Malaysian small and medium enterprises (SMEs) account for 97.2% of total business establishments, generating 38.2% of the country’s gross domestic product (GDP) and employing 7.3 million people. However, SMEs bore the brunt of supply chain disruptions, labour shortage issues, and a host of other adverse effects due to the global Covid-19 pandemic. Those who survived did so by pivoting quickly to adapt to the digital commerce space. However, SMEs still need to embrace more advanced technologies like artificial intelligence (AI) and machine learning (ML) to further automate their processes, thereby buffering their margins and insulating against future risks.

While simple automation can help businesses perform standardised, repetitive actions, AI goes one step further: a suite of technologies that enable machines to demonstrate intelligence, the ability to adapt to new circumstances, and used to amplify human ingenuity and intellectual capabilities through collective intelligence across a broad range of challenges. ML is just one subset of AI, adding an element of prediction to typical automation tasks, allowing SMEs to pre-empt maintenance downtimes, late invoices, and even labour shortages for better forward planning and cost efficiency.

Recognising this digital divide, the Malaysian government rolled out several policies, automation grants, and even talent development programmes to boost the adoption of Industry 4.0 technologies to further automate SMEs, including but not limited to AI and ML. In June 2023, these efforts collectively resulted in Malaysia being ranked 44th globally in the Global AI Index, which tracks each country’s progress in AI investment, innovation, and implementation.