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Thursday, June 07, 2012

SME News

Productivity growth at 4.6%

Malaysia needs a minimum productivity growth rate of 4%- 5% a year from now until the end of the decade to achieve high income status by 2020

By Lim Wing Hooi

Themed 'From Ideas to Reality,' Malaysia Productivity Corporation (MPC) packaged the 2nd Creanova 012 as a 5-in-1 programme where participants are able to attend five events by signing up for just one.

The acronym, derived from 'create' and 'innovate,' incorporates the basic objective of MPC which is to focus on creativity and innovation as the twin drivers of national productivity. 

Mustapa: Minimum wage can be a strategy needed to shift
from cost competitiveness to skill and productivity
Held in Sime Darby Convention Centre on May 15, the key event was the publication of the national Productivity Report for 2011/2012. This is a comprehensive analysis of the productivity performance of key sectors of the economy.

From 2006 to 2010, Malaysia's average productivity growth was 3% and in 2011 it jumped to 4.6%. "What this means is that if we want to achieve high income status by 2020, we need to turn in a minimum productivity growth rate of 4%-5% every year from now till the end of the decade," said International Trade and Industry Minister Datuk Seri Mustapa Mohamed.

Gradual steps to move towards achieving high income nation status

Adding in three new chapters on Malaysia and International Competitiveness, on Modernising Business Regulation and on Escalating Enterprise Innovation, there is also a special write-up on Quality of Life issues.

Adding that Malaysia must modernise its labor market to become a highincome economy, he said the implementation of higher minimum wage provides better quality of life to almost one third of the workforce or over three million private sector employees.

"To the industries, minimum wage can be a strategy needed to shift from cost competitiveness to skill and pro-ductivity," he said.

Mustapa further added that industries need to create modem jobs that shift from manual and routine tasks to automation, higher technology and higher value creation.

"These are prerequisite to higher productivity and competitiveness as shown by the top ten competitive economies in WCY2011 report. Hong Kong, USA, Taiwan, Canada, Australia, Luxembourg, Netherland, China and United Kingdom are reported to practice minimum wage and achieved higher productivity
and global competitiveness," he added.

Adding a question to ponder for the participants, Mustapa asked where the real challenge lies and can the nation achieve its vision in the face of the many uncertainties in the international economic scene.

"Are we restructuring the economy fast enough and intensively enough to achieve the kind of accelerated growth we need? Are we investing sufficiently in human capital development to take this country to a higher plane of economic development? And, indeed, are we working smart enough and innovatively enough to achieve true productivity-led growth?" Mustapa asked, leaving the participants to ponder on the issues.

Global best practises for Malaysian productivity

Moving forward, MPC chairman Tan Sri Azman Hashim s d MPC is also working closely with Asian Productivity Organisation (APO) of Japan in carrying out a project involving the use of Material Flow Cost Accounting (MFCA).

MFCA is a technique which focuses on tracking waste, emissions and products which do not add value but can help to boost an organisation's economic and environmental performance.

"A pilot project on MFCA by five local companies had aleady shown promisings results of savings amounting to more than RM 1.6 million," he said.

Azman further added that another MPC initiative on Regulatory Review has led to the establishment of the National Policy on the Development and Implementation of Regulations, and the Best Practice Regulation Handbook.

"These documents provide systematic guidelines for the implementation of a gatekeeping syste which helps to enhance transparenc and accountability of regulatory actin , promotes a good regulatory and b siness environment and creates a clima e for a better quality of life," he said.

Becoming a more business-friendly nation

MPC is also collaborating with the Focus Group on Business Process Re-engineering (FGBPR) in Modernising Business Licensing initiative.

Azman: The Modernising Business Licensinginitiative is estimated 
to reduce RM729 millionin business license compliance cost.
Set up under the Special Taskforce to Facilitate Business (PEMUDAH), to date, 52% of the 761 licenses reviewed by this Focus Group have been identified for elimination or simplification.

Azman said in his speech that when this initiative is completed by end of this year, it will translate to a reduction of anestimated RM729 million in business license compliance cost.

"This will again enhance investors' confidence and boost our productivity and competitiveness," he said.

Currently, MPC also studies the regulatory burdens in Dealing with Construction Permits.

Involving reviews on all procedures required to construct simple buildings from planning submissions until obtaining connections for utilities, MPC is collaborating with the relevant ministries and agencies to upload a public consultation paper on its website for the public to give their opinions and views.

The public have until the June 3 to voice their thoughts on this matter.

"As MPC counts on this Power of Collaborative Innovation to be able to deliver, I take this opportunity to thank all agencies, associations, organisations and individuals, who have been supportive of MPC's initiatives," he said.

The event also includes the formalisation of collaborative partnerships between MPC and three universities.

Kept Jame! Abd Rahman RMN sharing with the crowd how he run a light ship,'
a situation familiar to many SMEs, and leading it towards excellence,
one being the MS ISO 9001:2008 and OHSAS 18001:2007
The first parnership, Monash University Sunway Campus will focus on research on issues of innovation and competitiveness.

The second partnership with Universiti Tun Abdul Razak and the emphasis is on case teaching and researchmethods. The third is with Universiti Kebangsaan Malaysia, researching into the technological and innovation capability of Malaysia-owned companies.

The other events include the Business Excellence Award Presentation ceremony and a Business Excellence Seminar, workshop to showcase the success stories of organisations: YTL Power Services Sdn Bhd and KD Mahawangsa from the Royal Malaysian Navy.

The fifth and final event is a seminar for 300 college and university students on the theme of 'Generation Y in the era of the 21" Century'.

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