THERE is a joke making its rounds about an objective question on who is responsible for your company’s digital transformation. Going by this jibe, the right answer is not your CEO or CTO or a big name tech consulting firm, but the “coronavirus”.
This is in clear reference to how the movement limitations in place as a result of the virus outbreak has forced many companies to embrace going digital to keep their businesses afloat.
But if it has taken the coronavirus (Covid-19) outbreak to realise the importance of your business going digital, then you are clearly behind the curve.
By now, your business no matter how small, should have embraced e-commerce or increasing digital usage, have sufficient levels of cybersecurity, have some level of data analytics and be toying with some artificial intelligence to better serve your clientele.
You should also have a good understanding of the possibilities that 5G networks are going to bring about when they are fully implemented.
Apart from the productivity gains digitalisation can bring, there will be SMEs that have failed to do this. The reasons are best known to themselves but those companies might be seeing a decline in their business prior to Covid-19. Without proper technological investments or through old-fashioned market forces, some have been locked out of a global supply chain that has increasingly been reliant on innovations to get their products out to market more efficiently.
The call by the SME community for more financial support is correct. Cash flow constraints in this unprecedented crunch will nudge them out of business.
But one must realise that SMEs are in varied industries and are at vast different stages of competencies. Not all would have been going to thrive with or without the Covid-19 onslaught.
Coupled with the fact that Malaysia isn’t exactly the most affluent of countries, running a fiscal deficit for a long time, then taxpayer money going towards helping SMEs ought to be directed at those that are already on a strong footing and are able to thrive after this crisis.
They would be in a good position to gain the market share made vacant by SMEs who were on their way out of business anyway. In other words, there needs to be the most efficient allocation of our limited resources.
True, much money has been given to the informal sector who are the worst off. This is a desperate attempt to keep them out of abject poverty and this needs to be done because they make up a significant portion of the workforce.
A total of RM3.3bil has been allocated by Bank Negara for SMEs under the Economic Stimulus Package 2020 (PRE 2020) to help them sustain their business operations and employment.
But the SME community has shot back, claiming this isn’t enough. True, SMEs remain the bedrock of our economy. If they are hit, entrepreneurship will nosedive and so will employment and other negative knock-on effects. But help must be for those that are deserving and not asunder.
If a SME was already declining and having all sorts of pressures that kept their bottom line bleeding for some time prior to this crisis, the financial assistance just to keep inefficient SMEs afloat will be a waste of money.
Furthermore, the conditions placed on companies eligible for a wage subsidy for their workers is appropriate.
More help needs to go towards the productive and performing SME base in Malaysia. But it should be done judiciously, directed at the cream of the crop, who had the strong foundations to face the digital economy that we are in. Putting good money to bad business would be a waste of precious resources of the country.
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