Article

SME Innovation: 10 Priorities for Support Post-COVID-19

Biz Advisory
Finances
Insider Insights
Management
Marketing & Branding
Sales

11 Aug 2022 • 2 min Read

In these challenging times many SMEs have taken the necessary immediate steps to stem the impact of this global pandemic by finding creative ways of working and also enhanced practices of meeting their customer's needs with minimal impact to their bottom line. All this and more were done keeping in mind the need for social distancing and adhering to at times very vague standard operating procedures (SOP’s).

 

Now that the short-term challenges have been addressed. There is a need for SMEs to lobby for long-term restructuring and support to drive sustainable long-term growth via a well-functioning innovation system. 10 areas of focus that will drive this objective are: 

 

SMEs need to Think Big


Small businesses play a vital role in ensuring economic growth, job creation, and social integration. But as the economic headwinds triggered by the pandemic pick up, the SMEs will need to be more ambitious in order to survive and grow. One way to foster this is to explicitly identify ambition as a key criteria for SME support, thereby enabling the most promising companies to reach their potential by acting as feeder companies to local and international Multinational Corporation (MNC’s) alike.

 

Diversification of offerings and Talent Management 


In today’s turbulent times, building SME resilience through capacity development is vital. Policy instruments should focus on building capabilities, forging strong teams and accessing both best in class domestic and foreign talent. This could be done through (digital) talent matching platforms that connect businesses with specific sets of skills in specific countries, such as the ‘eRezeki’ programme by MDEC. 

 

Mind the Innovation Gap


Not all SMEs are created equal, and instruments such as PENJANA and eBerkat for innovative funding support have acknowledge this. In regions with fewer innovative SMEs, the focus should be on stimulating the development of new innovative companies, which should be led by the SMEs themselves, which will ensure an optimal level of competition and value for all parties on the value chain. 

 

SMEs who are ahead of the curve may lean on the likes of SME Bank for more direct financial support if need be. However for this to be a mutually beneficial arrangement the selection pool for public funding should be large enough to maintain an optimal level of competition and return for all parties in the ecosystem.

 

Focus on Collaborative Ecosystems

 
The power of large companies  to help small and young companies to scale up must not be overlooked. Innovation support organisations should acknowledge this ecosystem dimension in their innovation support models, and create opportunities for knowledge-sharing and cross-pollination of ideas. Vendor development programmes championed by the likes of PETRONAS and TM should be revisited to ensure enhanced upward and cross collaboration among all the parties in the ecosystem.

 

Simplicity 


Many support initiatives are too complex and inaccessible to be useful to SMEs. Addressing this must become an urgent priority. Co-creation is one way to achieve this, with support service systems designed with and implemented for the client. Unifying disparate support services under one platform with a simple interface that minimises the need for data inputs and maximise information sharing will drive SME adoption, leading to better outcomes.

 

Bring in Private Sector Funding


The gap between the finance available to SMEs and the finance that they could productively use remains a major barrier to the transition from start-up phase to scale-up phase. As this challenge cannot be met by governments alone, new instruments and cooperation structures for raising matched funding from support actors from the public and private sector should be leveraged to increase investment capacities. Private initiatives such as funding societies and other comparable P2P funding needs to be brought to the forefront especially for SMEs who are not in the “known” of such sources of funding.  

 

Be Predictable


Certainty and predictability are key in helping SMEs to build economies of scale, innovate and limit risks. In times of economic volatility, SMEs need to lobby for stable policy mechanism to be put in place, which is ideally disconnected from sudden political changes and short-term government needs, this will create an element of trust in the eyes of both domestic and foreign investors looking for long-term stable environments for their innovation investments.

 

Coordination 


With resources for SMEs often spread over various support organisations and ministries. SMEs need to ensure set aside sufficient budget and personnel to interface with the different agencies. Concurrently there needs to be a desire to lobby for new policies and instruments to prevent bottlenecks in implementation by the various agencies.

 

Data and Intelligence 


Disruptive and breakthrough SME innovations to respond to social, environmental, and economic grand challenges such as climate change and resource efficiency, demographic change, clean energy, and inclusive societies need to be brought to the forefront. 

 

In order to ensure they obtain the due support, new data will need to be collected and new methodologies will need to be developed to ensure these SMEs are capable of delivering the desired outcome. SMEs in these  green fields will need to co-create with the relevant agencies the  agile strategies to monitor progress which will  ensure the desired end goal is obtained.

 

Skill Up the Support Ecosystem


Policymakers often have limited experience of the real world of small business, leading to inadequate or inappropriate interventions. This should be addressed through face-to-face contacts between the SMEs and the policymakers team in order to gain a better understanding of the SMEs needs, as well as practicable training and development within innovation support organisations.

 

Even before COVID-19, there have been gaps in relation to the optimum pathway for SMEs and the necessary support structure required for them to move up the value chain.  Furthermore landscape of agencies and government entities in Malaysia was in need of simplification and restructuring. With policymakers now starting to think about the role public support should play in the renewal of the economic structure in the wake of the pandemic, it is imperative than SMEs collectively take up this unprecedented opportunity to create a better, stronger system, which will support SMEs to innovate their way out of this crisis.

How did you find this offering?

Community Discussion

0 comments