Image credit: Walk Production
KUALA LUMPUR: Small and medium enterprises (SMEs) can no longer treat digital technology as an option.
Instead, it is a strategic necessity to remain competitive in a fast-changing regional economy, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said.
He said technologies such as artificial intelligence (AI), automation and digital twins have evolved from being supplementary tools into essential drivers of operational efficiency and business resilience.
"SMEs must view technology adoption not just as an upgrade, but as a fundamental shift to secure their position in a rapidly transforming industrial landscape," he said in his closing keynote address at the Asean SME Economic Forum here today.
Tengku Zafrul said AI is now widely used for predictive maintenance, quality control, customer personalisation and supply chain optimisation.
He noted that some companies are deploying AI-powered robots to detect manufacturing defects early, ensuring consistent product quality and minimising waste.
He cited the example of a Malaysian B2B electrical distributor that implemented Robotic Process Automation (RPA) to streamline its financial operations, including invoice processing and credit assessment.
"This initiative not only accelerates workflows but also improves accuracy and customer experience, allowing SMEs to serve multinational clients more efficiently," he said.
Tengku Zafrul said Malaysia's SME sector is now at a "digital tipping point", where businesses that fail to adopt new technologies risk being left behind in regional supply chains.
He highlighted the growing importance of quantum computing, which can address complex optimisation challenges in logistics, materials science and predictive analytics.
Although still nascent for SMEs, he said smart scheduling and resource optimisation tools are becoming more accessible, allowing smaller firms to model production and respond swiftly to supply chain disruptions.
In addition, many local SMEs are now using the Internet of Things (IoT) to monitor equipment, energy consumption and inventory in real time through digital sensors.
"Real-time data visibility helps accelerate business decisions and reduce operational risks," he said.
Tengku Zafrul also highlighted the emerging use of generative AI and digital twins in product design, marketing and virtual simulation.
He noted that some Malaysian SMEs in design and prototyping are already using GenAI to create product models, simulate performance and automatically generate marketing content.
Source: https://www.nst.com.my/business/corporate/2025/10/1290823/digital-transformation-now-core-sme-competitiveness-tengku