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Speech by YB Senator Heng Seai Kie, Deputy Minister of Information, Communications and Culture at the occasion of the official launch of the SME Recognition Award 2009 held at the Legends Hotel, Kuala Lumpur on 11 August 2009.
A very good morning to all of you.
Before I start my speech, I would like to thank SMI Association of Malaysia for inviting me to this morning ‘s event and to officiate the Official Launch of the SME Recognition Award 2009.
It is indeed commendable that SMI Association of Malaysia has successfully organized this Recognition Award for eight consecutive years to honour and recognize the outstanding achievements of SMEs in this country. Without doubt, this Recognition Award has served as a benchmark for SME excellence , increased the exposures of SMEs and enhance their image, branding and intellectual property locally and internationally.
It is heartening to note that more than 800 SMEs have been recognized and honoured in the Award’s eight year history while more than 30 of these SMEs have gone on to become public-listed entities. With so many high quality and fast developing SMEs in our midst, our country should be able to provide quality goods and excellent services that can expand our trade boundaries.
Ladies and Gentlemen
The winds of change are blowing, not just onto Malaysian shores but globally. All around the world, countries are buffeted by the economic maelstorm that originated from the US-led financial crisis and collapse of the Banking system last September. In the ensuing months, demand for goods and services seemed to have evaporated overnight. Many industries, even venerated conglomerates like General Motors, have gone bankrupt. The repercussions and ripple effects of such disasters have resulted in mass employment not only in the United States but in many of the developed countries as well.
Malaysia is not spared from this worldwide phenomenon, as demand for products and services have shrunked drastically , leading to many companies suffering huge losses and causing negative growth in our economy in the last few quarters.
While we cannot change the direction or speed of the wind, we can certainly adjust our sails to catch the wind and go with the flow.
Economic winds of change necessitate a rethinking of policies and strategies. That’s why in recent months, the Government has announced a series of measures intended to bring about a new economic model to take Malaysia out of the current global economic gloom and into a new growth phrase.
The measures introduced, among them the liberation of our financial sector and, the lifting of foreign investment restrictions in 27 service sectors , should enhance our competitiveness in the global market and bring about greater foreign investment into the country.
Malaysia’s export-led growth model in the last 30 years has resulted in a certain degree of success. It has certainly led to the transformation of our agriculture-based economy into a dynamic industrial and knowledge-based economy. Today, Malaysia is the 21st largest trading nation in the world and is well on its way to become a developed nation, having created a vast middle-income economy.
But this economy is highly dependent on export-led products and services and is susceptible to the vagaries of the changing global economy. Indeed, our economic growth appears to be losing some of its high growth momentum in recent years. Intense competition from emerging countries like China, India and Vietnam , with their low cost regime, have eroded the competitive edge of our goods and services.
Malaysian SMEs, in particular, are most venerable to such low-cost competition, and have seen their business and market disappear under the onslaught of intense foreign competition. The current global recession has further acerbated their demise. Unless we are prepared to undergo a transformational change in our mindset and value system, we are in danger of losing everything.
Ladies and Gentlemen,
I find the theme of this year’s SME Recognition Award 2009 to be most appropriate and timely. The theme “ Innovating and Branding Towards a New Paradigm” reflects the urgent need for SMEs to change their traditional ways of doing business and adopt new technologies such as ICT and product branding to differentiate their products from their competitors.
SMEs need to constantly innovate and upgrade their products, add value and quality to their components in order to stay relevant and competitive in the global marketplace.
They also need to look beyond the domestic market and brand and promote their products for the international markets to increase their volume of business. Given the collapse in the Western economies, it is high time for SMEs to venture into the non-traditional markets like Central Asia , African and South American countries.
The need for a paradigm shift – that is changing our mindset and value system - is crucial if we are to proceed beyond our current capabilities. We need to be forward thinking, creative and have a learning culture to keep abreast of the rapid changes in the world.
While the Government is instituting changes to bring about a new economic model, the SMEs which is considered our country’s “engines of growth” too must reinvent themselves and be more creative and adaptive to new ideas and technologies. They need to embrace the new knowledged-based and innovation-based economy whole-heartedly and understand its complexities in order to bring about products and services that are new, value added and innovative. Only then, can our SMEs compete effectively with the rest of the world.
My Ministry, the Ministry of Information, Communications and Culture, too is looking at ways and means to disseminate timely information and promote the Government’s new economic model which emphasize domestic consumption and creativity and innovation to drive productivity. We will also be looking at how SMEs can adapt and benefit from its implementation.
Ladies and Gentlemen
I think it is realistic to say that Malaysia’s new economy model will have no “final form” because of the constant need to evolve, considering the rapidly changing global economic environment . For SMEs, I would venture to say that it would be wise if they focus and specialize in areas where they have a competitive and comparative advantage where they can achieve economies of scale and technological leadership.
A case in point are the South Koreans who have focused on producing high quality products with well-recognised brand names – names like Samsung, LG Electronics, Hyundai and Kia Motors. As a result of their innovation, concentration of quality and global branding, their products are well-accepted through the world.
It would surprise you to know that South Korea was way behind Malaysia in the 1950s in terms of economic development. According to MIER research, Malaysia’s real per capital gross domestic product was US1,696, nearly doubled that of South Korea’s US$876. By 1973, Malaysia’s real per capita GDP was US$3,167 while that of South Korea has risen to US$2,840. And by 1996, South Korea’s GDP of US$12, 874 has already overtaken Malaysia’s GDP of US$7,764. The South Koreans achieved this by changing their mindset and outlook of things.
In conclusion, I would urge SMEs to first change their mindset and value system – free their minds to pursue knowledge, creativity and innovative so that they can constantly think “out of the box” and develop products and services that will be relevant and useful for the world of tomorrow.
Be bold and be creative, because once you have set your mind to do something different, you set in motion a chain of events that will ultimately lead you to your desired destination.
With that, I would like to con conclude by thanking the SMI Association of Malaysia for inviting me to officiate the official launching of the SME Recognition Award 2009. I wish the organizers all the success in their Awards programme.
Thank you.
