KUALA LUMPUR: Small and medium enterprises (SMEs) must increase productivity to achieve the target of 41 per cent contribution to the gross domestic product by 2020.

Speaking at the opening ceremony of the SME Annual Showcase and SME Conference 2017 here today, Prime Minister Datuk Seri Najib Razak said the target was achievable but the sector must make a transformation to push the limits of its capabilities.

“Although the sectorial growth of SMEs is impressive, we need to grow at a rate of 8 per cent higher to achieve that target of 41 per cent.

“If we are able to do so, SMEs will continue being the driving force for the economy,” Najib said during a town hall session at the event.

SME Corp chief executive officer Datuk Dr Hafsah Hashim, who hosted the session, said the GDP contribution of SMEs currently stood at 36.9 per cent.

Najib took two questions during the town hall session, during which among others he elaborated on the reasons why he allocated RM22.2 billion to the sector in the 2018 Budget and his aspirations for the recently-launched Digital Free Trade Zone (DFTZ).

According to him, the budget given to SMEs must be used for expansion of the sector, startups, export and automation in relation to the Fourth Industrial Revolution.

He also said productivity must also be increased in tandem with other developments.

On DFTZ, Najib said he aimed for 10,000 SMEs to be involved in the DFTZ in the future.

“We must be part and parcel of the global supply chain. To do this, we have to raise the bar and keep it high.”

Also in attendance at the event was International Trade and Industry Minister Datuk Seri Mustapa Mohamed and International Trade and Industry Deputy Minister Datuk Ahmad Maslan.