KOTA KINABALU, March 16 (Bernama) -- Despite the successful historical
evidence regarding the development of Small and Medium Enterprises (SMEs) in
Malaysia, the development of the sector in Sabah is surprisingly slower than its
counterparts in the peninsula, say two researchers here.
The number of SME establishments in Sabah are statistically low compared to
the smaller states in the country, said Dr Imbarine Bujang and Afendy Suraip
quoting a 2005 census from the Department of Statistics Malaysia.
They are also yet to be inspired by the wave of changes introduced by the
government for the past few decades, they said in a paper presented at the
Universiti Teknologi Mara (UiTM)''s Sabah Second Economic Conference 2011 here
With 24,794 SME companies, Sabah took the 10th position in terms of the
number of SME companies from the list of the 14 states, they said when
presenting their paper entitled "Malaysian SME Development: Discovering Factors
of Development in Sabah".
Considering Sabah''s total population of 3.14 million and as the second
largest state covering 73,997 sq km, Sabah can generate a larger number of SMEs
and revenues and be as competitive as Sarawak, they said.
"Although it''s in the heart of BIMP-EAGA - a region of 55 million population
which offers abundant resources for trade and shipping - the state is performing
poorly in both SME establishments and revenues aspects compared to other states
which are smaller and lower in population.
"Generally, this situation should not occur as a high population in an area
would provide necessary labour supply and also at the same time, market demand
with the existence of appropriate product and services provided by small and
medium enterprises," they said.
The two researchers concluded that government support was the most
influential factor for the SMEs development based on the study done in Sabah,
and it was also significantly related to the confidence and success of SMEs.
"It proves that the government support may come in handy, and we also
believe that the enterprises'' weaknesses such lack in business skills and
financing might be abolished by the support from the government."
Technology was the second most important factor determining the success of
enterprises as their adaptation improved productivity and quality of production,
while reducing costs and production time.
Among other barriers the paper highlighted was competition from foreign
or large firms.--BERNAMA