BARRIER HINDERING THE APPLICATION OF VALUE CHAIN IN MALAYSIA SME

Abstract

This article explores the significant barriers hindering the effective application of the value chain framework in rural small and medium enterprises (SMEs) in Malaysia. Rural businesses face unique challenges, including limited access to financial resources, inadequate infrastructure, and technological gaps, which prevent them from fully participating in broader value chains. These barriers are compounded by a lack of skilled labor, bureaucratic hurdles, and limited market access, which collectively limit the growth potential and competitiveness of rural SMEs. The inability to integrate into supply chains reduces their productivity, market reach, and overall sustainability. Moreover, the digital divide between rural and urban businesses exacerbates the challenges, particularly with the rise of e-commerce and digital tools. Despite these obstacles, overcoming these barriers is essential for fostering inclusive economic development. The article highlights the urgent need for targeted interventions, including improved financing options, better infrastructure, and enhanced digital support for rural entrepreneurs. Additionally, addressing the skills gap through training and educational initiatives is crucial for empowering rural SMEs to innovate and compete. Collaboration between government agencies, private sector partners, and rural businesses is vital to creating a supportive ecosystem for rural entrepreneurship. Ultimately, addressing these challenges will contribute to a more equitable distribution of economic benefits, bridge regional disparities, and foster sustainable growth, helping rural SMEs integrate more effectively into the value chain and enhancing their role in Malaysia’s digital economy