How AI is Powering the Next Wave of MSME Growth in Malaysia

By Sandy Liew Mei Xuan, Lecturer, Sunway Business School, Sunway University

A New Morning Routine for Malaysian MSMEs

It’s early morning in Kuala Lumpur. The city slowly awakens—shopfronts open, food stalls prepare their first orders, and delivery vans navigate narrow streets. But behind the familiar scenes, something new is at play. Notifications ping, chatbots reply instantly, and inventory updates appear in real time—all powered by artificial intelligence (AI).

For micro-, small-, and medium-sized enterprises (MSMEs) in Malaysia, AI is no longer a futuristic concept. It has become part of the daily routine, transforming businesses from local cafés to independent logistics firms.

Celebrating MSME Day 2025: A Shift in Mindset

On MSME Day, June 27, 2025, we honour the 1.2 million enterprises that form the backbone of Malaysia’s economy. They fuel job creation, serve communities, and shape urban life.

But today, these businesses are not just looking to grow bigger—they’re learning to grow smarter. AI is no longer a luxury reserved for tech giants. It's becoming accessible, affordable, and transformative for even the smallest business owner.

Start Small, Think Smart

Getting started with AI doesn’t require massive investments. Simple actions can yield big results:

• Use AI chatbots to answer enquiries
• Automate reminders or social media posts
• Explore built-in AI tools in existing software like accounting or email platforms

The key is to start small and learn through action. Attend a workshop, join a short course, or ask questions in local business communities.

AI Isn’t Replacing People, It’s Reclaiming Time

One of the biggest misconceptions about AI is that it replaces human workers. In reality, AI helps entrepreneurs regain their time. It handles repetitive tasks, improves decision-making, and frees up business owners to focus on what matters most; creativity, service, and strategy.

This year’s MSME Day theme reminds us: the future of enterprise is not exclusive to large, well-funded corporations. With the right support, even the smallest business can embrace the digital age.

Support Is Growing for Digital Adoption

Malaysia is actively supporting MSME digitalisation. Initiatives like the SME Digitalisation Grant and MDEC’s Go Digital programme are helping entrepreneurs access user-friendly, scalable digital tools.

But success isn’t just about technology. The digital shift requires belief, guidance, and community. Many MSME owners are willing—but overwhelmed. The real challenge is reducing complexity and building confidence.

Closing the Digital Divide with Mentorship

For digital adoption to succeed, MSMEs need:

• Mentorship to reduce fear of complexity
• Peer learning to share real-world experiences
• Accessible training that feels personal, not technical

Empowering MSMEs is a collective responsibility. When we embed trust and offer real support, we help every entrepreneur make better decisions and move into the future with confidence.

AI Will Amplify, Not Replace, Malaysia’s Business Soul

AI will not strip away the heart of Malaysian MSMEs. Instead, it will refine tradition, amplify personal stories, and enable local businesses to scale with global intelligence.

Let MSME Day 2025 be more than just a celebration. Let it be a commitment—to elevate, simplify, and inspire the people who power Malaysia’s economy.