Publication: Malaysia’s Experience with the Small and Medium Sized Enterprises Masterplan: Lessons Learned
Loading...
Date
2020-02
ISSN
Published
2020-02
Author(s)
Editor(s)
Abstract
Productivity-enhancing measures play a pivotal role in Malaysia’s aspirations of becoming a high-income economy. Malaysia has enjoyed an impressive growth performance over the past few decades, with growth rates of at least 7 percent per year for more than 25 consecutive years. However, with the rise of other emerging economies, notably China and India, Malaysia has faced challenges in pivoting away from a ‘low-cost, high-volume’ strategy towards a ‘high-value’ one. Small and medium-sized enterprises (SMEs) are a crucial component of Malaysia’s strategy to become a high-income nation. As SMEs account for all but 1.5 percent of firms and the bulk of production and employment, they are central to Malaysia’s objective of becoming a high-income economy. SMEs form the bedrock of the private sector and innovation and can contribute to growth by supplying multinationals or accessing international markets directly. Despite their critical importance, the share of Malaysian SMEs in GDP (32 percent) and total exports (16 percent) was far lower than competitors in 2010. At the time of preparation of the Masterplan, the export share was more than 20 percent lower than that in countries such as the Philippines, Hong Kong, Taiwan and even the US, and there was also scope for greater sectoral and geographical diversification. It was recognized that specific policies to enable favorable conditions for SMEs to flourish were needed so that they can easily expand into fast-growing markets and increase the production of knowledge- and innovation-based products and services.
Link to Data Set
Citation
“World Bank Group. 2020. Malaysia’s Experience with the Small and Medium Sized Enterprises Masterplan: Lessons Learned. © World Bank. http://hdl.handle.net/10986/33437 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Citations
Related items
Showing items related by metadata.
Publication The Big Business of Small Enterprises : Evaluation of the World Bank Group Experience with Targeted Support to Small, and Medium-Size Enterprises, 2006-2012(Washington, DC: World Bank, 2014-03)The World Bank Group promotes small and medium-size enterprise (SME) growth through both systemic and targeted interventions. A critical challenge is to root the many activities now undertaken in this broad space in a clear understanding of the characteristics and dynamics of SMEs role in the broader economy; and their actual and potential contribution to jobs, growth, and shared prosperity. A closely related challenge is to formulate clear strategies that connect interventions to intended outcomes and are accompanied by solid measurement systems that provide evidence of results and allow learning. Targeting means focusing benefits on one size-class of firms to the exclusion of others. Targeted support for SMEs is a big business for the World Bank Group, averaging around $3 billion a year in commitments, expenditures, and gross exposure over the 2006-12 periods. In the context of broader reforms, targeted small and medium-size enterprise (TSME) support can be a powerful tool and, given the size of the recent program, it is vital for the World Bank Group to use it effectively. Targeting SMEs is not an end in itself, but a means to create economies that can employ more people and create more opportunity for citizens to achieve prosperity. A thriving and growing SME sector is associated with rapidly growing economies. IEG s review of the SIP suggests that although it has high relevance, it is of doubtful efficacy and efficiency. MIGA s regular portfolio of TSME projects performs worse than other financial sector guarantees, and there is no evidence to determine their impact on SMEs. The viability and sustainability of SMEs investments, whether through SIP or the wholesale approach, could not be ascertained because of the lack of information on results and performance.Publication Chile : A Strategy to Promote Innovative Small and Medium Enterprises(World Bank, Washington, DC, 2008-02)With its strong export orientation and emphasis on competitiveness, the Chilean economic model has been the envy of its neighbors for more than a decade. However, there are underlying vulnerabilities. Historically, exports have been concentrated in mining and agriculture, sectors dominated by large firms that do not generate a large share of employment. Small and medium enterprises play a key role in employment generation and economic decentralization in Chile, yet their employment was stagnant between 2000 and 2004. Based on work completed in 2003, this study provides a review of the Chilean government's substantial investment in programs that support small and medium enterprises. This review of government programs confirms the importance of coordination and an overarching strategy, in the form of a National Innovation System, led by a single institution. The review also finds that demand-driven programs were more likely to be sustainable. Finally, the study demonstrates that Chile (and other countries with many support programs for small and medium enterprises in place) needs an integrated management information system to analyze, assess, coordinate, and streamline the program portfolio for small and medium enterprises in the future.Publication Competitive Small and Medium Enterprises : A Diagnostic to Help Design Smart SME Policy(World Bank, Washington, DC, 2013-05)Small and medium-sized enterprises (SMEs) account for a lion's share of the enterprises in most economies and are also thought to be an engine of new growth