Malaysian small businesses post best growth results since pandemic

• Confidence in economy high
• Cost of doing business remains a key concern
• Strong returns tied to technology spending

Sixty-six per cent of Malaysian small businesses grew in 2023 with 2024 expected to be an even better year, a new survey by CPA Australia shows.

The annual Asia-Pacific Small Business Survey found seventy-eight per cent expect to grow in 2024, the country’s best result since 2012 and higher than the survey average of 70 percent.

The upbeat sentiment is pegged to the confidence in the economy with nearly three quarters expecting it to grow this year, above the survey average of 65 per cent.

Fifty-nine per cent sought external funding for business growth in 2023 reflecting a shift from business survival in 2022.

The increasing cost of doing business, however, remains a key concern with materials, utility costs, staff costs and rent being the costs that impacted businesses the most last year. Close to 50 per cent said increasing cost negatively impacted their business.

“Young entrepreneurs are driving the momentum on innovation and technology uptake. The survey results have shown over many years that small business with younger entrepreneurs are more likely to be growing, innovating, using emerging technologies and exporting,” said Surin Segar, President of CPA Australia Malaysia Division.

Strong returns from online sales through a wider choice of new digital and payment technologies and greater social media presence are driving technology spending. Mobile apps remain the most popular technology for Malaysian small businesses to invest in 2023, with almost 50 per cent reporting their technology investment improved profitability.

Thirty-two per cent said they will introduce a new product, process or service to Malaysia or the world in 2024. This will support long-term growth and improved competitiveness of Malaysia’s small businesses.

“With many small businesses being risk averse, it is imperative for policymakers to support potentially inexperienced young people owning or in key positions to seek business advice.”

Fearing cyber risks from the increased use of technology, 52 per cent of small businesses owners reviewed their cybersecurity in the last six months compared to 48 per cent in 2022.

“It is encouraging to see the increase in cyber risk awareness as the government continues to strengthen regulatory frameworks with the new Cyber Security Bill tabled in Parliament. This is aligned with the Communications and Digital Ministry’s call for collective action and global coordination to counter cyber threats,” said Surin.

ESG focus for small businesses centred on staff health and safety, supply chain sustainability, diversity and inclusion policies. 

“We hope to see increased investment in advanced ESG practices such as renewable energy and the adoption of green and sustainable finance opportunities.”

Access the Malaysia summary and infographic

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Nirmala Ramoo
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