Malaysian SMEs Development: Future and Challenges on Going Green

Abstract

Malaysian Small Medium-sized Enterprises (SMEs) is largest business establishment and vital component of the country's economic development. However, limited studies were examined on their development, challenges and future green prospects, especially in service sector. Therefore this article examines the development of SMEs in Malaysia, challenges and opportunities of green practices among SMEs which is play a vital role in the nation growth. The uniqueness of this paper focuses on green practices which is important for SMEs to progress and competitive in domestically and globally. The key messages from these studies examined in this paper are that Malaysian SMEs contribute to the largest business establishment in Malaysia especially service sector and majority of them are in micro size establishment. Nevertheless, there are wide recognition in the literature about the factors hinder SMEs from expanding, this is mainly because high cost of raw materials, high initial cost of investment and shortage of skilled labour. The concept of green environment is still at infancy stage in Malaysian SMEs. Environmental management literature mostly published in the developed countries has proven that ISO 14001 Environmental Management System (EMS) implementation has a positive and significant relationship with SMEs performance. This study is important indicator to encourage other SMEs which has no green practices in place to consider joining the green bandwagon, especially SMEs service sectors. The studies focused are conditioned by the search strategy used. In addition, other key words could be including in future studies such as performance, customer satisfaction, financial performance, environmental and green supply chain management in order to expand this search. The main contribution of this paper is to identify the development of SMEs in Malaysia and future research proposals with regards to the benefit of the green practices (ISO 14001 standards) in Malaysian SMEs service sector.

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