Source of output growth in small and medium scale enterprises in Malaysia

Small and medium scale enterprises (SMEs) play an important role in the Malaysian industrial development. SMEs comprise of more than 90 per cent of the total manufacturing establishments, contributing about 40 per cent of the total employments and 30 per cent of the total fixed assets in this sector. However, SMEs’ value added is very much lower than that of the large scale. A low productivity of physical inputs or factors efficiency may be attributed to low level of value added. In general the benefit gained from technological advancement and human resource development varies for different size and types of industry. Consequently, this leads to productivity differences of their physical inputs and quality of inputs. This paper aims to address this issue using data from the Manufacturing Industries Survey conducted by the Department of Statistics of Malaysia. The analysis will look at the source of output growth in different types of SMEs sub-industries.Growth; total factor productivity; manufacturing sector

Keanjalan penggantian antara kemahiran dalam sektor pembuatan di Malaysia

It is very crucial to know the elasticity of substitution among various sectors,skills and between skills and physical capital because it will help the producers in planning their manpower. The value of the elasticity of substitution between inputs is also important to policy makers because it determines the effectiveness of the policy regarding input price change. Besides this, the elasticity of substitution provides an important guideline to the education planner. This article analyses the elasticity of substitution between physical capital and labour and between various skills, namely professionals, supervisors, skilled labour, semi-skilled labour and unskilled labour in the Malaysia manufacturing sector based on the Manufacturing Survey of 1985-1996. The constant elasticity (CES) production function is used to estimate the elasticity of substitution. The results show that the elasticity of substitution for most combination inputs is greater than unity but in general they are still low. The elasticity of substitution between high rank job categories and skills is larger than the elasticity between the low rank job categories. Also more capitalintensive industries show higher elasticity of substitution between their inputs. This reflects high rank jobs like professional and technical careers are easily substituted by other skills in the production process when their price increases. Also workers in a more capital-intensive industries are more easily substituted by each other

Sumbangan perubahan teknologi terhadap pertumbuhan output industri skel kecil dan sederhana di Malaysia

Purpose – The article has two main objectives. Firstly, it analyses technical efficiency, technological change, and total factor productivity (TFP) growth in small and medium industries (SMEs) in Malaysia. Secondly, it examines to what extent technological change influences SMEs output growth. Design/Methodology/Approach – The analysis was based on the Manufacturing Industrial Survey data of 1985-2003 collected by the Department of Statistics Malaysia. SMEs are defined as an industry with less than 200 full-time workers. The study covers 10 SMEs sub-industries at 3 digits of the Manufacturing Standard Industrial Classifi cation (MSIC). In achieving the first objective, the study used Data Envelopment Analysis (DEA). The value of technological change derived from DEA was then used as the dependent variable in the production function to achieve the second objective. Findings – The study showed that TFP growth for the overall SMEs is negative due to negative change of both technical change and technological change. However, analysis at the sub-industry level showed positive TFP growth for food and beverages, textiles, and plastic products, which was due to positive growth of their technical change. Technological change has positive impact on six SMEs sub-industries, i.e. food and beverages, textiles, wood-based products, plastic products, electrical electronics, and transport equipments. Originality/Value – This article introduces a new measurement for technological change from a DEA approach to be incorporated in the production function. Paper type – Research Paper

Source of output growth in small and medium scale enterprises in Malaysia

Small and medium scale enterprises (SMEs) play an important role in the Malaysian industrial development. SMEs comprise of more than 90 per cent of the total manufacturing establishments, contributing about 40 per cent of the total employments and 30 per cent of the total fixed assets in this sector. However, SMEs’ value added is very much lower than that of the large scale. A low productivity of physical inputs or factors efficiency may be attributed to low level of value added. In general the benefit gained from technological advancement and human resource development varies for different size and types of industry. Consequently, this leads to productivity differences of their physical inputs and quality of inputs. This paper aims to address this issue using data from the Manufacturing Industries Survey conducted by the Department of Statistics of Malaysia. The analysis will look at the source of output growth in different types of SMEs sub-industries

