66 small- and medium-sized enterprises (SMEs) and mid-tier companies with registered businesses in primarily traditional or non-technology activities from the service sector have been awarded the Government’s Pelan Jana Semula Ekonomi Negara (PENJANA) 2020 #SMART Automation Grant (SAG) through the Malaysia Digital Economy Corporation (MDEC) involving RM6.2 million.
The SAG, which was launched in July 2020, had been conceptualised as a matching grant for companies in the services sector to spur them towards automating their business processes and pursue full digitalisation. The grant allocated from the 2020 PENJANA initiative aims to drive these businesses towards kickstarting the implementation of digital processes and use of technology tools that will automate their business operations.
The 66 recipients come from all over Malaysia and include service providers, such as Wholesale and Retail Trade (30%); General Services (24%); and Professional Services (14%). The other sectors consist of Transportation and Storage; Tourism; Education; Healthcare; Food and Beverage; Financial and Insurance; and Real Estate and Construction.
Since its unveiling, this initiative has solely focused on enabling digital adoption amongst businesses, which is a central part of MDEC’s three strategic framework pillars: Digital Jobs, Digital Businesses and Digital Investments. The agency continues to set the foundation for SMEs and mid-tier companies to thrive in the Fourth Industrial Revolution (4IR) era by focusing on empowering businesses at every level and in all sectors.
Each successful applicant had been allocated up to 50% of their total project cost, subject to a ceiling limit RM200,000 or, whichever is the lowest, through this matching grant. This means the successful applicants will pay at least 50% of the total cost of the digitalisation project and, subsequently, will receive the remaining amount based on the achievements of the agreed milestone deliverables.
The grant covers a 4-month duration involving project implementation and digitalisation of business operation for up to one month, and post monitoring evaluation processes to achieve project outcomes which consist of up to three months.
The CEO of MDEC stated that the socio-economic impact of the global pandemic had forced businesses to put on their digital thinking hat and bring forward their digitalisation plans. To support them, the Government, through MDEC, developed this specific matching grant for SMEs and mid-tier companies to provide them with the ability to build their digital capabilities and capacities.
The goal, after all, is to ensure they are ready to make that leap into the 4IR era, as this is part of MDEC’s efforts to realise the vision of Malaysia 5.0 and open up the digital economy for the many, she added.
Notably, the Government allocated a total of RM10 million for MDEC under PENJANA to channel the grants in a partnership approach between the government and the SMEs and mid-tier companies to drive forward digitalisation for all Malaysian businesses.
The submission entry was open between 1 July and 14 October 2020. After the closing deadline, a thorough review and assessment were carried out to ensure that the grant was allocated based on the eligibility requirements. This included its Malaysian incorporation status, its long-standing operational performance and overall financial competency.
Currently, MDEC continues to evaluate and will announce more successful grant recipients in due course. The agency is also disbursing the approved grants in batches to the respective recipients based on proof of milestones and KPIs achieved.
Grant applications are evaluated by the SAG Approval Committee, a team that consists of public and private representatives and authorised industry subject matter experts.