KUALA LUMPUR: Malaysian SMEs must embrace AI, build resilience and create higher-value products to achieve stronger growth amid global uncertainty, says Steven Sim (pic).
The Entrepreneur and Cooperatives Development Minister said businesses could no longer rely solely on predictable markets and low costs as global trade, geopolitics and supply chains become increasingly volatile.
“We have to change from being a cost-centric centre because you cannot fight pricing anymore,” Sim said when launching the Federation of Malaysian Manufacturing’s SME Conference 2026 yesterday.
Sim described the current global environment as one of “hyper-flux”, marked by rapid changes, uncertainty and volatility caused by geopolitical conflicts, trade disruptions and other crises.
He said businesses needed to shift from a “just in time” approach to a “just in case” mindset by building redundancy and securing reliable supply chains.
“Reliability, redundancy and security is a premium and businesses should view preparedness as an opportunity to create value rather than simply as an additional cost,” he said.
Sim also said Malaysia’s geopolitical neutrality and ability to maintain relationships with different countries had become an economic advantage for businesses seeking new markets.
“Malaysian business leaders should act as ‘corporate diplomats’ by engaging not only customers but also government agencies, industry groups and other stakeholders,” he said.
Sim said SMEs must also become more “AI native”, stressing that adopting AI was not simply about buying the latest software or tools.
He said companies needed the right data systems, infrastructure, talent and safeguards to make meaningful use of AI.
“Being an AI company doesn’t mean just buying an AI system,” he said, adding that businesses needed both AI experts and wider AI literacy among workers and entrepreneurs.
Sim also called for greater emphasis on creating Malaysian-owned intellectual property, technology, talent and brands instead of competing primarily on cost.
He described this as moving from “made in Malaysia” towards “made by Malaysia”, where companies create products and services with higher value and stronger competitive advantages.
Sim said his ministry had set a target of channelling at least RM15bil into the SME sector, with RM10bil already approved in the first eight months for about 270,000 entrepreneurs.
“The ministry has also aimed to help 10,000 businesses move up the growth ladder, from informal enterprises to micro, small and medium-sized companies,” he said.
Another target is to invest RM100mil to train 100,000 entrepreneurs in capacity building, while pushing the SME sector’s contribution to gross domestic product beyond RM700bil this year.
“For the medium term, we want to help at least 100 companies hit RM100mil revenue,” he said.
