KUALA LUMPUR, June 14 (Bernama) -- Shortage of skilled workforce continues to be a major challenge for small-and-medium enterprises (SMEs), says the International Trade and Industry Ministry (MITI).

In its Malaysia International Trade and Industry Report 2010, it said the shortage was aggravated by the unwillingness of SMEs to train their staff and fear of their workers being pinched by other companies.

MITI said among other challenges faced by SMEs were lack of access to financing, which continued to be an issue in certain segments, particularly in start-ups, ICT and new emerging sectors like creative and green technology industries.

SMEs also faced the problem of technology adoption and innovation, MITI added.

"Since technology is often associated with high investment, SMEs shy away from the technology mainstream. This make them more labour-intensive with limited automation, particularly backyard industries which are mostly micro enterprises," it said.

However, MITI said the SME contribution to the economy in 2010 increased, driven by the strong growth in the services sector and domestic-oriented manufacturing industries.

It was earlier projected that value-added growth would be between eight and 8.5 per cent while overall economic growth was projected at 7.2 per cent for last year.

-- BERNAMA