Keanjalan Penggantian antara Kemahiran dalam Sektor Pembuatan di Malaysia

Maklumat tentang keanjalan penggantian antara pelbagai kategori pekerjaan dan antara kemahiran dengan modal fizikal amat perlu diketahui. Ini kerana maklumat ini dapat membantu pengusahamerancang tenaga kerja mereka pada masa depan. Maklumat ini jugapenting kepada pembuat dasar kerana kejayaan sebarang dasar yangberkait dengan perubahan harga input relatif bergantung kepada nilai keanjalan penggantian antara input tersebut. Dari segi sistem pendidikan, maklumat ini juga penting dalam merancang penawaran pendidikan yang diperlukan di pasaran. Artikel ini bertujuan menganalisis keanjalan penggantian antara modal fizikal dengan buruh dan antara pelbagai kategori kemahiran buruh, iaitu profesional, teknikal/penyeliaan, mahir, separa mahir dan tidak mahir dalam sub industri pembuatan di Malaysia berdasarkan kepada data Penyiasatan Industri Pembuatan 1985-1996. Fungsi pengeluaran keanjalan penggantian malar (CES) merupakan asas kepada kaedah penganggaran. Hasil kajian menunjukkan keanjalan penggantian dalam kebanyakan kombinasi input adalah melebihi uniti tetapi masih pada peringkat rendah. Keanjalan penggantian antara pekerja peringkat lebih tinggi dengan pelbagai kemahiran adalah lebih besar jika dibandingkan dengan kategori pekerjaan peringkat lebih rendah. Pekerja dalam industri yang lebih berintensifkan modal juga didapati mempunyai keanjalan penggantian yang lebih tinggi. Ini bermakna pekerja peringkat tinggi lebih mudah digantikan dengan pekerja lain sekiranya berlaku peningkatan harga mereka. Begitu juga pekerja dalam industri berintensifkan modal lebih mudah diganti antara satu sama lain.

Source of output growth in small and medium scale enterprises in Malaysia

Small and medium scale enterprises (SMEs) play an important role in the Malaysian industrial development. SMEs comprise of more than 90 per cent of the total manufacturing establishments, contributing about 40 per cent of the total employments and 30 per cent of the total fixed assets in this sector. However, SMEs’ value added is very much lower than that of the large scale. A low productivity of physical inputs or factors efficiency may be attributed to low level of value added. In general the benefit gained from technological advancement and human resource development varies for different size and types of industry. Consequently, this leads to productivity differences of their physical inputs and quality of inputs. This paper aims to address this issue using data from the Manufacturing Industries Survey conducted by the Department of Statistics of Malaysia. The analysis will look at the source of output growth in different types of SMEs sub-industries

Sumbangan Perubahan Teknologi Terhadap Pertumbuhan Output Industri Skel Kecil dan Sederhana di Malaysia

