteristic of Malaysian SMI’s Characteristics Percent i.Highest Level of Education: Primary School 33.7 Lower Secondary School 39.1 Upper Secondary School 19.9 University 7.3 ii.Marital Status: Married 85.4 Single 6.6 Divorced/separated/deceased 7.9 iii.Race: Malay 64.9 Chinese 11.3 Indian 23.8 Eurasian - Others - iv.Sex: Male 75.5 Female 24.5 v. Age (years): 21-30 8.6 31-40 27.2 41-50 37.7 51-60 17.9 >60 8.6

  25. Ownership of the SME’s

  26. Level of education : revised

  27. POLICY • Under our new Prime Minister reign, the government now is revitalizing the Agricultural sector and stimulating the Micro-enterprises. Thus, shifting national SMI/E’s policy. • The establishment of National SMI Development council (SMIDEC) provide strategic directions for the sector to become a significant contributors to endogenous (agricultural) growth and economic as a whole.

  28. Product and Process Improvement Grant: Approvals by Sector

  29. Supporting services to facilitate the execution of SCM and just-in time production are critical to the outsourcing process • haulage and transportation services and software applications • long term competitive advantage - creation of a culture of innovation based on increased spending in R&D

  30. Cognizant of the impact of the ICT revolution - Multimedia Super Corridor (MSC) and the establishment of the Multimedia Development Corporation • National SME Development Council chaired by the Prime Minister will formulate policies and coordinate SME development programs between ministries and agencies.

  31. Market Development Grant: Approvals by Sector

  32. Productivity and Quality Improvement & Certification Grant: Approvals by Sector

  33. Grant allocation for R&D under Eight-Malaysian Plan

  34. Distribution of Grant and Loan by Value of Approvals (% share)

  35. Continue……… • ITAF 1 : Business planning and development Grant. • ITAF 2 : Product and Process development Grant • ITAF 3 : Productivity and Quality Improvement and Certification Grant • MDG : Market Development Grant • SLSME : Soft Loan for Small and Medium Enterprise.

  36. Chapter 4

  37. RECOMMONDATION • Bridging the IT gap. • Allocating resource equally. • Encourage more generation Y’s people to participate in SMI/E’s. • Governments roles. • Global reviews. • Innovation and R&D Supports. • Award & Recognitions.

  38. Chapter 5

  39. CONCLUSION From our readings and research, we have found out that SMI/E’s in Malaysia generally facing two major problem. That is; a) Government support and helps agencies are mainly located in the urban area such as the Capital City of a country. Their regional branch and network are limited. b) Not effectively integrated into the Main-Stream of Malaysia industrialization and their linkages remain weak as ever.

  40. CAN SMI/E’s CONTRIBUTE TO OUR COUNTRY ECONOMIC GROWTH??? ...YES...

  41. WHY ??? • SMI/E’s accounts for almost 89% of Malaysia total economic growth (in manufacturing sectors only). • The shifting from manufacturing into agricultural and agro-based policy is a long-term prospect for Malaysia to keep its competitive advantage in global markets.

  42. THANK YOU ANY QUESTION???

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