Adapting to new technology and innovations is a must in order for SMEs to remain competitive. This is becoming harder and harder as the pace at which new technology is being developed is getting faster.

Malaysian Finance Minister Lim Guan Eng said businesses that are unprepared risk being left behind by its competitors equipped with the right culture and expertise in providing products and services in complex and hyper-connected market.

“Despite its large contribution to the economy, SMEs face a challenging business environment. Introduction of new technology, especially relating to Industry 4.0, is disrupting various SMEs’ model so thoroughly that they have no choice but to change”, said Lim in his opening speech at the Malaysia SME Business Summit. He also mentioned that SMEs are expected to contribute up to 41 per cent to the Malaysian GDP by the year 2020.

Citing a 2017 report from the International Data Corporation (IDC), Lim said that 50 per cent of the Forbes Global 2000 companies will have businesses based on products and services that are digitally strengthened or enhanced.

“This highlights the fact that digitalisation is an essential ingredient for success, and it would not be too long before digitalisation become ubiquitous in our daily life”, he said.

In an effort to provide further support for developing SMEs, Putrajaya has launched several new initiatives aimed at helping businesses begin the digital transformation process.

One of these initiatives include a new guarantee scheme worth RM2 billion through Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP), which serves as a helping hand for SMEs to adapt to IR4.0. Other such funds involve RM1 billion Sustainable Development Financing Fund and the RM1 billion Tourism Infrastructure Fund.

Lim has also been quoted saying the Federal administration had also provided a RM3 billion Industry Digitalisation Transformation Fund to help speed up the adoption of new tech among Malaysian businesses and support new methods of fundraising such as crowdfunding and peer-to-peer.

Lim also made note that the competitiveness of the Malaysian market allowed the country to benefit somewhat from the US-China trade war, rather than suffering from it.