**BUSINESS OPPORTUNITIES FOR TECHNOPRENEURS IN
STRATEGIC INDUSTRIES – AN EFFORT TO STRENGTHEN
BUMIPUTERA ENTREPRENEURS
Dr. Sulaiman Sajilan
UniKL MIAT
1.0
INTRODUCTION
In our effort to overcome threats from the unpredictable global economic environment,
the country has no choice but to increase its competitiveness and productivity. Economic
growth needs to be maintained and driven through participation by private sectors
particularly the SMEs. There are almost half a million SMEs in Malaysia or 99% of the
total registered business entities.
SME is the main contributor in providing work opportunities to more than 5.6 million
workers or 56% of job resources. SME also contributes 19% of the total export value or
32% of Gross National Productivity (GNP) (Bank Negara, 2007). In the year 2000,
89.8% of the companies in the manufacturing sector are SMEs, however, these
companies contributed only 15% of the total output.
The manufacturing sector
contributes only 20.7% of the total export value. A majority of the companies are
involved in manufacturing activities requiring intensive human labour such as in textile,
food, timber and mining industries.
Very few SMEs are involved in intensively high technology manufacturing activities.
Therefore, for this sector to play a role as catalyst for economic growth and to increase
competitiveness level of the country, SMEs should focus on intensively high technology
manufacturing activities (Mustazar Mansur et al. 2005).
SMEs must be developed through intensive use of technologies in order to be more
competitive as being practised by SMEs in Taiwan, South Korea and Japan. Many more
technopreneurs must be developed who are able to exploit information sharing,
innovation and business network besides optimizing the use of R&D investment
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resouces, financial investment and intellectual property protection. These strategies will
enhance the productivity, quality and competitiveness of the SMEs (Peter & Phil, 2003).
In the Ninth Malaysia Plan (RMKe-9), the government gives special emphasis to
development of SME sector othe aspects of infrastructure support development, human
capital, capacity building and increase access to sponsorship and marketing (Sulaiman
Sajilan, 2006). The strategic thrusts outlined in IMP3 as the basis for the development of
bumiputera SMEs are as follows:
•
Strengthening competitiveness of SMEs
•
Competing for international investment opportunities
•
Encouraging the development of SMEs based on technology, knowledge and
innovation
•
Practising the concept of integrated SMEs development, and
•
Monitoring and controlling support services
However, IMP3 has outlined the integration of SMEs with regional supplier network and
multinational companies (MNC) as pre-requisite to the success of the strategic thrusts.
Based on the facts released by MITI, SMEs are facing with various issues hindering the
continuous expansion of their business ventures. Among the main issues are:
•
Market access
•
Improvement in technology, innovation and creativity
•
Financial and sponsorship access
•
Access to information, and
•
Human resource development.
The use of technology innovation is the best choice in SME development for
strategic
industries. Paolo Pratali (2003) found that technology innovation can increase
competitiveness, efficiency, reduce cost and produce products that can satisfy market
needs and clients’ needs.
Therefore
in
2007,
190
programs
with
financial
commitment of RM3.7 billion was allocated to help SMEs build up competitiveness and
technology
capabilities (Utusan, 16 July 2007). Under the Development Financial
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Institutions (DFI) Scheme, besides providing loans at low interest rates, services such as
consultancy, training, start-ups support and R&D commercialization, IT infrastructure
support are also available.
Techno-entrepreneurialship is defined as entrepreneurial or intrapreneurial activities in an
exiting
or a new company operating under technology-intensive environment. An
entrepreneur differs from technopreneur only on the type of business and
products/services they do or provide. A technopreneur business ventures are realized
through exploitation and application based on technology and innovation. They are
willing to take whatever risk to produce innovative products or provide services through
complex technology commercialization processes.
