Empowering Malaysian SMEs into the Forefront of Tech and Digital

11 August 2023

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.


National Fourth Industrial Revolution (4IR) Policy

In July 2021, the government launched the National 4IR Policy, where AI is one of five foundational technologies. Among the AI-specific initiatives outlined in the policy are a dedicated AI park and a national AI framework.

In Budget 2022, the Malaysian Research Accelerator for Technology and Innovation (MRANTI) received a US$7 million allocation, which it plans to invest in a new AI park that will help developers in health and agriculture bring their products to market.

Malaysia National AI Roadmap 2021-2025 (AI-RMAP)

In August 2022, the Ministry of Science, Technology, and Innovation launched five technology roadmaps, including AI-RMAP and the National Robotics Roadmap 2021-2030. The AI-RMAP projects a 30% growth in Malaysia’s GDP by 2030 while McKinsey expects AI adoption to create six million new jobs by the same year.

To reach these goals, AI-RMAP outlines six strategies: establishing AI governance; advancing AI R&D; escalating digital infrastructure to enable AI; fostering AI talents; acculturating AI; and kickstarting a national AI innovation ecosystem.

Industry4WRD Drives Smart Manufacturing Ambitions

Another pandemic-era initiative was the Smart Automation Grant (SAG), which was launched in December 2020 to help SMEs automate quicker, at scale, and without incurring massive costs. As of July 2022, the Malaysian Investment Development Authority (MIDA) announced that SAFs totalling RM138.5 million had been approved for 238 companies, including SMEs from labour-intensive industries such as plastics, wood, furniture and textile.

Industry4WRD Drives Smart Manufacturing Ambitions

Through its Industry4WRD Readiness Assessment and the subsequent Intervention Fund, the Malaysian government assists businesses in assessing their capabilities and readiness to adopt Industry 4.0 technologies and processes; understanding their present capabilities and gaps; and preparing feasible strategies and plans to move towards effective adoption of Industry 4.0.

The intervention fund provides a matching grant of 70:30 on a reimbursable basis for up to eligible expenditure. As of April 2023, 299 SMEs have received funding approval for matching grants totaling RM109.2 million. Companies also have access to automation capital allowance of up to a 200% tax deduction of the first RM4 million of expenses incurred within the eight-year assessment period (2015-2023).


Seeloz Pays It Forward

Based in Silicon Valley but with deep roots in Malaysia, Seeloz introduced Supply Chain Automation Suite (SCAS), the world’s first Autonomous Requirements Planning (ARP), that redefines supply chain planning across the distinct types of supply chains. In August 2021, Seeloz partnered with Microsoft to bring SCAS to the Asia Pacific region. SCAS is a breakthrough technology that reduces inventory carrying costs by up to 40%, reduce supply chain management costs by up to 25%, and substantially boost operational efficiency in over 20 industry verticals,

In July 2022, Seeloz signed an MoU with Collaborative Research in Engineering, Science and Technology Centre (CREST) to launch Empower Malaysia, an initiative to boost resilience within major value chains in Malaysia through AI-driven supply chain automation. Empower aims to upskill 30,000 Malaysian AI talents, while boosting the resilience of key value chains within the Malaysian economy through AI-driven supply chain automation.

Aerodyne Group to Lead Global Drone Market

Aerodyne Group is a global drone services provider and the world’s leading DT3 (Drone Technology, Data Technology, and Digital Transformation). Based in Malaysia, the Group harnesses drone data and AI-powered analytics to enable businesses to scale rapidly, digitally transform, optimise operation, and boost productivity. With a presence in 35 countries worldwide, Aerodyne has strengthened its position as the catalyst in the drone technology industry. Recently, the Group inked a strategic partnership with Astralution, a drone technology pioneer from Norway to offer leading Drone-as-a-Service (DaaS) and Software-as-a-Service in the Scandinavian region.

iRadar Provides Cutting Edge Solutions for Predictive Maintenance

A Malaysian-based, iRadar specialises in AI-powered IoT solutions for smart cities, agriculture, and manufacturing. The company develops and deploys AI algorithms for data analytics, predictive maintenance, and decision-making support. Leading multinational such as National Instruments, Infineon, and Air Works utilises iRadar’s advanced algorithms and data analytics to predict and identify potential issues. It allows businesses to optimise maintenance schedules, reduce downtime, improve overall operational efficiency, and improved reliability.

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