Technology driving positive outlook for Malaysian small businesses

Malaysia’s small businesses lead the region in innovation
Younger entrepreneurs dominate small business landscape
AI investment on the rise
High demand for funding signals continued expansion

KUALA LUMPUR, MALAYSIA – Media OutReach Newswire – 13 March 2025 – Increased technology adoption is fuelling strong expansion among Malaysia’s small businesses, with 71 per cent reporting growth in 2024 – the highest in more than a decade – according to CPA Australia’s annual Asia Pacific Small Business Survey.

The growth momentum is expected to continue, with 82 per cent of Malaysian small businesses anticipating growth this year, marking the sector’s highest level of optimism since 2012.

Confidence in Malaysia’s economy is equally strong, with 81 per cent of small businesses expecting the economy to grow in 2025, well above the Asia-Pacific average of 67 per cent.

“Malaysia’s small business sector is powered by dynamic and young entrepreneurs who are quick to embrace digital technologies,” said Yip Kit Weng FCPA, President of CPA Australia Malaysia Division.

E-commerce, new digital payment options and social media are widely embraced, with 92 per cent of Malaysian small business using social media in 2024, including as a key communication and marketing tool. On Malaysian entrepreneurs being ranked highest in innovation, Yip said the result was not surprising given 64 per cent of small business owners are younger than 40.

“Their ability to adapt quickly and invest in digital solutions is driving Malaysia’s competitiveness in the region,” Yip said.

Investment in digital tools by Malaysia’s small businesses continues to rise, with AI investment more than doubling from 11 per cent in 2023 to 27 per cent in 2024. Digital and mobile payments have become the norm, with 78 per cent receiving more than 10 per cent of their sales through platforms such as GrabPay, Touch ‘n Go and Boost.

“It is encouraging to see more small businesses embracing AI, well ahead of the government’s five-year strategic roadmap to accelerate AI adoption,” Yip said.

“Regulatory measures to support ethical practices, along with tailored measures for target groups, will further fast-track AI adoption while enhancing public trust.”

Malaysia’s entrepreneurs are also setting their sights beyond local markets. Despite global economic uncertainty, 55 per cent of small businesses expect an increase in overseas revenue this year.

To support this expansion, demand for external financing was strong. In 2024, 70 per cent of Malaysian small businesses used such funds to support growth. This trend is expected to continue this year, with 85 per cent anticipating the need for external finance.

“Given Malaysia’s strong focus on innovation, technology and exports, this demand is unsurprising,” Yip said.

The biggest challenge for Malaysia’s small businesses remains rising costs, particularly in materials, utilities, rent and taxes. Many have focused on implementing cost-control measures to mitigate these pressures.

“The strong economic environment, coupled with government initiatives to increase competitiveness and investor confidence, is helping to create a positive business climate for small businesses,” Yip said.

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CPA Australia

CPA Australia is one of the world’s largest professional accounting bodies, with more than 175,000 members in over 100 countries and regions, including more than 21,000 members in Southeast Asia. CPA Australia has been operating in Malaysia since 1956, establishing an office in 1994. We provide education, training, technical support and advocacy. CPA Australia provides thought leadership on local and global issues affecting the accounting profession and the public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at cpaaustralia.com.au

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