Exporting for Growth: The SMEs' Perspective

9 November 2022
  • Malaysia’s small and open economy, with her active participation in bilateral and multilateral trade agreements that promote freer trade and encourage more exports, is a win-win for the Malaysian economy and businesses.
  • Boosting international trade is crucial to balance the country’s growth engines, increase output and investment as well as generate employment. Exporting businesses gain strength and resilience when their products and services gain acceptance abroad.
  • Small and medium enterprises (SMEs) are the backbone of Malaysia’s overall economic and industrial development: In 2021, SMEs accounted for 97.4% of total business establishments; contributed 37.4% of total GDP; 9.4% of total exports of goods and services; and 47.8% of total employment.

  • SMEs are predominantly domestic-market orientation, given their size and nature of principal activities. Given the crowded domestic market, SMEs must make their way out by exporting their businesses. With the utilisation of a digital platform, cross-border trades and competition have been intensified as companies find that they are no longer confined to their local base market. There is a bigger market outside Malaysia.
  • There are various challenges hindering SMEs businesses from exploring and making inroads in international markets. These include limited access to finance and resources, advanced technology and management skills, which restrict their growth and competitiveness against large and multinational enterprises. Some companies also lack market savviness, business culture and an understanding of the trade rules in new markets.
  • While the Government has implemented various facilitation programs and funds to enable SMEs’ exporting, they are often not having the confidence, know-how and market savvy enough to reap the benefits from manoeuvring their way around new markets. While both RCEP and CPTPP offer opportunities for trade and services, they add another layer of competition for domestic SMEs in international markets.
  • This report aims to focus on SMEs’ contribution to exports. It identifies key issues and constraints faced by SMEs, various development programs, and funds to assist SMEs in their export efforts as well as to explore the products and services that SMEs have the potential to export.

  • Given limited publicly available data, our analysis is based on the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) Malaysia’s Business and Economic Conditions Survey (M-BECS) on “Tapping SMEs’ Potential to Go Global” conducted from 26 April to 30 June 2022.

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