Kuala Lumpur, April 3: A significant 66 per cent of Malaysian small businesses experienced growth last year, with prospects for this year looking even brighter, according to the latest survey conducted by CPA Australia.
The annual Asia-Pacific Small Business Survey revealed an optimistic forecast, with 78 per cent of Malaysian small enterprises expecting to expand in the current year, marking the most positive outlook since 2012 and surpassing the survey’s average expectation of 70 per cent.
This confidence is largely attributed to the positive economic outlook, with nearly three-quarters of respondents anticipating the Malaysian economy to grow this year, a sentiment that is notably above the survey’s average of 65 per cent.
The shift towards seeking external funding for expansion last year by 59 per cent of businesses indicates a move from merely surviving in 2022 to thriving last year.
However, the survey also highlighted ongoing concerns, particularly regarding the rising cost of doing business.
Key pressure points for small businesses in the past year included material and utility costs, wages, and rent, with nearly half reporting that these increasing costs had a negative impact on their operations.
The survey shed light on the pivotal role of young entrepreneurs in fueling business growth through innovation and technology adoption.
According to Surin Segar, President of CPA Australia’s Malaysia Division, businesses led by younger entrepreneurs are more likely to experience growth, innovate, embrace new technologies, and engage in export activities.
Digital and payment technology advancements, coupled with an enhanced social media presence, have led to significant gains from online sales, prompting increased technology investment.
Mobile applications emerged as the leading technology focus for Malaysian small businesses last year, with about half of the respondents acknowledging improved profitability due to technology investments.
Looking ahead, 32 per cent of businesses plan to launch new products, processes, or services in Malaysia or globally this year, aiming to bolster long-term growth and competitiveness.
The survey also highlighted the importance of policy support for young and potentially inexperienced entrepreneurs to navigate business challenges and seek advice.
Amid the digital push, concerns over cybersecurity have prompted 52 per cent of small businesses to review their cybersecurity measures in the last six months, reflecting an increased awareness of cyber risks.
This comes as the government strengthens its regulatory framework, including the introduction of a new Cyber Security Bill, aligning with the Communications and Digital Ministry’s call for a collective and coordinated global effort to counter cyber threats.
The survey also noted a focus among small businesses on Environmental, Social, and Governance (ESG) practices, particularly regarding staff health and safety, supply chain sustainability, and diversity and inclusion policies.
There is a hopeful anticipation for an uptick in investments towards more advanced ESG practices, including renewable energy and green, sustainable finance opportunities.
As Malaysian small businesses gear up for a promising year, the blend of innovation, technology adoption, and a keen focus on sustainability points towards a robust and resilient small business sector poised for significant growth and impact this year.
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