مشارکت بنگاه های کوچک و متوسط در رشد اقتصاد مالزی: یک تجزیه و تحلیل بخشی The Contributions Of Small and Medium Enterprises (SME’s) On Malaysian Economic Growth: A Sectoral Analysis

1 Introduction Small and medium enterprises (SMEs) including microenterprises have played an important role in fostering growth, employment and income, and have been integral to Malaysia’s economic transformation process. SMEs also considered to be the backbone of industrial development in the country and played an important role in fostering growth, employment and income in the past. As in other countries, SMEs in Malaysia are a very heterogeneous group. They involve in activities ranging from petty traders, grocery store operators, medium-sized contract manufacturers supplying parts and components to multinational corporations and, professional services such as software firms or medical researchers selling their services to overseas markets. SMEs are important to the Malaysian economies which comprise 99.2% of total business establishments, and SMEs contribute 32% of Gross Domestic Product (GDP), 59% of employment and 19% of total exports. For the current structure of Malaysian SMEs, 89.2% are in the services sector, followed by manufacturing 5.3% and construction 4.3%. In term of size, microenterprises represent a majority 79% of SMEs. By location, most of the SMEs operate in the Klang Valley 34.5% (Selangor and Federal Territory), followed by Johor 10.8%, Perak 8.3% and Pulau Pinang 7.4%. (Economic Census 2016). The importance of entrepreneurship to the growth of the country’s economy was evidenced by the sheer amount and variety of supporting mechanisms and policies that existed for entrepreneurs, including funding, physical infrastructure and business advisory services. Meeting the Vision 2020 of a highincome nation is a challenging task and a fresh approach is required to accelerate the growth of SMEs. The aim is to increase the contribution of SMEs to the economy. The SME Master plan will therefore be the ‘game changer’ in navigating the new development path for SMEs across all sectors until 2020. In the last few years, SMEs have witnessed a marked improvement in their performance. Real Gross Domestic Product (GDP) of SMEs has consistently outperformed that of the overall economy, expanding at an average annual growth rate of 6.8% versus 4.9% for the overall economic growth for the period 2005 – 2016. Through the lens of long-term development, Malaysia has been a success story, enjoying significant economic and social progress for several decades, thus facilitating a transition from a low-income to a middle-income nation. Today, in facing several uncertainties in the external conditions, achieving Vision 2020 to be a high-income nation has become even more challenging. This requires a ‘game changer’ or a new approach towards a fundamental shift in enhancing Malaysia’s competitive advantage from low-cost to high-value of income. It is crucial that the government must precisely know which sector in its economy contributes the most, which have the potential to generate greater future growth and which sectors are weak and need supports to survive in the competitive economy. Hence, this study examines the contribution of SMEs industry towards Malaysian economic growth.