FMM URGES SME-CENTRIC INCENTIVES TO BOOST INNOVATION, SUPPLY CHAINS

KUALA LUMPUR, Feb 27 (Bernama) -- The Federation of Malaysian Manufacturers (FMM) has called for stronger innovation capabilities among small and medium enterprises (SMEs) and Tier-1 and Tier-2 suppliers to support upgrading, localisation and participation in global value chains.

In a statement, FMM president Jacob Lee Chor Kok said the federation had proposed that the Ministry of Science, Technology and Innovation (MOSTI) introduce more accessible, SME-friendly incentives and dedicated outcome-driven funding under Budget 2027.

He said the proposals include structured industry-academia collaboration and a broader, more flexible interpretation of research and development (R&D) to better recognise SME-led activities.

“These activities include process innovation and incremental improvements, simplified tax and grant mechanisms, enhanced commercialisation, common-user facilities and matching grants to crowd in private-sector investment,” he said following FMM’s recent courtesy call on MOSTI Minister Chang Lih Kang.

Lee said FMM also stressed the need to strengthen resilient domestic supply chains by scaling up the FMM-Malaysian Investment Development Authority (MIDA) Industrial Linkage Programme.

This includes embedding innovation, advanced technologies and environmental, social and governance (ESG) practices into supplier upgrading, promoting cluster-based ecosystems and a National Vendor Programme, and accelerating localisation, import substitution and anchor-led technology transfer in high-value and strategic sectors.

He added that a coordinated one-stop advisory ecosystem is needed, alongside structured readiness assessments and digital roadmaps, simplified incentives and micro-grants, shared smart infrastructure, collaborative digitalisation models, and stronger talent development in smart manufacturing, data, cybersecurity and automation.

Lee said these efforts would be supported by initiatives such as FMM’s collaboration with SIRIM Bhd to onboard 3,000 companies under the New Industrial Master Plan 2030.

FMM also highlighted the need for sustained, ecosystem-wide efforts to address perception challenges surrounding science, technology, engineering and mathematics (STEM) and technical and vocational education and training (TVET), and to deepen industry involvement in career awareness through pilot initiatives aimed at fostering early interest in science and technology.

Closer and more structured collaboration between manufacturers, universities and research institutions, particularly in applied research, commercialisation and problem-driven innovation, would be critical to accelerating Malaysia’s shift towards more complex, higher value-added and technology-intensive products, Lee added.

-- BERNAMA