by LYDIA NATHAN / pic by MUHD AMIN NAHARUL
THE digitalisation of small and medium enterprises (SMEs) in Malaysia could contribute between RM79 billion to RM99 billion to the country’s GDP by 2024, a study conducted by Cisco Malaysia found.
According to the 2020 Asia Pacific SME Digital Maturity Study, 64% of SMEs are considering digitally platforms to bring new products and services to the market compared to 33% last year.
“Additionally, 59% recognised that competition is transforming and they must keep pace, while 43% said they are transforming due to demand from customers,” the study said.
Cisco Malaysia MD Albert Chai said given that 98.5% of all businesses are SMEs and contribute 38.3% to the country’s GDP, it makes them a critical component to the trade and commercial landscape.
“The resilience, agility and digital transformation capabilities of SMEs will play a pivotal role in Malaysia’s post-Covid-19 economic recovery.
“Despite being the hardest hit, SMEs have shown great resilience and have leveraged technology to continue to operate and serve their customers during the period,” he said.
Chai added that from the data collected, purchasing or upgrading of information technology hardware is the top technology investment priority for SMEs in Malaysia at 18% while 14% upgrade software and 11% focus on cyber security.
“SMEs are also facing challenges in adopting digitalisation strategies. 21% of the respondents said a shortage of digitally skilled talent is the biggest hurdle faced, followed by 16% saying there is lack of budget and/or commitment from management while 12% lack a proper digital transformation roadmap,” he said.
Cisco director for small business and commercial for Asean, Raz Mohamad, said while SMEs currently are facing the biggest challenges to their operations, they also have an unprecedented opportunity to accelerate their digital transformation.
“Technology not only can help solve some of their key challenges and revitalise their operations, but it also helps them sustain long-term growth. But all stakeholders will need to play a role,” he said.
Raz said he is glad the government has already taken a lead and put in place measures and strategies to this end.
“We are proud to play a part in this at Cisco as our networking academy has trained over 80,000 students in Malaysia in various information communication and technology skills since its inception. We have also launched a series of curated products and solutions specifically for the SME sector under the Cisco Designed portfolio and introduced a 0% financing for SME customers in the country,” he added.
The second-year study also highlighted that Malaysian SMEs have moved into the Digital Observer stage, an improvement from Digital Indifferent in 2019.
“Within the region, SMEs in Singapore, Japan and New Zealand continue to lead the Digital Observer group, with no changes in their ranking compared to 2019. However, mainland China, Taiwan and Thailand surpassed Korea, Hong Kong and Malaysia, respectively. There has also been notable progress made by SMEs in Indonesia and Vietnam,” Chai said.
He added that almost 70% of SMEs in the Asia Pacific are accelerating the digitisation of businesses due to the pandemic.
“Of the respondents, 86% say they believe digitalisation will help in developing future resilience against crises like Covid-19,” he said.