MSC Malaysia InnoTech Johor SMIDEC

SME DEVELOPMENT

by

Fadzilah Ahmad DinSMIDEC

[email protected]

OUTLINE

• About SMIDEC

• Overview of SME’s in Malaysia

• Financial Assistance

• SME Development Programme

Established under the Parliamentary Act, 539 on 2nd May 1996

An agency under the Ministry of International Trade and Industry

Focal point for the overall development of SMEs in the country

Provides capacity building programmes and assistance through fiscal and non-fiscal incentives

SMIDEC

FUNCTIONS

Promote, coordinate and implement programmes for the development of SMEs

Forge industrial linkages between SMEs and large companies/multinational corporations (MNCs)

Implement, coordinate and monitor financial assistance schemes

Provide technical and advisory support services

Collaborate with other local and international SME-related agencies

OVERVIEW OF SME’S IN MALAYSIA

FACTS & FIGURES

DEFINITION OF SMEs

Services, Primary Agriculture, Information

and Communication Technology (ICT)

Annual sales turnover

< RM5 million

OR

Full time employees

< 50

Manufacturing, Manufacturing Related

Services and Agro -based Industry

Annual sales turnover

< RM25 million

OR

Full time employees

<150

6

CATEGORY MICRO SMALL MEDIUM

Manufacturing, Manufacturing-

related services & Agro-based Industries

sales turnover < RM250,000

OR full time

employees < 5

RM250,000 > sales turnover < RM10 mil.

OR 5 > full time

employees < 50

RM10 mil. > sales turnover < RM25 mil.

OR 51 > full time

employees < 150

Services, Primary Agriculture and Information &

Communication Technology (ICT)

sales turnover < RM200,000

OR full time

employees < 5

RM200,000 > sales turnover < RM1 mil.

OR 5 > full time

employees < 19

RM1 mil. > sales turnover < RM5 mil.

OR 20 > full time

employees < 50

DEFINITION OF MICRO, SMALL AND MEDIUM

7

435,324 (78.7%)

100,333 (18.2%)

12,610 (2.3%)

4,537 (0.8%)

Source: Census of Establishments & Enterprises 2005 – Profile of SMEs

• Total establishments = 552,804

• No. of SMEs = 548,267 (99.2%)

TOTAL ESTABLISHMENTS BY SIZE

MICRO

SMALL

MEDIUM

LARGE

8

9

Services(86.6 %)

Agriculture(6.2 %)Manufacturing

(7.2 %)

Source: Census of Establishments & Enterprises 2005 – Profile of SMEs

DISTRIBUTION OF SMEs BY SECTOR

SMEs Contribute:

32 per cent to GDP

56.4 per cent to Employment; and

19 per cent to Export;

10

SMEs AND THEIR IMPORTANCE TO THE MALAYSIAN ECONOMY

SUPPORT FOR SMEs

SMEDevelopmentProgrammes

FinancialAssistance

Programmes

11

SMIDEC

12

FINANCIAL ASSISTANCEPROGRAMMES

SMIDEC

1. Start-up Stage

2. Growth

3. Expansion

4. Maturity Stage

TimeLow

High

Assistanceprovided

1. Start-up Stage

• Business start-up

• Enhancing Marketing Skills of SMEs

SLSMEs

2. Growth

Product & Process Improvement

Certification & Quality Management Systems

Skills Upgrading

Market Development

SLSMEs

3. Expansion

Enhancing Product Packaging

Soft Loan for ICT Adoption

SEAP

Market Development

SLSMEs

4. Maturity

• Market Development

• Soft Loan for ICT Adoption

• SLSMEs

Tech

nolo

gy

Leve

l

SMIDEC’s ASSISTANCE For SMEs

Globally Competitive

SMIDEC

Matching Grant

• 50% of the approved project cost is borne by the Government and the remainder by the applicant

Soft Loan

• Low interest rate• Longer repayment period

FINANCIAL ASSISTANCE PROGRAMMES

14

SMIDEC

Matching Grant for Business Start-Up

Matching Grant for Product and Process Improvement

Matching Grant for Certification and Quality Management Systems

Matching Grant for Market Development

Matching Grant for Development and Promotion of Halal Products

Matching Grant for Enhancing Product Packaging

Grant for RosettaNet Standard Implementation

RM100,000

RM500,000

RM100,000

RM200,000RM250,000

RM100,000RM150,000

MATCHING GRANTS FOR THE MANUFACTURING

SECTOR

15

SMIDEC

25

Business Start-Ups(RM100,000)

