The global economy is facing an uncertain outlook and Malaysia, predicted to grow at a slower pace in 2023, is not immune from this forecasted economic downturn. In turn, this has placed the government and key economic policymakers in the spotlight for measures to counter the projected slowdown in economic growth. The public tends to expect mega infrastructure projects, major business expansions, or even attracting foreign investors as the solution to the economic crisis.
However, I believe in the phrase that even the smallest person can make a big difference. Most of us still underestimate the ability of micro, small, and medium-sized enterprises (MSMEs) to fuel economic growth. In reality, entrepreneurship is an important and strategic component in driving Malaysia towards becoming a developed and prosperous nation by 2030. With MSMEs accounting for almost 98% of the entire Malaysian business landscape, keeping this going strong is a vital ingredient for a healthier market economy.
Despite their ‘S’ and ‘M’ sizes, MSMEs play a very large role in generating positive economic and social development! Their sheer market share makes for greater job opportunities, while their presence in both urban and rural areas drives more inclusive growth across all socioeconomic levels — even if they have fewer resources and less exposure than larger businesses.
With MSMEs’ significant contribution to the economy, supporting MSMEs has emerged an even stronger priority, especially in a challenging time like now. The Malaysian government is already implementing measures to strengthen the potential of MSMEs. Under the 12th Malaysia Plan, the government aims to boost entrepreneurs’ capabilities through technology and help them digitise more effectively.
Beyond national initiatives, however, there is still much more to be done on a community and societal level — as we too have an equal part to play in supporting the economy through MSMEs.
Small businesses, big ripple effect
The national economy improves only when there is a healthy flow of money through all units of transactions. This is because every purchase creates a ripple effect in the economy, be it business-to-business or business-to-consumer.
Put simply, buying locally is the starting point for a healthy cycle that has big implications: Malaysians making the conscious decision to purchase from MSMEs means that their money will go directly towards these small, independent businesses — and back into the local economy.
As a direct result, MSMEs, bolstered by this constant supply of funds, are in turn more likely to purchase goods or services needed from other local vendors and suppliers, hire a local workforce, and more able to upgrade their business for a stronger market presence as well as to better service local communities.
Keeping every ringgit spent on local MSMEs recirculating within the economy is thus especially crucial. This is also where the strength of digitising comes in: using the reach of digital platforms to highlight the uniqueness of Malaysian-made goods and amplify the presence of these businesses.
For instance, an online platform like The Artisans Haven, which serves as a collective e-commerce platform for Malaysian artisans, enables MSMEs to ride the online shopping wave while promoting their handicrafts to a wider audience.
This community of business owners ranged from the orang Asli artisans of East Malaysia to artistic urbanites looking to sell their wares online during the lockdown. With the help of The Artisans Haven’s affordable e-commerce platform, many of these small-to-micro enterprises were able to increase their monthly income and benefit from the pro-bono business and digital marketing expertise and services provided by the platform’s founding team.
This is proof when support is given to small-time entrepreneurs and artisans, their average household income goes up from three digits to four or more. Which then resulted in having more working capital and being able to produce more, spend more, employ others and create a new job ecosystem.
Change starts small and local
According to the Department of Statistics, there are one million households in Malaysia that are in the informal sector, contributing 10% of our country’s workforce. In fact, the young generations are exploring entrepreneurial pathways, turning their hobbies into a source of income and choosing to be independent artists. However, it can be tough to grow the business without the right resources and network.
With the right support and environment, MSMEs have the potential to become the backbone of any healthy economy; they drive growth, provide employment opportunities, open new markets, and pursue innovation. MSMEs also provide the economy with a healthy supply of new skills and ideas, and make the marketplace more dynamic.
In an incredibly competitive commercial landscape, I believe that with the advent of digital platforms and greater awareness on the strength of MSMEs, the Malaysian community should make more conscious decisions to support our local small businesses. As the saying goes: change starts small — and in this case, change starts local!