Tuesday, November 2, 2010

SMEs: M'sia facing same problem Taiwan did

I have attended a number of small and medium-industry seminars and noticed that the participants are mainly concerned about the shortage of foreign workers and the availability of SMI loans.

No doubt the labor shortage and cash liquidity are two of the major issues that need to be addressed. However, just addressing these two issues alone does not suffice.

We must remember that the world is not static but dynamic; countries where our foreign workers originated from such as Indonesia and Vietnam are now progressing very well and one of these days, they may face a labor shortage as well. Therefore, in the long run our small and medium industries can not totally depend on foreign workers.

The operating environment resembles an ecosystem chain where the survival of SMEs depends on a variety of factors such as social and economic stability and investments from within and outside the country.

The fall in foreign investment capital will definitely have negative impact on the performance of SMIs downstream. Therefore, it is important for us to maintain a conducive environment to attract local and foreign investments.

Recently, the Japanese ambassador to Malaysia, Masahiko Horie. mentioned that the Japanese companies in Malaysia were very concerned about the shortage of labour and knowledge-based skilled worker in Malaysia.

If the situation persists, they may relocate the labor-intensive plants to some other countries.

We must not take this unhealthy phenomenon lightly and hopefully the relevant government agencies will arrange a dialogue with them to identify their needs.

Malaysia is now facing the problem that Taiwan SMI had faced at the turn of 20th century.

At that time, Taiwan's small and medium enterprises were very much dependent on foreign workers. I remember that my friend went all the way to Taiwan to become a helper to a vegetable seller in a market.

In the year of 1990, Malaysia's economy has greatly improved and those from Malaysia who worked in Taiwan began to return back to work in Malaysia 'aided' by the tough measures against the illegal foreign workers in Taiwan.

In order to survive, the government and the SMEs in Taiwan took a series of effective measures to adjust themselves to the change which included relocating labour intensive industries to mainland China, the adoption of automation and an efficient work-flow system and changing the attitude of youngsters towards blue-collar jobs through certification programmes.

I think it is high time we should learn from Taiwan's small and medium enterprises on how they tackled their problems from many perspectives.


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