Advertisement and Promotion(RM50,000)

FINANCIAL ASSISTANCE

SCHEME FOR SMEs IN THE SERVICES

SECTOR

SMIDEC

Soft LoanSchemes

Soft Loan for SMEs

(SLSME)

Soft Loan for Factory

Relocation (SLFR)

Soft Loan for ICT Adoption

(SLICT)

• Interest Rate: 2%• Max Loan: RM3 million• Payment Period: 15 years

• Interest Rate: 2%• Max Loan: RM3 million• Payment Period: 15 years

• Interest Rate: 2%• Max Loan: RM500,000• Payment Period: 5 ½ years

26

SME DEVELOPMENT PROGRAMMES

28

1. INDUSTRIAL LINKAGE PROGRAMME

2. SKILLS UPGRADING PROGRAMME

3. OUTREACH PROGRAMMES

4. SME COMPETITIVE RATING FOR ENHANCEMENT (SCORE)

5. ENTERPRISE 50 AWARD PROGRAMME

SMIDEC

29

7. BUMIPUTRA ENTREPRENEUR ENHANCEMENT PROGRAMME ( BEEP)

8. SME – UNIVERSITY INTERNSHIP PROGRAMME

6. NATIONAL WOMEN ENTREPRENEUR AWARD (NWEA)

9. TECHNOLOGY AND INNOVATION PROGRAMME

10. SME EXPERT ADVISORY PANEL (SEAP)

11. NATIONAL MARK OF MALAYSIAN BRAND

SME DEVELOPMENT PROGRAMMES

SMIDEC

30

INDUSTRIAL LINKAGE PROGRAMME

• Integrating SMEs into the supply chain of the MNCs/Large Companies

• Promoting competitive and capable SMEs to become suppliers to MNCs/Large Companies

MNCs/LSIs SMEs

Global Supplier Programme

Enhancing Marketing

Skills

Status (as at May 2009) :33,789 employees trained (RM32.24 million)

Skills Upgrading Programme

31

43 SKILLS DEVELOPMENT CENTRES &

PROFESSIONAL TRAINING PROVIDERS APPOINTED:

80% training grant on the course fee

SKILLS UPGRADING PROGRAMME

http://www.brandsoftheworld.com/download/brand/170852.html

OUTREACH CHANNELS

Business Advisory Services (BAS)

Virtual SMEInformation Centre :

[email protected] /www.smidec.gov.my

InfoLine :1-300-88-1801

SME BUSINESS CENTRE (19th FLOOR)

32

33

Policies, Incentives,Programmes &

Financial Assistance for SMEs

SME Newslink SME eNews

Annual Report

TrainingDirectory

Brochures

Women Entrepreneur

Directory

Publications

Step by Step Guide - Starting a Business

As a tool to evaluate and track SME’s capabilities and performance in management, operation management, technology adoption, certification initiatives, financial capability and marketing capability.

Visit & SCORE

As a basis to identify:

• Weaknesses of SMEs as more focused approach and provide integrated, hand-holding assistance to SMEs;

• Facilitating linkages of potential SMEs with large companies/ MNCs / retailers ; and

• To facilitate and identify suitable financial assistance for the development of SMEs

SME

34

SME COMPETITIVE RATING FOR ENHANCEMENT (SCORE)

BusinessPerformance

Financial Capability

Technical Capability

Management Capability

Quality System

InnovationProduction Capacity

SMEs

• Corporate Planning• Technology & Innovation Management• Human Capital Development • IT Adoption

• Sales • Average Growth• Export• Marketing • Customer Satisfaction

• Current Assets• Current Liabilities • Gearing Ratio• Profit

• No. of Trained Personnel• MTS Ratio• Types of Technology Utilised • Capital Investment

per Employee (CIPE)• Factory Automation Level• Machine Utilisation

• Intellectual Property Rights• Product & Process Improvement • Capability of Products & Process Improvement Activities

• Practice of Continuous Improvement• Product Certification • Certification (Basic & Advance Requirement)• Awards

Score - Manufacturing & Manufacturing Related Services Model

35

• Annual Sales• Export Sales• Business growth and expansion • Customer Satisfaction & Awards• Customer Management• Knowledge Management

