Why do Malaysian SMEs lag in export contribution despite GDP share?

Question

Accepted Answer

Malaysian SMEs' Export Lag Despite Significant GDP Contribution

Despite contributing a substantial 40 per cent to Malaysia's Gross Domestic Product (GDP) and constituting 97.2 per cent of all registered businesses, Small and Medium Enterprises (SMEs) in Malaysia have a relatively modest share in the nation's export market. In 2022, while Malaysia's total exports reached RM1.55 trillion, the contribution from the SME segment amounted to RM169 billion, representing only 10.9 per cent of the overall export value. This disparity highlights a significant gap between the domestic economic impact of SMEs and their engagement in international trade.
Limited Participation in Global Trade

The current export contribution of Malaysian SMEs, while appearing substantial in absolute terms at RM169 billion for 2022, is considered small in proportion to the nation's overall export performance. This indicates that a large majority of Malaysian businesses, despite their significant role in the domestic economy, are not actively participating in or benefiting from global markets. The challenge lies in understanding the underlying factors that prevent these numerous SMEs from translating their domestic economic strength into export success.
Factors Hindering Export Growth

While the provided information does not detail specific hindrances, the relatively low export participation rate suggests that Malaysian SMEs may face various challenges in venturing into international markets. These can generally include issues related to market access, understanding foreign regulatory environments, logistical complexities, financing for export activities, and a lack of international marketing expertise. Overcoming these barriers is crucial for enhancing their global competitiveness.
Matrade's Role in Empowering SMEs

In response to this challenge, the Malaysia External Trade Development Corporation (Matrade) has introduced initiatives like the Digital Trade Platform (MDTP). Launched in July 2022, this AI-powered platform aims to maximise Malaysia's export potential by assisting local SMEs in expanding their businesses globally. The MDTP has already shown promising results, exceeding its five-year target in less than a year by recording over RM100 million in transactions and onboarding more than 1,200 SMEs, with an inventory of approximately 15,000 stock-keeping units. The platform has also successfully attracted international buyers from numerous countries across diverse sectors, underscoring its potential to drive greater SME participation in exports.

Reading history

Hide →

This history is cleared when the page is closed.

Why do Malaysian SMEs lag in export contribution despite GDP share?

Loading

Was this article helpful?

Helpful

Not helpful

Report an issue

1

0

0

Share with friends