The first census on small and medium enterprises (SMEs) in Malaysia was undertaken by the Department of Statistics, Malaysia (DOSM) in 2005, following the directive from the National SME Development Council (NSDC). The data from the Census entitled Baseline Census of Establishments and Enterprises 2005 was for the reference year 2003. The Economic Census 2011 which was officially released in September 2012, was for reference year 2010 and had subsumed the census on SMEs. According to the Economic Census 2011, SMEs account for 97.3% or 645,136 of total business establishments in 2010.
SMEs’ concentration are in the services sector with 90% or 580,985 establishments. Meanwhile, 6% of total SMEs (37,861) are in the manufacturing sector, followed by 3% in the construction sector (19,283) and the remaining 1% (6,708) in the agriculture sector and 0.1% in the mining and quarrying sector.
- In the services sector, SMEs are mainly in the distributive trade sub-sector (wholesale & retail trade services), including repair of motor vehicles and motorcycles, followed by food and beverages services and transportation & storages services;
- In the manufacturing sector, SMEs are predominantly in wearing apparel; food products; fabricated metal & printing and reproduction of recorded media;
- In the construction sector, SMEs are mainly in the special trades sub-sector, constituting about 40% of total establishments in the sector. Special trades refer to the construction of parts of buildings and civil engineering works without responsibility for the entire project;
- In the agriculture sector, most of the SMEs are in the agriculture crops sub-sector; and
- In the mining and quarrying sector, most of the SMEs are in the stone quarrying business (84%).
Most of the SMEs are microenterprises, forming 77% of total SMEs in Malaysia in 2010. Small-sized SMEs accounted for 20%, while medium-sized SMEs constitute the balance 3%. Microenterprises were predominant in the services sector, accounting for close to 80% of SMEs in the sector. Majority of SMEs in the manufacturing and agriculture are also microenterprises, constituting 57.1% and 56.3% of SMEs in their respective sectors. In the construction sector, the size of SMEs is well distributed across medium, small and microenterprise. Meanwhile, small and medium-sized establishments constituted a large proportion of the SMEs in the mining and quarrying sector.
Based on the Economic Census 2011, Klang Valley (Selangor and Kuala Lumpur) accounted for nearly one-third of the total SMEs, followed by Johor with 10.7% and Perak with 9.3%.
About 19.7% of total SMEs are women-controlled. By definition, this refers to enterprises with a woman having equity of 51% and above, or she being the CEO with equity ownership of at least 10%. Women-owned SMEs are mainly concentrated in the services sector (91.7%) followed by the manufacturing sector (6.9%). Women are less involved in the construction, agriculture and mining & quarrying sectors.
Since 2004, SME GDP growth has consistently outpaced the country’s overall economic growth. In the period 2005-15, the average compounded annual growth rate (CAGR) of SMEs was 7.0%, which was higher than the 4.9% CAGR of the overall economy. As a result, SME contribution to GDP increased from 29.6% in 2005 to 36.3% in 2015.
In 2015, SMEs also contributed 65.5% of total employment and 17.6% of total exports. Despite the positive performance of SMEs in recent years, contribution of Malaysian SMEs to the overall economy remains relatively small compared with their counterparts in advanced and other high middle income countries. Therefore, the Government launched the SME Masterplan in 2012 with the aim to chart the development of SMEs in line with Malaysia’s aspiration to become a high-income country by 2020.
For more information, please refer to the SME Profile based on Economic Census 2011
Sources: Department of Statistics Malaysia (DOSM) and SME Corp. Malaysia