and innovation. The focus of this paper is to take the insights on SME mix and segments to practical implications for developing countries around the world. The paper attempts to do this by providing a diagnostic approach that client countries and regions can use to assess their SME sectors and tease out firms' contribution to the local economy. Guidelines and specific examples of policies based on the insights in the paper have been provided. Lastly, the paper includes some areas of future research that are required on the subject. This paper proceeds in three steps. The first is to better understand the economic contribution of SMEs. This analysis complements the existing policy focus and takes it further to direct attention to a more specific set of growth drivers to enable the firms that matter disproportionately, the competitive SMEs, while remaining inclusive and avoiding market distortion. The second step is to develop a perspective on how best to complement the policy focus on competitive SMEs with that on larger firms. Policy-makers need to structure policy appropriately to develop a healthy eco-system of firms. The third step is to make this analysis actionable by policy-makers. This paper provides an initial SME policy diagnostic. A better understanding of how to encourage SME growth has the potential to make a substantial contribution to national economic performance.Publication Chile : A Strategy to Promote Innovative Small and Medium Enterprises(Washington, DC, 2004-05-21)This study is to provide the Government of Chile with a review of the portfolio of small and medium enterprise (SMEs) development programs and the institutions that provide them, leading to recommendations to improve the effectiveness of a streamlined portfolio. This emphasis is important for economic reasons, given the sectors role in employment, and the possibility of improving its integration into the national economy and export-oriented production and marketing chains. However, this analysis also identifies areas where SMEs can more effectively leverage government programs to become more productive, efficient, and innovative. The analysis is based on interviews with key policymakers, managers and other staff of the government institutions responsible for most of the programs secondary reports, and discussions with small business managers, business association leaders, academicians and financial intermediaries. The report is organized as follows: The first chapter reviews the evolution of the macroeconomic and business environment in Chile, and provides the theoretical arguments upon which the governments intervention in favor of SMEs has been based; second chapter examines the characteristics of the SME sector, as well as key determinants of SME productivity and growth; third chapter describes the obstacles to SME development, such as constraints to financial resources; fourth chapter recommends a streamlined portfolio of private sector assistance projects and provides an institutional analysis of Production Development Corporation (Corporacion de Fomento de la Produccion) (CORFO), Agricultural Development Institute (Instituto de Desarrollo Agropecuario) (INDAP) and Technical Cooperation Service of Chile (Servicio de Cooperacion Tecnica de Chile) (SERCOTEC); fifth chapter focuses on programs that promote innovation, technology and networks, and finally sixth chapter offers strategic and operational recommendations to improve the effectiveness of the Governments investment in SME programs.Publication Argentina - Small and Medium-Sized Enterprises in Argentina : A Potential Engine for Economic Growth and Employment(Washington, DC, 2002-08)The convertibility law, and economic liberalization in the early 1990s in Argentina, brought about dramatic changes in economic performance. To adjust to increasing globalization, and a series of external shocks, small and medium size enterprises (SMEs) were confronted with the task of developing business strategies to secure their niches in the new arena. However, such strategies were obstructed by constraints in the legal, and economic framework, weak information and technology aspects, and insufficient access to finance. The report builds on the following issues: 1) the critical aspect of the SME sector to the Argentine economy, both from a growth/efficiency, and equity standpoint; yet on average, SMEs have failed to attain their potential; 2) the highly heterogeneous configuration, particular organizational, and technological characteristics of SMEs; 3) the high degree of institutional rigidity of the country's business environment; 4) the need to develop policy actions to deepen financial markets for SMEs; 5) the significant knowledge constraints - by and large, no training nor technical assistance services are available, mainly because of high costs; 6) the striking multiplicity of SME programs, yet with uncertain impact; and, 7) the need to overhaul SME policies, and programs to prod more incentive- and demand-driven approaches. Elements for effective SMEs assistance programs include the development of a standard set of metrics to measure performance of SMEs, and, entrepreneurial management, deemed of critical importance. As well, cost recovery growth should be targeted, extensively using follow-up techniques, and leveraging their effectiveness through the use of information, and communications technology. Most importantly, the policy challenge lies in taking initiatives to develop institutions at the national, and local levels, to encourage transition from inward-looking firms, narrow search routines, and information-poor markets, to learning-oriented firms, and mature, information-rich markets.