• Paid Up Capital• Current Assets & Liabilities• Profitability

• Qualification and Staffing• Standard Operating Procedure

(SOP)• Project Management• Implementation Methodology• After Sales Service

• IPR• Product & Process Activity• R&D• Culture of Innovation• Awards• Channels of Marketing

• Allocation for Marketing Activities• Channels of Marketing• Customer Profiling• Marketing Strategy• Brand Strategy

• Staff Recruitment• Staff Retention • Training • Knowledge Management Retention

• Vision & Mission• Management Team• Reward System• Strategy• Training• Risk Management


FinancialCapability

Innovation

Marketing Capability

SMEs

Business Performance

Talent Development

Operation Management

SCORE – ICT MODEL

36

No Star Very basic operation Lack of experience in ICT

sector (new); Poor financial performance; Minimal operational standards; Limited or no marketing/branding presence; Lack of innovation capability

Poor business revenue growth; Below par financial performance; Processes are in place, but development needed to be compliant within entire organization; Has a rudimentary marketing and brand presence

Slight business growth, competitive in domestic market; Average financial performance; Some processes in place although not fully compliant; Keen to develop a brand presence but is on the cusp of market recognition; Possesses valid but unclear career path within company; limited management of knowledge assets

Good business revenue growth, highly experienced in ICT sector, globally competitive; Good financial performance and capability; Good operational capability with some form of process in place; Has a marketing & branding system in place, but may not be recognizable industry-wide; Some innovation process in place; Good management of knowledge asset, adopts a semi-aggressive employee retention program

Exceptional business growth, highly experienced in ICT sector, excellent recognition and globally competitive; Proven excellent financial performance and growth potential; Excellent organizational capability in compliance with recognized standards; Effective marketing capability; Excellent innovation management and capability; High dedication in talent development, clear career development path

SCORE RATING-ICT

SCORE - DISTRIBUTIVE TRADE MODEL

SMEs


FinancialCapability

Operation ManagementStock

Management

Marketing Capability

Compliance to Requirements


• Sales Turnover & Growth• Profit Margin• Customer Services• Business Growth & Expansion• Suitability of Location• Accessibility

• Current Assets & Liabilities• Liquidity & Gearing Ratio• Creditor's Aging• Profitability

• Qualification & Staffing• Experience• ICT Adoption & Utilisation• Standard Operating Procedures

• Stock Policy • Stock Management• Sourcing Strategy

• Promotional Activities• Customer Retention • Business Value Proposition

• Premise• Insurance• Quality Standards

• Business Planning / Strategy• Human Capital Development• Reward System• Job Segregation / Management Structure

38

SMEs


FinancialCapability

Technical CapabilityProject

Management

Best Practices


• Sales Turnover & Average Growth(3 yrs)• Client Satisfaction• Order Book

• Liquidity & Gearing Ratio• Net Worth/Profit• Profit Margin

• Qualification & Staffing• Experience• Past Project Performance• Area of Specialisation

• Quality Management Risk Management• ICT Utilisation

• Technical Compliance• Cost Management• Procurement Policy• Materials Management

• Product & Process

Improvement• Awards• Quality Standards

• Business Planning • Human Resource Development• Reward System• Management Structure

ProcurementManagement

39

SCORE - CONSTRUCTION MODEL

SMEs

Score – Maintenance, Repairing & Overhaul Model


FinancialCapability

OperationalManagement

Innovation


TechnicalCapability

Quality System

• Annual Sales• Export Sales• Business growth and expansion • Customer Satisfaction• Customer Management• After Sales Service

• Paid Up Capital• Current Assets &

Liabilities• Profitability

• Vision & Mission• Reward System• Strategy• Training• Innovation Culture

• IPR• Product & Process Activity• Product & Process Improvement Capability

• Staff Recruitment• Types of Technology Utilised • Facilities

• Basic Compliance• Continuous Improvement Activities • Awards

• Capital Investment per Employee (CIPE)• Factory Automation Level• Machine Utilisation • Standard Operating Procedure (SOP)• ICT Utilisation

40

Total SCOREd - 1,653 SMEs

As at May 2009

STATUS - SCORE

41

156 (9%) 472 (29%)

693 (42%)

267 (16%)

65 (4%)

No Star 1 Star 2 Star 3 Star 4 Star

Prestigious award recognising the achievements of Top 50 enterprising home-grown companies

Provide opportunities to benchmark against their peers

1996 - 2008 :

• TOTAL NOMINATIONS - 1,388• TOTAL ALUMNI - 424• LISTED ON MALAYSIAN BOURSE - 41

ENTERPRISE 50 AWARD PROGRAMME

42

43

Tribute to the commitment and tenacity displayed by women entrepreneurs

Premier award for women entrepreneurs at National level.

