Putrajaya is targeting a 50% contribution to GDP by SMEs by 2030
By MARK RAO / Pic By RAZAK GHAZALI
THE government targets 50% contribution to GDP by small and medium enterprises (SME) by 2030 from 37.4% registered in 2018, said Prime Minister (PM) Tun Dr Mahathir Mohamad.
Dr Mahathir said entrepreneurship development and SME contributions are important to Malaysia, but stressed that greater financing avenues are needed to build core competencies among local entrepreneurs.
“They do not just raise the level of the economy for the public, but also represent a strategy and initiative to free the country from falling into the middle-income trap,” he said after the launch of the 2030 National Entrepreneurship Policy in Kuala Lumpur yesterday.
Dr Mahathir said this policy is apt and timely due to the uncertainties arising from the US-China trade war in what was already a competitive and challenging economic environment.
He said Malaysia — while forecast to continue to attract foreign investments and achieve high income status by 2021 or 2022 — needs to prepare itself to face adverse conditions to growth.
“Because of this, attention needs to be paid to domestic investment in line with our focus and expectation of foreign direct investment flows into the country.”
According to government data, foreign investments in Malaysia for the first quarter of this year came in at RM29.32 billion to make up 54.4% of the total RM53.91 billion in private investments that year.
However, domestic private investments lagged behind at RM24.59 billion.
The policy underlines five objectives and six core elements, where the PM also expressed hope that it would become the nucleus and catalyst to drive a culture of entrepreneurship in the country.
“For that, each ministry and implementing agency involved in entrepreneur development should move as a team in the implementation of the policy,” he said.
Among its targets, the national policy spearheaded by the Ministry of Entrepreneur Development aims to increase employment generated by the sector from 66.2% to 80% over the same period.
SME’s contribution to total export value will be increased from 17.5% to 30% over that same timeframe, while cooperatives’ turnover will reach RM60 billion from RM40.3 billion.
The initiatives also aim to raise Malaysia’s position in global indices, including the global entrepreneurship, competitive and innovation indices as well as the World Bank’s doing business index.
Meanwhile, Entrepreneur Development Minister Datuk Seri Mohd Redzuan Md Yusof said the national policy is aimed at ensuring that core competencies among entrepreneurs, SMEs and micro-enterprises are developed to create job creators who then fuel the economy.
This will include training and education initiatives for entrepreneurs, as well as fostering more innovation-driven entrepreneurs, while expanding the access to capital and finance made available to them.
The latter requires greater domestic participation in investments in the local entrepreneurial and innovation space.
“We are encouraging it (domestic direct investments). We have a specific programme which we want to bring to high-net-worth individuals, local financial institutions and others to ensure that they have this awareness to invest locally with local innovations,” he told reporters after the policy launch.
He said initiatives for local entrepreneurs have always been present, but what is needed is greater implementation.
“Initiatives have always been there. What we are doing is refining it, consolidating it, improving, it but most importantly is the implementation of it,” he said.
The Entrepreneur Development Ministry was re-established on July 2, 2018, shortly after the 14th General Election concluded in May that same year.
This was part of the current government’s plan to develop the entrepreneur community in line with its manifesto and nation-building efforts.
The National Entrepreneurship Framework was then launched on Nov 22, after engagement with stakeholders comprising entrepreneurs, government agencies, academics, industry experts, non-governmental agencies, private companies and government-linked companies.
The national policy on entrepreneur development was the product of these various engagements.