- SMEs face multiple challenges in a world going full-on digital
- Digital transformation will improve lifestyles, enable independence, sustainability
By Dr Rais Hussin June 22, 2020
Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.”
SME’s, more than any other business segment, are in for a big digital transformation — whether they like it or not — and therefore are an essential participant in Malaysia 5.0.
Malaysia 5.0 outlines a problem-solving approach to society’s challenges and problems through the deployment and implementation of Fourth Industrial Revolution (4IR) technologies which integrates both physical and digital environments.
It stems from the term “Society 5.0” which describes the next stage of the evolution of societal communities, following the hunting society (Society 1.0), agricultural society (Society 2.0), industrial society (Society 3.0), and information society (Society 4.0).
It was conceived of by Yuko Harayama, who advised the Japanese cabinet on matters of innovation, with the objective of empowering people with 4IR technologies, especially those left sidelined by society and the economy.
I would like this focus of Society 5.0 to underpin MDEC’s strategy so that we can deliver such solutions to Malaysians across all economic classes, and especially SME’s hit by the Covid-19 crisis, in facing the challenging economic environment ahead.
Digital transformation, from e-commerce solutions, training and education, and integration onto common platforms, will improve lifestyles and enable independence for those that implement them proactively.
At the same time, the big data revolution will empower SME’s to fully flex its considerable influence in the economy. Today they face multiple challenges such as lack of business connections, limited awareness of technology, lack of access to funding, education and training, and poor internet presence in a world going full-on digital.
According to the World Bank, the majority of the global economy consists of small businesses and startups. Of all these businesses, it turns out only a third of them actually have employees. Mostly they are self-employed individuals operating in the informal or grey economy (pic above is a street food vendor selling a popular Malaysian dessert, cendol).
Malaysia 5.0, properly implemented, can directly address their inclusion, access, performance and growth through 4IR tools such as Fintech, Blockchain, Analytics and AI. Digitalization offers new opportunities for SMEs to participate in the global economy, innovate and grow.
MDEC will play its part in this ecosystem by offering a “sandbox” for SMEs to experiment with new technologies and stress test them before implementation so that the risk of failure is reduced. The result is greater sustainability for those SMEs which innovate.
In this way, SMEs will play a critical role in strengthening productivity, delivering more inclusive growth, and adapting to the major transformations of our time.
Enabling SMEs to innovate can have a considerable economic and social impact, reduce the persistent gap with large corporations, and equalize income distribution — all desirable goals in the digital age, or indeed any age.
Dr Rais Hussin is the Chairman of MDEC, which is leading Malaysia’s transition to a Digital Economy