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By Farahdiba Abdullah

Small and Medium Enterprises (SMEs) are the key engine for a country’s innovation growth especially in digital transformation era. SMEs could be on track to contribute 42% to national GDP, 25% of Malaysia’s exports and 62% employment, projected by SME Corp Malaysia in the year 2020.  However, The adoption of ICT by SMEs in Malaysia is reportedly at just around 10% whereas developed countries are easily around 50%. The key problem is digital adoption has been very low and the percentage of SMEs owners who believe in ICT is relatively small. According to Ministry of International Trade and Industry (MITI), there are several factors of SMEs dilemma adopting technology:

SMEs Dilemma Adopting Technology

SMEs especially in manufacturing should be worried as low labor costs will not always benefit them because limiting their preparation for the coming Industry 4.0. Additionally, they don’t leverage on technology in their order fulfillments, supply chain management and customer relationship management when it comes to back-end business processes. To this end, SMEs need to educate themselves what is relevant to them to implement digital strategy very seriously. The government also needs to give them business cases to identify the right pain-points and tailored solutions as these are the only way to force digital adoption onto SMEs. It sounds extreme but it may be the only way forward and onward for Malaysia.

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