The Government Business Support Services in Malaysia: The Evolution and Challenges in the New Economic Model

Abstract

Over the years, the government business support services (GBSS) have worked closely along the governmentpolicies and experienced a number of transformations to suit the current needs of the SMEs and businessenvironment. In order to understand the philosophy and the very nature of the GBSS in the present context it isparamount to study the development of the services in the country over time. Hence this paper explores theevolution of the GBSS, starting from prior independence period to the New Economic Policy era and in thecontemporary period. The study shows the government business involvement formerly started a few years backbefore the independence. A humble beginning with the objectives to bring close ties between the rural folks andthe government had acted as a stepping stone to the glorious achievement of the GBSS. The quantum leap begunin the NEP era as the current government had recognised the roles of entrepreneurship as a catalyst to the socialrestructuring process. While understanding the evolution of the GBSS provides a background of the study, it isparamount important to look at the challenges faced by GBSS in current situation. The new economic modelwhich was launched by the Prime Minister recently is aimed at moving the country towards high incomeeconomy in ten years times. Coherently, the move is a big challenge to the GBSS as to better equip theMalaysian SMEs with innovation, creativity and value-added activities. An important question is, do they readyfor the big game? The present paper is structured according to the following lines. First, a brief reviews theestablishment, roles and present functions of the GBSSs’ main players namely Majlis Amanah Rakyat (PeopleCouncil of Trust), SME Bank, GCG, SME Corporation and National SMEs Development Council. Second,discusses the current issues and challenges that need to be addressed by the GBSS, and lastly discusses andsuggests viable strategies should be taken by the GBSS to remain relevant and successfully contribute to the neweconomic model.