PETALING JAYA: Start-up companies and small and medium-sized enterprises (SMEs) must be central to future government initiatives, as these firms have the most potential to grow and create value and jobs, says an economist.
Paolo Casadio of HELP University said that past policies aimed at funding and supporting start-up companies had proven to have a greater impact on GDP and employment than standard expenditure.
“There is still a lot of potential there, it just has not been exploited,” he told FMT.
“Optimising the funding these companies get can give a huge boost to economic recovery. It’s not just about injecting more money, but also helping them organise and coordinate their operations.”
He said that past ineffectiveness could be seen in the way many successful start-ups had moved to Singapore to court investments or go public — “a huge loss of wealth Malaysia should be trying to retain.”
In addition, many SMEs formed the backbone of the supply chain, and supporting them will allow the larger economic contributors to thrive and drive growth.
Casadio said previous government relief packages had been too selective, focusing on a restrictive number of enterprises and too narrow a group of people. It seems natural to concentrate on the biggest players, but in a supply chain context, the weakest elements of the chain limit its overall performance.”
He suggested an appropriation of RM10 billion to allow smaller companies to resume full scale operations as soon as possible: “These companies can restore the pay of their employees and begin to hire new ones”.
“Another idea could be to establish a short-term loan facility for businesses to pay, let’s say, half of their workers’ salaries in advance at the beginning of the month,” he said, which could be paid back through earnings made during the remainder of the month.
Source: https://www.freemalaysiatoday.com/category/nation/2021/09/07/tap-the-big-potential-among-startups-and-smes-says-economist/