In collaboration with MECD, the Ministry of Women, Family and Community Development, FEM, NAWEM as well as Deloitte Consulting (M) Sdn Bhd.

Three (3) special Awards : Emerging Entrepreneur Award; Platinum Entrepreneur Award; and Entrepreneur Extraordinaire Award.

NATIONAL WOMEN ENTREPRENEUR AWARD (NWEA)

Benefits to SMEs:

- exposure to the latest development of business practices and applications of technology; and

- improved ways of doing business.

Benefits to students:

- industry exposure and practical applications of their studies as well as enhance self confidence in doing business; and

- inculcate the spirit of entrepreneurship.

Local SMEs Students

University Education

Linking SMEs to Universities to upgrade the capability of SMEs

Local & International Networking

45

SME – UNIVERSITY INTERNSHIP PROGRAMME

STATUS• UIAM & UMK - will start by July 2009

• UKM - will start by June 2009

• UMS - Discussion initiated

MARKET TECHNOLOGY FUNDING

INNOVATION FOR SMEs

TECHNOPRENEURSHIPBUSINESS

MATCHING / MARKET ACCESS I-SME

VENTURE CAPITALIST

KEY INITIATIVES…

INNOVATION DATABASE GRANTS

SME-UNIVERSITY INTERNSHIP PROGRAMME

I-SME

TECHMARTRESEARCH-ER PROFILE

TECHNOLOGY ROADMAP

SMIDEX SHOWCASE

TRADE MISSIONS

I-SME

46

Government Ministry & Agencies

Industry Associations

Banks /FinancialInstitutions

Research Institutions/Universities

47

SMIDEC

SME INNOVATION COMMITTEE

48

TECHNOLOGY DATABASE

49

RESEARCHERS PROFILE DATABASE

Completed 3 Roadmaps

Electrical & Electronics – Penang Skills Development

Centre

ICT – MIMOS, MOSTI

Biotechnology Industry – Biotech Corp, MOSTI

Work In Progress

Automotive Sector - PROTON

Rubber Products – Malaysian Rubber Board

Wood & Wood Based Products – FRIM

Medical Devices – SIRIM

Pharmaceutical – Pharmaniaga,

Technology Roadmaps

50

Value Roadmap –The Penang Story

70s 80s 90s 00s and beyond60s

Quality and Automation

R&D Sub-ConSupport Centers

• Basic industries• Agriculture

• Low value added exports

• Textile/garment• Labor intensive • Electronic

component assembly

• Test

•Semicon mfg•Consumer electronics•Automation•TQC

•Semicon process development

•Test systems development

•Supply chain management

•Disk drives

• Business mgmt• Outsourcing• Service center• R&D• Software• Global hub• Alternative sites

• Machine shop service• General maintenance• Trade

•Tool and die•Machine integration•Plastic molding•Custom service•Improvement projects

•Investment in high tech machine shops

•Drive components production

•Test auto-handlers

•PCB assembly automation

•Mfg sub-con•General mfg machinery

• Basic software• Design companies• Contract mfg

Global Competiti

on

MNC

SMI

By Penang Skill Development Corporation (PSDC)

51

TECHNOLOGY ROADMAP – E&E

In summary, this Roadmap will serve as a methodology and framework providing overall directions to all ICT stakeholders whilst complementing other national plans

By MIMOS

52

TECHNOLOGY ROADMAP – R&D ON ICT

PHASE I (2005-2010) Capacity Building

PHASE II (2011-2015) Science to Business

PHASE III (2016-2020) Global Business

Establishment of advisory and implementation Councils

Establishment of Biotechnology Corporation of Malaysia

Incentives Capacity Building in R&D Industrial Technology

Development Develop Agricultural,

Healthcare and Industrial Biotechnologies

Develop Legal and IP Framework

Business Development through Accelerator Programmes

Bioinformatics Skills Development Regional Biotechnology Hubs Develop BioNexus Malaysia as

a brand Initial job and industry

creation

Develop expertise in drug discovery and development based on biodiversity and natural resources