2.0
STRATEGIC INDUSTRY FOCUS
The government has targeted that SME should expand and become the main contributor
to the nation’s economic development. Ten strategies have been outlined to ensure
participation of bumiputera SMEs in the manufacturing sector that is knowledge and
technology-intensive. RMKe-9
gives emphasis on bumiputera technopreneur
development participating in strategic industries. Ministry of Entrepreneur and
Cooperation
Development (MECD) targeted at least 1,000 technopreneur to be
developed in 2006-2010. Priorities are given to development of new products, value
added products, high-technology and tehnology-intensive products providing maximum
impact to the country’s economy. Today,
local
subsector is the key driver to compete
at the global level. Effort should be extended
to other subsectors such as
marine,
automotive,
food
and
aerospace,
beverage
production
biotechnology
and
chemistry.
Clear directions have been outlined to develop more bumiputera technopreneurs. Among
the proactive steps to be undertaken in order to realize the stated objective are:
•
Existence of technopreneur through technology commercialization
3
•
Cooperation
of
universities
with
technopreneurs
through
establishment of science and technology-innovation based
companies
•
Utilization of grant, investment capital and technology acquisition
•
Establishment
of
technology
incubator
center,
technology
competency training
•
Establishment of smart partnership between MNC, GLC and
technopreneurs, and
•
Establishment
of
generation,
distribution,
marketing
and
networking programs
Collaboration of SMEs with public and private sectors is a good approach to ensure
synergy and at the same time uplift competitiveness of local industries. SMEs not only
require capital injection but also technologies.
Strategic industries focus on automotive, aerospace, biotechnology, agroindustry/halal
food,
electronic/elektrical,
information
technology
and
telecommunication,
pharmaceutical and health products, machinery components, oil and gas.
3.0
OPPORTUNITIES OF TECHNOPRENEURS IN SRATEGIC INDUSTRY
3.1
Aerospace and Aircraft Industries
Generally, aerospace and aircraft industries offer many business opportunities for the
technopreneurs. Designing aircraft, assembling parts of aircraft, manufacturing
components and parts, providing flight services, logistics and maintenance, repair and
overhaul (MRO) services are potential business ventures in these industries. Networking
with big players is the main success factor in these competitive and technology-intensive
industries. While establishing networking with Original
Equipment
Manufacturers
(OEM), operators, suppliers in aerospace and aircraft industries is a pre-requisite in
ensuring wide range of business opportunities.
4
.
3.2
Automotive Industry
Automotive industry is one of the largest strategic industries. However, the
implementation of AFTA (Asean Free Trade
Organization) has put a
Agreement) and WTO (World Trade
pressure on the development of the national automotive
industry. Competition from giant companies has caused
problems
to
the
local
automotive industry. At the same time vendor companies supplying components and
spare parts were also facing many problems as a result of lower demand and being
pressured to produce high quality products. The trend today, as a result of the present
technology development, supplier companies are interested to provide maintenance and
after-sale services directly to the clients. This situation provide opportunities for
technopreneurs to be involved in business
after-sale services
ventures such as providing maintenance and
to local and oversea automotive industries. This can be achieved if
the technopreneur has the capability in maintenance and repair technology acknowledged
by automotive supplier companies. Other potential business ventures include production
of components, spare parts and automotive accessories.
3.3
Marine and Shipping Industry
Malaysia has been acknowledged as a maritime nation. This is an opportunity to exploit
the situation by increasing the capability of maritime industry including ship and boat
building for public and military use. Marine and shipping industry in this country has
great potential and promised an encouraging growth performance. Technopreneurs would
have alot of opportunities in the areas of production and installation of electrical system,
communication, machinery (propulsion system), furniture and
interior decoration. In
the areas of naval design/architecture, ship building from aluminium, stainless steel,
composite or fibre
glass, production and assembling of artillery (shipping authorities )
provide wide opportunities to be exploited by the
technopreneurs.
Ship
and
boat
maintenance and repair also has great potential for the technopreneurs.
