PROPOSAL:PROPOSAL:SME CLUSTERSME CLUSTER

Noor Hazlina Ahmad, PhDNoor Hazlina Ahmad, PhDSchool of ManagementSchool of ManagementEmail: Email: hazlina@usm.my

Date: 7Date: 7thth May 2009 May 20091

ContentsContents

Definitions of SMEsDefinitions of SMEs Unique Features of SMEsUnique Features of SMEs Importance of SMEsImportance of SMEs Some Facts and FiguresSome Facts and Figures Current SME Projects @ SOM & GSBCurrent SME Projects @ SOM & GSB Transdisciplinary Agenda: Avenue for future Transdisciplinary Agenda: Avenue for future

SME-related researchSME-related research Towards SME SustainabilityTowards SME Sustainability Triple Bottom Line Agenda of SMEsTriple Bottom Line Agenda of SMEs Some Neglected IssuesSome Neglected Issues Potential SME ResearchPotential SME Research

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Definitions of SMEsDefinitions of SMEs

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Category Micro-enterprise Small enterprise Medium enterprise

Manufacturing,

Manufacturing-

Related Services

and Agro-based

industries

Sales turnover of less than RM250,000 OR full time employees less than 5

Sales turnover between RM250,000 and less than RM10 million OR full time employees between 5 and 50

Sales turnover between RM10 million and RM25 million OR full time employees between 51 and 150

Services, Primary

Agriculture and

Information &

Communication

Technology (ICT)

Sales turnover of less than RM200,000 OR full time employees less than 5

Sales turnover between RM200,000 and less than RM1 million OR full time employees between 5 and 19

Sales turnover between RM1 million and RM5 million OR full time employees between 20 and 50

Unique Features of SMEsUnique Features of SMEs

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have an owner/manager with few generic business skills or a particular technical expertise

have personal assets committed as security for the business

operate flexibly rather than on a strict observance of regulations

have a vision and outlook that is bounded by the skills and experience of the founder/owner and tight resource constraints

operate in provincial areas, be a key part of the social fabric of the community

Importance of SMEsImportance of SMEs

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The significance of SMEs is associated primarily with their role in stimulating economic growth.

Other significant contributions of SMEs:

Because they are labour-intensive, SMEs create employment opportunities.

SMEs enhance regional development and create more equitable income distribution due to their location and ongoing expansion throughout the broader community.

Importance of SMEs Importance of SMEs

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SMEs play a vital complementary role in relation to larger firms--as suppliers and distributors.

SMEs serve as a training ground for developing the skills of workers and entrepreneurs.

The presence of SMEs curbs the monopoly power of larger firms and provides the structure of the economy with greater flexibility.

Thus, a country can reduce its vulnerability to financial crises by strengthening its SMEs.

Some Facts and FiguresSome Facts and Figures

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A total of 99.2% (552,849 companies in operation) of all manufacturing and service businesses are SMEs and the majority of SMEs (86.6%) are in the services sector.

Employment- SMEs accounted for 56.4% of the total workforce.

GDP-SMEs contributed 33% of the total output.

Total Export-SMEs contributed 19%.

(Ref: SMIDEC 2009)

Contribution of SMEs to Gross Domestic Contribution of SMEs to Gross Domestic Product, Employment, and Export by Product, Employment, and Export by

Sector in 2005Sector in 2005

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Composition of SMEs in MalaysiaComposition of SMEs in Malaysia

Based on Census on Establishments and Enterprise 2005, out of 99.2% of SMEs, the services sector comprise 474,706 (86.6 per cent), followed by 39,376 (7.2 per cent) in the manufacturing sector and 34,225 (6.2%) in the agriculture sector.

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Contribution of SMEs in Services Sector, Contribution of SMEs in Services Sector, 2005 2005

*Health include hospital, medical, dental and veterinary services, herbalist, homeopathy and foot reflexology

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Contribution of SMEs in Manufacturing Contribution of SMEs in Manufacturing Sector, 2005 Sector, 2005

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Contribution of SMEs in Agriculture Contribution of SMEs in Agriculture Sector, 2005 Sector, 2005

Current SME Projects @ SOM Current SME Projects @ SOM & GSB& GSB

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GOVERNANCE FINANCIAL MARKET BASED RESEARCH

WORK VALUES

International Financial Reporting Standards

Preventive Measures Corporate Social

Responsibility Quality Service Delivery

Financial Model Financial Structure Financial Performance Islamic Banking

Key Success Factors Sustainable

Development Safety and Health

SME - BUSINESS SOLUTIONS

CONSUMER MARKET BASED RESEARCH

TECHNOLOGY MANAGEMENT

INTERNATIONALIZATION

Internet Marketing Perception Analysis

SSME Time Series Modeling E-Business Adoption

Internationalization of SME

Titles of SME projects @ SOM Titles of SME projects @ SOM & GSB& GSB

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A Study of Top SMEs in Malaysia: Key Success Factor vs Government Support Program

What CSR programmes are relevant for SMEs that will influence their success and sustainability?

