Branding and packaging don’t rank high on the priority list of many small and medium corporations, although things are beginning to change.

One initiative that seeks to promote this change is the Branding Innovation Centre (BIC). A joint effort between Limkokwing University of Creative Technology (LUCT) and SME Corp Malaysia, BIC was launched on March 31 to help develop small and medium-sized enterprises (SMEs) in rural communities.

The centre’s aim is to raise the awareness of rural SMEs on the importance of branding and packaging as well as provide them with advice and help. The idea has its roots in the Limkokwing Branding Gallery which was launched in 2005 and is located in the university. However, the centre takes a more proactive approach, inviting SME owners for courses and going to rural areas with the mobile gallery.

“Many SMEs don’t feel a need for a strong brand identity because they’re focused purely on the local market. But many simply don’t know how,” said Lim in an interview. “They often lack knowledge on simple things like listing (permissible) ingredients, using the halal logo and functional packaging.” — particularly skilled talent. There is also a lack of ease of doing business due to overregulation that stifles innovation. If this is to be the year of innovation and creativity, we must look to address these issues,” said Lim.

The “Malaysia: Innovation Nation Convention” which was held on July 20 at LUCT sought to tackle the topics of administrative funding, education, encouraging creative thinking, supporting SMEs and tapping the local creative industry. The focus was on creating an ecosystem in Malaysia that supports innovation.

Prime Minister Datuk Seri Najib Razak acknowledged in his speech at the convention that Malaysia’s innovation ecosystem neds work, particularly in the areas of education, the government, funding and talent.

Funding is certainly a problem. Minister of Science, Technology and Innovation (Mosti), Datuk Seri Maximus Johnity Ongkili, pointed out during his presentation at the conference that a major issue holding back local research and development was the structuring of fund allocation. “The funding provided may be generous, but you cannot plan long-term research on it, as whatever is left unused will be viewed as ‘not spent’ and withdrawn. Some research takes up to three years and they cannot use all the funds at once.”

He said Mosti recommended setting up an Innovation Trust Fund that would allocate funds to projects as certain milestones are met.

Another challenge is that the research is not strongly linked to industry needs. “We must focus more on transforming the results on our research into viable revenue streams,” said Ongkili.

But research also needs to be more than just relevant to industry. To advance, creative and innovative thinking must be stimulated, said Datuk Badlisham Ghazali, CEO of the Multimedia Development Corporation (MDeC) in his presentation. Badlisham said based on MDeC’s working with 2,400 MSC-listed companies, MDeC found that the greatest obstacle to creative thinking among the owners of these companies was their attitude. “They don’t challenge themselves, they accept the status quo, lack networking and therefore, exposure, and don’t benchmark against success stories,” he said.

Many of these MSC companies are also SMEs which, collectively, are lagging globally on the innovation front. Representing 99.2% or 548,000, of Malaysian businesses, they are potential economic drivers. Yet, they only contribute 35% of GDP versus 60% in China, 55% in Japan and 50% in South Korea.

SMEs need to take a more proactive role and push themselves to be competitive internationally, said Chua Tiam Wee, national president of the SMI Association of Malaysia in his presentation at the convention.

LUCT founder and president Lim couldn’t agree more. Although the focus of the Limkokwing Branding Gallery is on packaging, Lim believes its impact goes deeper as packaging touches the brand and therefore, the product. “You cannot separate the product from the brand. Luxury brands must produce quality products. Similarly, SME companies must start from within (the product) to built a strong brand, particularly those looking to export.”

“We need to facilitate changes that will promote innovation… or be left behind,” he said in his opening address at the innovation convention.