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3.4
Information Technology and Telecommunication Industry
With the implementation of the Multimedia Super Corridor (MSC), Malaysia has been
successful in developing capability in the ICT industry. Our technopreneurs can
participate in business sectors such as software development and apllication/solution,
business process outsourcing/networking/WIFI, computer engineering (installation of
computer hardware and equipment) as well as maintenance of hardware and software. Ebusiness or business via internet is expanding. An international company known as AL
TEJARI, based in Dubai, United Arab Emerit, is a well-known e-business company
inviting our technopreneurs to participate in this type of business. This acts as ’window’
providing o
pprtunities for our products to be marketted globally. The skills and
creativity of our local people in animation film must be exploited by our technopreneurs
in order to realize the nation’s vision to become a hub in animation film industry.
3.5
Electrical and Electronic Industry
It is a fact that Malaysia is known to be the main producer of electrical goods and
electronic components produced by multinational
ompanies
(MNC).
However,
participation by local companies particularly technopreneurs is very small. In this
industry technopreneurs can participate in the areas of
component
production,
electronic system/hardware, electrical equipment, electronic/avionic equipment and solar
energy equipment. UniKL together with IC Microelectronic Sdn. Bhd. haveestablished
IC Academy with the aim of producing more trained technopreneurs/engineers in
developing integrated circuit (IC) design.
3.6
Biotechnology and Bioprocess Industry
The Biovalley Project launched in 2003 was planned to be a catalyst to the development
of biotechnology and bioprocess
industry. This project was envisaged to be capable
of attracting an investment worth between USD10.5 to USD12.2 billion in
or at least 200 companies would be operating in MSC.
this opportunity to cooperate as
and
2013
Technopreneurs must take
partners with oversea companies having high skills
technology. Business should focus on Agriculture Biotechnology, Industrial
Biotechnology and Healthcare Biotechnology in the production of pharmaceutical
products, bioinformatics, food and cosmetic.
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3.7
Logistic industry
Logistic industry is known as an industry where not many bumiputera
participate. In this aspect
entrepreneurs
technopreneurs will be trained so that they are able to
participate in all subsectors in logistic industry chain.
4.0
ISSUES AND BARRIERS TO TECHNOPRENEURS
We are aware that technology is the main factor in determining degree or level of
competitiveness of a product produced by a company including SME. The use of
technology and innovation is very important especially in the process of production
modernization and factory upgrading, increasing safety level, upgading or improving
product quality, improving operational management and cost reduction, new product
development and efficiency improvement.
Figure 1:
Rajah 1: Ciri-ciri rantaian pembangunan bisnes berasaskan teknologi (Typical
Technology-based Business Development)
Market &
Survey
Study
IP
Protection
Process
Design
R&D
Technology
Demonstration
Technology
Acquisition
Start-Up
Figure 1 illustrates the complexity of the chain characteristics of technology based
business development before any new product can be introduced or commercialized in
the market. The above process requires alot of capital starting with the market study. If
the potential is great , the next step is to develop a prototype followed by tests to
determine the product meets all the standard requirement of the industry. Continuous
development is required until a commersial prototype known as demonstration
technology is produced. Now the product is ready for market and if there is any request
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the next step is to develop start-up company which become the producer and holds the
intellectual property right.
Figure 2. Funds required throughout the process from idea to production
WHERE THE FUNDS ARE NEEDED?
Typical product / process design & development flow
Start-up
Idea
Technology
acquisition
Design
Prototype
Industry standard
compliance
Pre-production Mass production
Product / process
Market survey
design &
& research
development
Intellectual
property (IP)
protection
Demonstration
of technology
Generally, all SMEs have problems to conduct productdevelopment activities because of
the high R&D cost and their limited financial capability. Although MOSTI offers
TECHNOFUND
and agencies such as MTDC, MDEC, SMIDEC and MARA
provide financial facilities for product development the SMEs lack technical know-how
to do so. Therefore, SMEs have to work together with universities and research
institutions to develop new products. This cooperative synergy helps in capacity building.
