Malaysia Small Business Growth: AI Investment & Tech Fueling Surge
13th March 2025, Kathmandu
Malaysia’s small businesses are thriving in 2024, with technology adoption driving unprecedented growth. According to CPA Australia’s annual Asia Pacific Small Business Survey, 71% of Malaysian small businesses reported growth – the highest in over a decade.
Malaysia Small Business Growth
With 82% of small businesses expecting further expansion this year, optimism in the sector has reached its highest level since 2012.
Malaysia Leads the Region in Innovation
Malaysia’s small businesses are at the forefront of innovation, outperforming other Asia-Pacific countries. This comes as no surprise, given that 64% of small business owners in Malaysia are under 40, making them more adaptable to digital transformation.
Key factors fueling innovation include:
- E-commerce and digital payments: Businesses rapidly embrace platforms like GrabPay, Touch ‘n Go, and Boost.
- Social media dominance: 92% of small businesses use social media for communication and marketing.
- AI investment boom: AI adoption has surged from 11% in 2023 to 27% in 2024.
“Their ability to quickly adapt and invest in digital solutions is driving Malaysia’s competitiveness in the region,” said Yip Kit Weng FCPA, President of CPA Australia Malaysia Division.
AI Adoption Surges Ahead of Government Plans
Malaysia’s government has a five-year roadmap to accelerate AI adoption, but small businesses are moving ahead of schedule. Investment in AI more than doubled in just a year, highlighting the sector’s confidence in automation, data analytics, and AI-driven decision-making.
“It is encouraging to see more small businesses embracing AI well ahead of the government’s strategic roadmap,” Yip noted.
Global Expansion & Strong Demand for Financing
Despite global economic uncertainty, Malaysian small businesses are looking beyond local markets. 55% expect an increase in overseas revenue in 2024, reflecting growing confidence in exports and international trade.
To support this expansion, demand for external financing is at an all-time high:
- 70% of businesses used external funding in 2024.
- 85% anticipate needing additional financing this year.
“Given Malaysia’s strong focus on innovation, technology, and exports, this demand is unsurprising,” Yip said.
Challenges: Rising Costs & Cost-Control Strategies
While growth remains strong, rising costs present a major challenge for Malaysian entrepreneurs. Key cost pressures include:
- Materials and utilities
- Rent and taxes
To mitigate these challenges, businesses are implementing cost-control strategies while leveraging technology to boost efficiency.
Malaysia’s Business Outlook for 2025
Confidence in Malaysia’s economy is soaring, with 81% of small businesses expecting economic growth in 2025—well above the Asia-Pacific average of 67%.
“The strong economic environment, coupled with government initiatives to increase competitiveness and investor confidence, is helping to create a positive business climate,” Yip stated.
About CPA Australia
CPA Australia is one of the world’s largest professional accounting bodies, with over 175,000 members in 100+ countries, including 21,000+ in Southeast Asia. Established in Malaysia in 1956, CPA Australia provides education, training, technical support, and advocacy to help businesses grow sustainably. Learn more at cpaaustralia.com.au.
Conclusion
Malaysia’s small businesses are leading the region in innovation, digital transformation, and AI adoption. As confidence in the economy grows and businesses expand globally, technology will continue to drive success in 2024 and beyond. Entrepreneurs who embrace digital tools and cost-effective strategies will remain at the forefront of Malaysia’s dynamic business landscape.
For more: Malaysia Small Business Growth
