In Sarawak, small and medium enterprises (SMEs) including the operators of the cottage industries are the key drivers to Sarawak’s economy.
The SMEs make up over 75 per cent of the business sector, contributing 20 per cent to Sarawak gross domestic product (GDP) and providing about 600,000 jobs for Sarawakians.
Cottage industries provide economic opportunities for the poor or the middle-income section of people through employment, thus alleviate poverty especially among the hardcore poor.
Poverty is still a worrying issue in Sarawak, with many households from the hardcore poor struggling to earn income and with the ongoing Covid-19 pandemic, it is expected to get worse.
According to the Household Income and Basic Amenities Survey Report by State and Administrative District, Sarawak 2019, about 43.6 per cent of the total 625,400 households in Sarawak still earn below RM4,000 with 10.7 per cent earning less than RM2,000.
However, the cottage industries have proven to be a tool to decrease poverty as they provide employment to people on a massive scale.
They provide an environment of lower income inequality and allow people to take control of their lives and bring earnings into their community.
Moreover, it has shown to help household especially those of the hardcore poor group to earn extra income.
Solving unemployment issue
In rural areas, small-scale cottage industry is considered an important source of employment for those who cannot find jobs anywhere.
Generally, women have benefited the most from cottage industries because they can work from home while still tending to their families.
For example, Kampung Punang Baru in Lawas is known for its cottage industries of processing smoked ‘tahai’ fish among the local.
Due to its growth potential, Kamoung Punang Baru was chosen to be under the ‘Desa Lestari’ program to carry out the smoked ‘tahai’ fish processing project in 2020.
The ‘Desa Lestari’ program is one of the initiatives by the Ministry of Rural Development (KPLB) established under the Government Transformation Program 2.0 (GTP 2.0).
After the implementation of the program, it is reported that the program will help create 75 new job opportunities and will benefit 500 villagers and its surrounding areas.
Through the program, it aims to create a socio-economic impact to the rural community by increasing their income, creating job as well as impacting other industry sectors within the area such as tourism.
From this, people can learn management techniques and skills which later can help to establish and develop large scale industries.
Thus, this shows that unemployment problem can be solved by establishing cottage and small-scale industries.
Require less capital
A cottage industry is defined as a small-scale manufacturing business that can be established and operated by the household rather than a facility or factory.
Unlike big operational business, cottage industries require lesser amount of investment to start as well as the number of people employed.
Often, they may have been made up of family members engaged in producing finished goods by utilizing raw materials supplied from suppliers.
Aside from that, cottage and small-scale industries are easy to establish because these industries do not require more capital and good technical knowledge as well as low technology.
Despite the low amount of investment, the products of the cottage and small-scale industries have the potential to be exported to the foreign countries which then help to increase the national income.
Utilising local resources
Apart from creating job employment that helps households in Sarawak to earn extra income and the low level of investment required, small-scale cottage industries give opportunities to entrepreneurs to utilise local resources.
In Lawas for instance, smoked ‘tahai’ fish is a popular local delicacy and thus can be considered among one of the main cottage industries that supplies extra income to the local community.
In Kuching, it is common to see for the cottage industries to produce kek lapis (traditional layered cakes) and operate home -stay services.
Aside from that, it is also popular trend in Sarawak for local communities of different ethnic groups to produce traditional costumes, garments and accessories.
This goes to show that local communities especially those in the rural areas have the opportunity to established their own business regardless of where they are.
As there are various types of raw materials can be found in different parts of the State, it means they do not need to fork out a huge sum of investment to start their business.
Perpetuating from this, cottage and small-scale industries play an important role in preserving local arts, skills, and culture.
This is because, the productions of goods from these industries helps portray local arts, skills and culture of different parts of the State.
In the effort to further propel the cottage industries, various initiatives and programs were introduced to help the small-scale operators.
For example, a mobile application, ePreneurs was introduced by Women and Family Department Sarawak (JWKS) to help registered JWKS entrepreneurs in market their products in 2019.
As a digital marketplace for entrepreneurs to sell their items, ePreneurs is a platform for local entrepreneurs to showcase their products to a wider market audience.
Among the items and services offered on ePreneurs includes beauty products and services such as make-up and facial; local accessories such as Sarawak beaded necklace and Iban ‘sugu tinggi’; food and pastries.
ePreneurs also offers as well as health services such sauna and spa, confinement care massage and maternity care, traditional aromatic massage and therapy body massage.
Typically, cottage industries are mostly rural-based but these days, in course of time and with technological advancements, they have spread to urban areas due to the availability of transportation, marketing facilities and financial support from institutional sources.
With the right support, infrastructure and environment, the cottage industries can achieve so much in providing income and employment to the hardcore poor household as well as elevating their standard quality of living.