SMEs still not ready for fourth industrial revolution


KUALA LUMPUR: Small and medium-sized enterprises (SMEs) in Malaysia are not quite ready for the fourth industrial revolution (IR4.0), which could spell trouble as the world advances further.

Out of some 50,000 SMEs in the country, only 300 have signed up for the evaluation for the selection process for a complimentary readiness assessment (RA) by the International Trade and Industry Ministry (Miti).

Miti has a budget of RM15mil to conduct the RA for 500 qualified SMEs.

Deputy International Trade and Industry Minister Dr Ong Kian Ming said many CEOs do not even know where to begin when the IR4.0 topic pops up.

“They don’t know which aspect of IR4.0 they should concentrate on, so Miti has developed a sophisticated programme whereby we do it for free for 500 SMEs.

“We will send our own assessors that we have trained to evaluate the different components of IR4.0 that these companies should be involved in and come up with a matrix and framework they should focus on,” he said during the Perdana Leadership Foundation CEO Forum 2019.

To Ong’s surprise, there were even companies that asked him if they should hire IT experts just to fill in an online survey form for the evaluation.

“I think we still have a lot of work cut out for us to spread the message out there.

“I don’t think it’s worrying, but I think it shows the sort of challenges that we are facing because many SMEs still don’t know about IR4.0. So, it’s now even more urgent for us to do more outreach in different ways,” he said.

Although Miti has covered each state with its outreach programmes, it has identified several locations for its second round, such as Batu Pahat, Kluang, Taiping, states on the east coast, Sabah, Sarawak and several other areas with industrial estates in Selangor.

The RA will kick off in the second quarter this year and Miti will hold the outreach efforts concurrently.

The subsequent process after the RA is what will really give a boost to the economy, as far as Malaysia is concerned.

“Looking at specific areas that we have recommended, this is where the service providers come in.

“This is very important for the new economy that can grow out of IR4.0 because not only do we want to improve the manufacturing sector in terms of processes but in terms of service providers, this is where a lot of the local players can come in,” Ong said.

He added that SMEs were focusing on cost-saving measures and would look for local service providers that could assist them in terms of data analytics and Internet of things (IoT).

There will not be any disbursement of funds to the SMEs during the RA. Funding, if any, will be from the business intervention part, where SMEs that have gone through the RA can apply for a 70:30 funding (70% government, 30% self).

Those who have undertaken the RA can also opt to fund themselves entirely via internal funding.

It is, of course, not all negative, as Miti pushes SMEs to embrace IR4.0.

Ong shared how he had linked a dates manufacturing company in Kelantan, which exports to Middle Eastern countries, to a semiconductor vision inspection company in Penang.

“One of the problems faced by the dates manufacturer was how to efficiently process to identify dates that are not rotten from within.

“So I introduced this company to the vision inspection company. If they can do it for semiconductors, maybe they can come up with a solution for dates,” said Ong.


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