In the development of start-up companies until mass
production there are many
programs being sponsored by financial institutions such as SME Bank, Bank Rakyat and
Bank Pertanian. Figure 2 shows the financial requirement of the whole process from
idea to production.
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The SMEs must ensure that their new products can be marketed, maintain in the market,
extend market niche and of course must be profitable. Although the SMEs are able to get
sponsorship
from MARTRADE, FAMA, SMIDEC they must have effective marketing
strategies either for the local or global market.
5.0
TECHNOPRENEUR DEVELOPMENT: OPPORTUNITIES AND
APPROACH
Ministry of Entrepreneur and Cooperation Development (MECD) through SME Bank,
Bank Rakyat, MARA, INSKEN and Universiti Kuala Lumpur provide soft and hard
skills training for human resource development. For example, MARA provides a
packaged training program for entrepreneur development and Master Business Incubator
for potential entrepreneurs. INSKEN provides training programs throughout the year
while UniKL offers technopreneur development programs to students/graduates and
entrepreneurs who are interested in high-technology industry. Other agencies such as
MITI, Ministry of Agriculture and Agro-based Industry, Ministry of Rural Development
and ... and Ministry of Youth and Sports also offer entrepreneur development training
programs.
MECD through INSKEN focuses on building entrepreneurial culture to the school
students and graduates. Awareness training activities and business programs are given
emphasis especially to students who participated in student mall activities at university
campuses.
UniKL focuses on graduate students, alumni, staff and
entrepreneurs
with
the
objective of developing 1,000 technopreneurs by year 2010 in various strategic
industries. The University has set-up eight (8) incubator centres for strategic industries to
develop new products and at the same time function
as
technopreneur
business
development parks. These incubator centres were operational in 2007/08 in the fields of
biotechnology/ bioprocess, ICT, automotive, aerospace, marine, electrical and electronic.
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MARA has a special program known as Technopreneur Development Program.
Application can be done through its website http://[email protected] or contact
Entrepreneur Development Division. Main areas covered are halal food, agro-based,
biotechnology, ICT, automotive, aerospace, marine, electrical and electronic. The
programs offered are Masters in Technopreneurship (24 months) and Non-certification
Program (3-12 months) sponsored by MARA.
6.0
CONCLUSION
To strengthen and bring the bumiputera SME technopreneurs to a prestigious level is a
heavy task to handle and we have no choice but to work together as a team in a
systematic way. Developing SME technopreneur who are productive, competitive and
global is the basic requirement in redeveloping the country’s economic structure. The fast
and effective expansion of SME in a country’s economic system is vital for the
sustainable expansion of the economy. SMEs possessing potential technology capability
is said to have the basic requirement for capacity building that can contribute to the
transformation of manufacturing sector from assembly phase to manufacturer phase. If
this transformation can be realised Malaysia would become a manufacturing nation by
2020, a prerequisite towards a developed nation.
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References
Bank Negara Malaysia’s SME Developmental Initiatives. (2007) July/August, 2007,
MGCC Quarterly
Helle Neergaard and John Parm Ulhøi (2006). Government Agency and Trust in the
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Entrepreneurship
Theory
and
Practice
Volume 30, Page 519 - July 2006
Jabatan Perangkaan Malaysia (2006). Laporan Bancian Pertubuhan & Entreprise Di
Malaysia bagi tahun 2003. Percetakan Nasional, Kuala Lumpur
Kementerian Perdagangan Antarabangsa & Industri (MITI) (2004). Laporan Tahunan
MITI. Percetakan Nasional, Kuala Lumpur
Mustazar Mansur, Nor Fadzilah Zainal & Nor Aziroh Che Rozali (2006). Petunjuk
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Clustering on Firm Performance: The Evidence of Taiwan’s Semiconductor Industry.
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