Lack of capital and time hampering SMEs to innovate

Capital barriers are the most obvious in the manufacturing sector, says STMY CEO


The small and medium enterprises (SMEs) in Malaysia are mostly facing capital challenges to innovate and transform their organisations towards Industry 4.0.

According to Steinbeis Malaysia Foundation (STMY), local SMEs have the desire for innovation but operational expenditures remain their priority, instead of spending money on innovation.

“They have to use the money on something else such as salaries and marketing. Capital has always been their biggest obstacle for innovation,” STMY CEO Dr Abdul Reezal Abdul Latif told The Malaysian Reserve on the sidelines of the Subject Matter Experts (SMX) Solutions Programme launch in Kuala Lumpur yesterday.

According to Abdul Reezal, the capital barriers are the most obvious in the manufacturing sector, citing requirements in setting up or expanding factories involving a lot of certifications and costs.

He also singled out the time factor for the SMEs to put in more efforts on innovation specifically.

“They do not have the time. There are a lot of problems that they have to solve every day and hardly have time to sit down with the team to explore innovations. Again, it’s time and money,” he added.

As it is, the SMX Solutions Programme sets to address the issue as the initiative would crowdsource innovative solutions from experts for SMEs’ industrial problems through a competition.

The competition-based programme would advertise problem statements via the media and seek solutions from anyone above 18 years old and resides in Malaysia.

Submission of the ideas could be done in written or video form to STMY and the best one will be chosen by the

SME company itself. One-hundred problem statements will be rolled out until the end of the year, where each of them is given a month for solution submissions.

A total of RM1 million cash incentive is offered, RM10,000 for each problem statement, split between STMY and SMEs for the best idea that is chosen by the associated SME that is facing the problem itself.

The ones who submit the winning idea will transfer intellectual property rights and ownership solution to the company that wishes to proceed further with the solution.

Companies linked to the problem statements and the solution providers will be kept confidential.

STMY — an industry-academia facilitation arm under Agensi Inovasi Malaysia (AIM) — said most of the problem statements gathered are centred around the manufacturing industry, especially in the electrical and electronics sector.

Since its establishment in 2014, STMY itself has about 50 SMX who provide solutions and engage with the industry players in the technical and non-technical fields likewise.

Meanwhile, AIM COO Abdullah Arshad, who was also present at the briefing, said the agency is putting more focus on SMEs for innovations and commercialisations, like-ning the highly potential SMEs as “gazelles” in a safari.

“We identify the gazelles, the ones who jump higher than the rest, have the fire in their belly and want to succeed. We have to be selective and that will always work,” he said.