Users also downloaded
Showing related downloaded files
Publication Environmental Flows in Water Resources Policies, Plans, and Projects : Findings and Recommendations(World Bank, 2009)The overall goal of the analysis presented in this report is to advance the understanding and integration in operational terms of environmental water allocation into integrated water resources management. The specific objectives of this report are the following: 1) document the changing understanding of environmental flows, by both water resources practitioners and by environmental experts within the Bank and in borrowing countries; 2) draw lessons from experience in implementing environmental flows by the Bank, other international development organizations with experience in this area, and a small number of developed and developing countries; 3) develop an analytical framework to support more effective integration of environmental flow considerations for informing and guiding: (a) the planning, design, and operations decision making of water resources infrastructure projects; (b) the legal, policy, institutional, and capacity development related to environmental flows; and (c) restoration programs; and 4) provide recommendations for improvements in technical guidance to better incorporate environmental flow considerations into the preparation and implementation of lending operations.Publication World Development Indicators 2010(World Bank, 2010-04-01)The 1998 edition of world development indicators initiated a series of annual reports on progress toward the International development goals. In the foreword then, World Bank President James D. Wolfensohn recognized that 'by reporting regularly and systematically on progress toward the targets the international community has set for itself, the author will focus attention on the task ahead and make those responsible for advancing the development agenda accountable for results.' The same vision inspired world leaders to commit themselves to the millennium development goals. On this, the 10th anniversary of the millennium declaration, world development indicators 2010 focuses on progress toward the millennium development goals and the challenges of meeting them.Publication Stolen Asset Recovery : A Good Practices Guide for Non-conviction Based Asset Forfeiture(World Bank, 2009)The guide is organized into three major parts: Part A first provides an overview of the problem of stolen assets and the problem of recovering the assets once they are transferred abroad. Second, it describes how the international community has taken steps to respond to the problem through United Nations Convention against Corruption (UNCAC) and the Stolen Asset Recovery (StAR) Initiative. UNCAC introduced a new framework to facilitate the tracing, freezing, seizing, forfeiture, and return of assets stolen through corrupt practices and hidden in foreign jurisdictions. The StAR Initiative developed an action plan to support the domestication and implementation of asset recovery provisions under UNCAC, to facilitate countries' efforts to recover stolen assets that have been hidden in foreign jurisdictions, and ultimately, to help deter such flows and eliminate safe havens for hiding corruption proceeds. Third and finally, Part A introduces non-conviction based (NCB) asset forfeiture as one of the critical tools to combat corruption, describing the situations when it is useful, how it differs from criminal forfeiture, its usefulness in civil and common law jurisdictions, and the support it has gained internationally. Part B contains the 36 key concepts. The concepts have been grouped together by topic area, including prime imperatives, definitions of assets and offenses subject to NCB asset forfeiture, measures for investigation and preservation of assets, procedural and evidentiary concepts, determining parties and ensuring proper notice, judgment proceedings, organizational considerations and asset management, and international cooperation and asset recovery. The concepts are illustrated through examples from cases and excerpts from different jurisdictions' NCB asset forfeiture legislation. Part C contains a number of special contributions written by individual practitioners. The contributions focus on the general practice of NCB asset forfeiture and international cooperation in specific jurisdictions, namely Colombia, Guernsey, Ireland, Kuwait, Switzerland, Thailand, and the United Kingdom. In addition, some contributions illustrate a selection of NCB asset forfeiture practices, such as asset management, delegating certain roles to the executive branch, and pursuing forfeiture based on illicit enrichment.Publication Macroeconomic and Fiscal Implications of Population Aging in Bulgaria(World Bank, Washington, DC, 2014-02)Bulgaria is in the midst of a serious demographic transition that will shrink its population at one of the highest rates in the world within the next few decades. This study analyzes the macroeconomic and fiscal implications of this demographic transition by using a long-term model, which integrates the demographic projections with social security, fiscal and real economy dimensions in a consistent manner. The simulations suggest that, even under fairly optimistic assumptions, Bulgaria's demographic transition will exert significant fiscal pressures and depress the economic growth in the medium and long term. However, the results also demonstrate that the Government of Bulgaria can play a significant role in mitigating some of these effects. Policies that induce higher labor force participation, promote productivity and technological improvement, and provide better education outcomes are found to counteract the negative consequences of the demographic shift.Publication Opportunity Assessment to Strengthen Collective Land Tenure Rights in FCPF Countries(World Bank, Washington, DC, 2021-10)Governments, development institutions, and the private sector are increasingly turning to nature-based solutions to address the world’s climate and biodiversity crisis. Countries, corporations, and investors are increasingly looking to forest- and land-based emission reduction programs (ERPs) to achieve early mitigation gains while they develop longer-term strategies and solutions to cut their greenhouse gas emissions. Central to emerging natural climate solutions are efforts to reduce deforestation and forest degradation while encouraging restoration, conservation, and sustainable use of forests in developing countries. The Forest Carbon Partnership Facility (FCPF), which became operational in June 2008, is a global partnership focused on reducing emissions from deforestation and forest degradation, forest carbon stock conservation, the sustainable management of forests and enhancement of forest carbon stocks (REDD+). Communal land and forest tenure rights for Indigenous Peoples and local communities (IPLCs) is critical for the success of emission reduction program (ERP) implementation. The remainder of this report is structured as follows. Section 2 provides an overview of the analytical and methodological approach of the study. Section 3 discusses core findings about the nature and range of emergent opportunities associated with efforts to advance, strengthen, and leverage rights and presents the main opportunities in six selected countries. Section 4 discusses lessons learned and cross-cutting areas for further development of rights recognition as a global process. Section 5 provides a summary of the country profiles.