Industri Skel Kecil dan Sederhana (IKS) memainkan peranan yang amat penting terhadap pertumbuhan ekonomi Malaysia. Bilangan pertumbuhannya yang banyak merangkumi hampir 90% daripada jumlah pertubuhan sektor pembuatan di Malaysia. Hal ini menjadikan industri ini mempunyai kemampuan yang tinggi dalam menyediakan peluang pekerjaan kepada rakyat. Namun sumbangannya dari segi output tidak setimpal dengan bilangan pertubuhannya dan jauh lebih rendah daripada sumbangan Industri Skel Besar (ISB) yang banyak didominasikan oleh pelabur asing. Jumlah output atau nilai ditambah IKS hanya merangkumi sekitar 30% daripada keseluruhan ouput pembuatan. Keadaan ini ada kaitannya dengan rendahnya kecekapan IKS dalam mengendalikan aktiviti pengeluarannya dan teknologi yang digunakan jauh terkebelakang daripada yang berlaku dalam ISB. Kedua-dua komponen ini menyumbang kepada rendahnya Pertumbuhan Produktiviti Faktor Keseluruhan (TFPG) IKS. Artikel ini akan menganalisis perubahan kecekapan teknikal, perubahan teknologi dan TFPG dalam IKS. Seterusnya artikel ini melihat sejauh mana perubahan teknologi mempengaruhi pertumbuhan output IKS. Bagi mencapai objektif ini data IKS daripada Penyiasatan Industri Pembuatan, Jabatan Perangkaan Malaysia bagi tempoh 1985-2003 digunakan. IKS didefinisikan sebagai industri dengan bilangan pekerja sepenuh masa kurang daripada 200 orang. Data ini merangkumi 10 sub industri IKS pada tahap pengkelasan Industri Piawaian Malaysia (MSIC) 3 digit. Analisis kertas ini bermula dengan melihat perubahan kecekapan teknikal, perubahan teknologi dan TFPG yang berlaku dalam IKS dengan menggunakan kaedah Data Envelopment Analysis (DEA). Analisis seterusnya ialah menggunakan perubahan teknologi sebagai salah satu pemboleh ubah dalam model pertumbuhan output IKS bersama-sama dengan faktor modal dan buruh untuk melihat sejauh mana perubahan teknologi mempengaruhi pertumbuhan output. Analisis peringkat kedua ini menggunakan kaedah kuasa dua terkecil (OLS).

Technical efficiency, technological change and total factor productivity growth in Malaysian manufacturing sector

The manufacturing sector is becoming more important for the Malaysia economy. The contribution of output and employment from this sector is continuously increasing since the 1980 an, except for certain period when an economy experiences recession. Viewing from its capacity to spearhead economic growth the government has given emphasis to the manufacturing sector in achieving industrialized nation by year 2020. It is a claim that productivity for this sector had not yet achieved optima level and in certain years, the growth of productivity was smaller than the growth of wages. Even though the concept of productivity usually referred to labour productivity, this concept is very much related to total factor productivity (TFP). This paper attempts to analysis trend of, technical efficiency, technological change and TFP growth in the Malaysian manufacturing sector. The analysis is based on data from the Industrial Manufacturing Survey of 1985 to 2000 collected by the Department of Statistics Malaysia using Data Envelopment Analysis (DEA). The results show that during the period under study, TFP growth is increasing and the major contribution of TFP growth in technical efficiency. Nevertheless, technological change show increasing trend over time. The industries that experienced high technical efficiency are food, wood, chemical and iron products. However, for food and wood industries technical progress is higher than technical progress. The other industry that shows larger technical progress than technical efficiency is textile industry but both values are below unity

Technical efficiency, technological change and total factor productivity growth in Malaysian manufacturing sector

The manufacturing sector is becoming more important for the Malaysia economy. The contribution of output and employment from this sector is continuously increasing since the 1980 an, except for certain period when an economy experiences recession. Viewing from its capacity to spearhead economic growth the government has given emphasis to the manufacturing sector in achieving industrialized nation by year 2020. It is a claim that productivity for this sector had not yet achieved optima level and in certain years, the growth of productivity was smaller than the growth of wages. Even though the concept of productivity usually referred to labour productivity, this concept is very much related to total factor productivity (TFP). This paper attempts to analysis trend of, technical efficiency, technological change and TFP growth in the Malaysian manufacturing sector. The analysis is based on data from the Industrial Manufacturing Survey of 1985 to 2000 collected by the Department of Statistics Malaysia using Data Envelopment Analysis (DEA). The results show that during the period under study, TFP growth is increasing and the major contribution of TFP growth in technical efficiency. Nevertheless, technological change show increasing trend over time. The industries that experienced high technical efficiency are food, wood, chemical and iron products. However, for food and wood industries technical progress is higher than technical progress. The other industry that shows larger technical progress than technical efficiency is textile industry but both values are below unity.Technical efficiency; technological change; and total factor productivity