Malaysian Smes Development: Future and Challenges on Going Green

Malaysian SMEs Development: Future and Challenges on Going Green

Summary:

This article examines the development of SMEs in Malaysia, challenges and the importance of green practices among SMEs which is play a vital role in the nation growth. Malaysian SMEs contribute to the largest business establishment in Malaysia as 90% especially in service sector and majority of them are in micro size establishment. Based on SME survey by SME Corp. Malaysia, the challenges that hinder SMEs from expanding or investing were high cost of raw materials (49%), high initial cost of investment (31%) and shortage of skilled labour (29%). About 74% of respondents cited that the current rising cost led to an increase in operating cost of their firms, which require a bigger amount of loans to operate their current business operation. Besides that, many challenges facing SMEs in a globalised environment such as lack of financing, low productivity, lack of managerial capabilities, access to management and technology, and heavy regulatory burdens. There is a boost in small and medium enterprises (SMEs) showing interest in the implementation of ISO 14001 Environmental Management System (EMS). SMEs are keen on environmental impact and simultaneously determined to gain a variety of benefits through the implementation of ISO 14001 EMS. The adaptation of green practices may well promote the positive development of employees and also enhance productivity and profitability of SMEs for long term survival. In general, the benefits of EMS can be classified into internal and external. Internal benefits include improvements in corporate processes having positive effects on operational and people issues. Nevertheless, external benefits have greater effects on customers and society in general.

Opinion:

I think the most interesting aspect in this article is about the challenges faced by SMEs based on its owner/ manager because they play important roles in running the company. From the perspective of the owners / managers of SMEs, they do not see environmental issues, or the need to act in an environmentally responsible way. Some have an overall lack of knowledge about effective environmental, sustainability issues or of specific practices that they can implement. They lack the expertise and confidence of doing something that is not the core business, either perceive that their business has no impact on the environment or consider the impact to be small and therefore insignificant. The final deterrent is that they see environmental responsibility as too costly.