Acting deputy permanent secretary Witoon Simachokedee said last week that if productivity were not improved, then SME competitiveness would suffer at the hands of rivals from neighbouring countries.

Those that do not address the productivity issue will fail, he said.

Witoon added that many SMEs in the footwear, textile and toy industries were already losing out to companies in Vietnam - a direct result of their failing to address competitiveness issues.

Some of these companies have been forced to move production facilities to Vietnam.

Improving SME produc-tivity is considered a core

element of the policy plan recently announced by Industry Minister Kosit Panpiemras.

The ministry will ensure there is money to support this in the fiscal-2007 budget, Witoon promised.

He said governments in developed countries had long emphasised improved SME productivity.

"The adjustment of the ministry's policy to focus more on promoting SMEs is considered as being on the right track," he said.

The ministry is adjusting its current budget to provide money for helping with productivity. In 2007, there will be full financial support for SME productivity incentives, Witoon said.

Productivity is all about achieving greater output from the same input - including more efficient resource allocation, slashing defect rates and improving machinery.

"Determined SMEs must make improvements themselves without waiting for government aid and losing their positions in the market," Witoon said.

The ministry will stress that productivity improvement is not all about government support, the senior official added.

Watcharapong Thongrung

The Nation