Abstract: Small and Medium Enterprises (SMEs) play an important role in the economic development of many countries. SMEs are also dominant in the Malaysian economy. Their contribution to the national economy, however, remains modest in terms of value added and exports. During the last 2-3 decades, the process of globalization has gained momentum. Malaysia has embraced globalization with open arms and benefited in terms of foreign trade and investment. Along with trade and investment opportunities, globalization has brought challenges of competition, technological change and new business environment to local producers. Given their size and structure, the SMEs in Malaysia are particularly affected by these challenges. To make further progress, the SMEs need to become more dynamic and enter global markets. This requires enhanced competitiveness, entrepreneurship and innovation capacity on the part of SMEs. This paper argues that, among other things, some aspects of the national culture act as constraints in leading the SMEs to the global markets. The paper makes recommendations to overcome these constraints.
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