Abstract
In the recent years, a number of emerging issues are posing serious challenges to the small and medium sized enterprises (SME’s) in Malaysia. Hence, these enterprises enter the new era, dramatic challenges begun such as establishing new enterprises, globalization, financial constraints, high turnover, low motivation among employees, lack of human capital building, and more challenges ahead. Thus understanding the problems and challenges are fundamental solutions to expand and strategize SME’s to future progress and grows. Therefore this article examines the background and challenges face by SME’s which play a vital role in the nation growth. The uniqueness of this paper is the emphasis on the human resource development perspective which is important for SME’s to progress and be competitive. Finally, this article maps out how future research can be more sensitive to how SME’s actually develop their own human resource development for future development.
Highlights
Background of Small and Medium Sized Enterprises (SMEs) in MalaysiaIt is reported by the Malaysian Department of Statistics as in 2003, there were 523,132 total establishments in Malaysia which SMEs accounted the most for the total of 99.2% (518,996)
Our discussion focused on the background and challenges of SMEs and the importance of human resource development
We have described human resource development is fundamental for small sized firms to develop
Summary
Micro establishments constitute the largest number with more than three quarters out of the total SMEs formations They are primarily represented in the services and agriculture sectors with the proportions for 80.4 and 93.3 percent respectively. In regards to geographical location, Saleh and Ndubisi (2006) found that a vast number of manufacturing companies in Malaysia was located in the West Coast of Malaysia which is the industrialized location which is equipped with ports services They found that Johor has the largest concentration of manufacturing companies such as textiles and apparel and wood based industries with 17.5 percent, followed by Selangor (16.7 percent), Perak (9.4 percent) and Pulau Pinang (8.7 percent). In the general business or service sector, about 449,004 out of total establishments were SMEs which constituted to 99.4 percent. In Kedah where agriculture is the main stay of the economy, the number of SMEs were the largest with the total of 8,803 (27.4 percent) followed by the east coast states with 26.6 percent
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