GEORGE TOWN, June 18 - Malaysia can no longer rely on low prices as a competitive advantage, as the low-cost business model limits the ability of small and medium enterprises (SMEs) to offer higher wages, said Entrepreneur Development and Cooperatives Minister Steven Sim Chee Keong.
He said SMEs must improve productivity, adopt technology and move up the value chain to generate higher returns and provide better-paying jobs.
“It is not that SMEs do not want to pay higher wages, but many cannot afford to do so because of the business model they operate in,” the minister told a dialogue session titled “Empowering the Entrepreneurial Ecosystem” at the Penang Economic Forum here today.
Sim said competing solely on prices would place Malaysian businesses in a race to the bottom against lower-cost destinations in the region.
He said Entrepreneur and Cooperatives Development Ministry (KUSKOP) policies are guided by its ABCD framework - accelerating productivity, reducing bureaucracy, improving access to capital and driving market participation. Under this framework, he said, the government aims to help SMEs adopt technology, reduce administrative burdens, and gain better access to financing and new markets.
Sim said Malaysia’s economic transformation must ultimately enable local companies to own technology, products, brands and intellectual property instead of remaining dependent on low-margin activities.
“This is how we create higher-value businesses, retain our talent and allow companies to pay better wages,” he added.
Jointly organised by RHB Banking Group, the Penang Institute and KUSKOP, the forum was held under the theme “Advancing Penang’s Next Growth Story”.
Over 300 participants engaged in discussions on emerging economic opportunities, sustainable financing solutions, talent and scaling strategies, and access to capital markets.
