Emergence of Women-Owned SMEs as a Game-Changer of Malaysia in the Era of Digitalization

Abstract

Given the current constraints of the Malaysian economy to grow beyond the middle-income trap, the women owned small and medium enterprises are envisioned to be the game changers, to lead the Malaysian economy out of the middle-income trap. While the microenterprises owned by women are expected to bring in more inclusiveness and gender-parity in the economy, the small ventures can feed in the big business to act as an enabler of growth, and the medium enterprises have the potential to emerge as driver of growth themselves. The authors posit that classical constraints faced by women-owned SMEs, mostly rooted in resource crunch may be partially overcome by using the digitalized platform and e-commerce infrastructure of the country. However, state-level evidence suggests that majority of women-owned SMEs (WOSME) belong to micro and small sectors, with limited ability of job creation. Also, the presence of medium firms is highly skewed towards traditional low-technology sectors, in spite of educational and technical exposure. The success of these WOSME is actually dependent on the nature of the big business and the state-level economic and social characteristics, rather than the utilization of digital platforms by SMEs. This supports the evidence that success of WOSME is still heavily dependent on the large business enterprises, representing the classical structure. Absence of any effective policy to encourage women SME entrepreneurs in Malaysia constricts WOSMEs from playing the role of game-changer in the digitalized economy, in spite of their extremely high potential. Policies in the country appeared to be ethnicity-conscious, rather than gender-centric.