Womens’ Participation in Sustainable Development: SME’s Entrepreneurship in Ecotourism for Value Creation Services

Effective Implementation of Occupational Safety and Health Acts Requirements in Malaysian SMEs

In Search of a Win-win Approach to SME Lending: Building a Business Financing Model for SME Business Development

Financial Structure and Performance of SMEs in NCER Financial Performance and Stability of SME through Islamic Banking: A Study

on NCER Locally produced food products: Perception Analysis: Connecting Technical

Quality Parameter with Consumer Preferences The Evolution and Complexity in the Supply Chain with a Focus on Demand

and Supply

Titles of SME projects @ SOM Titles of SME projects @ SOM & GSB& GSB

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Internet Marketing: Building Competitive Advantage in E-Business Adoption among SMEs

Social Capital and Internationalization of Malaysian SME Compliance with International Financial Reporting Standards for SMEs Corporate Social Responsibility and SMEs Quality Service Delivery of Non-Audit Services and Compliance with

International Standards on Quality Control (ISQC) of SMEs Practitioners Determining Capability and Capacity of SME in Using and Providing e-

Business to SMEs in NCER Internal Control, Risk Management, and Implementation of Petty Crime

Prevention Measures in SMEs Antecedents and Outcome of Managerial Skills in Service-Based SMEs: An

Exploratory Study on SSMEs Discipline Time Series Modeling of International Tourists Arrival in for Prediction and

SME Business Planning e-Business Adoption in Malaysia: Improvement in Supply Chain for SMEs Technology Adoption Among SMEs: Towards an Integrated Model

Transdisciplinary Agenda: Transdisciplinary Agenda: Avenue for Future SME Avenue for Future SME

Research Research

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Transdisciplinary research is crucial in the context of sustainable development research that emphasizes on the integration among SMEs, the society, and the environment in which they operate.

Evidently, the fields of SME and entrepreneurship have lagged behind other disciplines when it comes to including sustainable development concepts in their research agenda, especially in the context of emerging economies (Shaper, 2002).

Towards SME Sustainability: Towards SME Sustainability: A Transdisciplinary AgendaA Transdisciplinary Agenda

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Need to solve the equation between economic growth and SME competitiveness on one hand, and social and environmental issues on the other hand.

HOW??? Encourage fusion between sciences and arts to meet the economic, social, environmental agenda of SMEs— the principle of “THE TRIPLE BOTTOM LINE”.

Triple Bottom Line Agenda of Triple Bottom Line Agenda of SMEsSMEs

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ECONOMIC

SOCIAL ENVIRONMENTAL

Transdisciplinary research to

generate successful and

sustainable SMEs

A concept that acknowledges the importance of economic, social, and environmental agenda (Colbert & Kurucz, 2008).

SOM/GSB-study on the behavioral

aspects, perceptions, as

well as the practices of SMEs in regards to the 3

bottom lines…

Some neglected issues…Some neglected issues…

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SMIDEC and other government agencies:- concern on financial assistance and other direct support mechanism to assist SMEs.-focus on operational solution.

Neglected Issues?social and environmental issues, culture (changing the mindset), globalization, sustainability etc.

HOW to tackle these issues…encourage transdisciplinary research on the following research areas…

Potential SME ResearchPotential SME Research

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1. Economic Agenda

The impact of macro-economic factors on SMEs The role of engineering & computer technology Developing broader markets for rural

manufacturing and processing SMEs The role of local government in local economic

development Leadership, social capital, and succession

planning Developing financial literacy in SMEs Downsizing/rightsizing and the effects of

economic recession

Potential SME ResearchPotential SME Research

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2. Social Agenda

Corporate Social Engagement (CSE) SMEs and social inclusion Social constructionism and SMEs Ethical and socially responsible SME

entrepreneurs Social entrepreneurs Ethnic and women SMEs Workforce issues in SMEs Safety and Health issues

Potential SME ResearchPotential SME Research

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3. Environmental Agenda

SME ecopreneurs Green SMEs Energy Conservation in SMEs Waste Recycling Activities in SMEs Use of Renewable Energy Resources in SMEs SME Environmental Management Storage, Treatment, and Disposal of Toxic and

Hazardous Wastes in SMEs

THANKTHANKYOU…YOU…

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