New Products Development

Technology Acquisition Promote FDI

participation Intensify Spin-off

Companies Strengthen Local and

Global Brands Develop Capability in

Technology Licensing Job Creation

Consolidate Strengths and Capabilities in Technology Development

Further Develop Expertise and Strength in Drug Discovery and Development

Leading Edge Technology Business

Maintain Leadership in Innovation and Technology Licensing

Create greater value through Global Malaysian Companies

Re-branding of BioMalaysia as Global Hub

By Biotechnology Corporation

53

TECHNOLOGY ROADMAP – BIOTECHNOLOGY

20

06

20

08

20

11

20

13

20

16

20

21

Video tiles

Fixed Mobile Convergence;

Electronics Prescriptions;

24/7 Blood Chemistry Monitoring;

Instant Voice Mail;

Smelly Television;Digital Bathroom Mirrors ;

Virtual Windows;

1st Extreme Olympics;

Holographic Animated Advertisement;

Smart Skin for Direct Human Repair ;

100GB Memory Sticks.

Al Entity Passes A Level ;

Smart Jelly Babies;

Tooth Regeneration;

Plastics Bones;

Hydrogen Fuel on UK Forecourts;

Full Voice Interaction With PC.Nanotechnology Toys

Active Skin Make-Up;

Hotel in Orbit;

Cybernetic Use in Sports;

Robots Guide Blind People;

Manufacture of Long Diamond Fibres.

Electronic Pets Outnumber Organic Pets ;

Electronic Life Form Given Basic Rights;

Listing of Individual’s DNA;

Artificial Sensors in Cosmetic Surgery;

Privatised Police Forces;

Smart Bacteria;

Dream link Technology.

First Bionic Olympics;

Remote Control Devices in Pets;

Smart Yogurt;

Holographic TV;

Anti-noise technology in gardens;

Biochemical storage of solar energy.

2051

2006 - 2021

By British Telecom PLC

54

BRITISH TELECOM’S TECHNOLOGY ROADMAP

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Market

STRATEGIC THRUST 4

4.

Provide fiscal incentives and encouragegreater participation in high risk venture

Launch “Fast-Track Programme” for I-SME

Establish Angel Network

Innovation Led Economy

Institution

HumanCapital

SME &Techno-preneur

Funding

Technology

SME &Techno-preneur

Technology

Innovation-Enhancement Points

Source: MOSTI

Shaping National Innovation Led Economy by Developing Market-Driven and Technology-Driven Innovation for Wealth Creation and

Societal Well Being

55

NATIONAL INNOVATION ACTION PLAN

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INNOVATION SME (I-SME) - CONCEPT

PROPOSED I-SME ASSESSMENT (mechanism)

ELIGIBLE FOR FAST

TRACK PROGRAM

ME

58

FAST TRACK PROGRAMME (FTP)

58

The Fast Track programme would entail priority

access to: Funding for technology acquisition to shorten time-to-market Fast-track approvals (e.g. IP registration) Dedicated assistance in prototyping GLC partnership for reference sites support Networking platforms (e.g. special forums with global VCs)

Other proposed elements for I-SMEs include: Limited number of participants in the Programme, where SMEs

have to compete for a space, to encourage competitive

element Limited time-frame for participation in the Programme to

ensure constant review/ progress is achieved

FAST TRACK PROGRAMME (FTP)

59

Establishment of the Technology Database in the

SMIDEC portal in collaboration with MASTIC,

MOSTI.

956 technologies are available for

commercialisation by SMEs in all sectors; and

Establishment of database of expert profiles

through SMIDEC’s website, collaboration with

MASTIC, MOSTI.

A total 18,413 researcher’s profile is

currently available in the database.

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INNOVATION DATABASE

72 Industry Experts

Visit ,Diagnose & Recommend Improvements

Packaging & Labeling Production capabilities Compliance to Standards/

Certification Lean Production System Management & Financial

Advisory

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SME

SME EXPERTS ADVISORY PANEL (SEAP)

create and build a strong

presence towards

customer recognition;

increase global and regional market

penetration.

NATIONAL MARK OF MALAYSIAN BRAND

The Malaysian Brand mark is aims to:

THANK YOU

MSC Malaysia InnoTech Johor SMIDEC

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