SARAWAK’S 83,708 micro, small, and medium enterprises (MSMEs) remain the backbone of the economy, driving employment, sustaining households and anchoring community life. Yet many still depend on traditional methods – manual bookkeeping, paper records and face-to-face marketing – that limit their ability to compete in an increasingly digital global marketplace.
As technology rapidly reshapes the business landscape, digitalisation is no longer a luxury but a lifeline. It is not about adopting gadgets for the sake of modernity; it is about rethinking how businesses operate, connect with customers and manage resources. For MSMEs, digitalisation now marks the dividing line between stagnation and sustainable growth.
The real question is no longer whether to digitalise but how to do so effectively while navigating the financial, structural and skills-related challenges that many enterprises still face. What is clear, however, is that those who embrace digital tools will be better positioned to thrive in the economy of tomorrow.
Practical Steps
Digitalisation does not require a complete overhaul. Many practical, accessible tools can be adopted without disrupting daily operations:
- E-invoicing – Streamlines billing, reduces errors and ensures tax compliance but for SME with annual sales of RM1 million and RM5 million, it has been effectively postponed to January 1, 2027.
- Cloud accounting – Real-time financial visibility, transparency and easier collaboration.
- Digital marketing – Social media and e-commerce expand customer reach.
- Customer Relationship Management – Track interactions, improve service and build loyalty.
- Inventory software – Digitised stock control reduces waste and strengthens supply chains.
- Cybersecurity – Safeguards data with secure gateways, firewalls and staff training.
- ERP systems – Integrates finance, HR, supply chain and operations.
- Automation tools – Chatbots and RPA cut repetitive tasks.
- Data analytics – Provides insights for smarter decisions.
- Digital payments – E-wallets, QR codes and online banking speed up transactions.
- Remote work tech – Zoom, Teams, Slack enable flexible collaboration.
These tools are affordable, accessible, and increasingly indispensable for survival and growth.
The Benefits of Digitalisation
Digitalisation offers MSMEs transformative advantages. It boosts efficiency by automating routine tasks, reducing errors and allowing staff to focus on innovation and customer service. It expands market reach, enabling even small Sarawak businesses to sell regionally and internationally. Cloud-based tools lower costs by removing the need for expensive infrastructure, improving cash-flow management.
Digital systems also strengthen resilience, helping businesses continue operating during disruptions such as pandemics or supply-chain shocks. Just as importantly, digital records enhance transparency and accountability, building trust among customers, investors, and regulators. For MSMEs aiming to grow, digitalisation is now a critical foundation for long-term success.
Barriers to Adoption
Despite clear benefits, many MSMEs in Sarawak face significant obstacles in adopting digitalisation and these challenges fall into four main categories:
- Financial constraints arise because upfront costs for hardware, software and training can be daunting. While initiatives such as Go Digital Sarawak offer grants, they may not cover all expenses or reach every enterprise.
- Structural challenges persist as many MSMEs operate with outdated systems or fragmented processes that are difficult to integrate with new digital tools. In rural areas, poor internet connectivity further slows adoption.
- Human capital competencies remain a major hurdle because business owners and employees may lack the skills to use new systems effectively. Although training programmes exist, participation is often low due to time pressures or lack of awareness.
- Mindset barriers also play a role, as some entrepreneurs still view digitalisation as optional. A preference for familiar manual methods, fear of change, or scepticism about technology can hinder progress.
Financial vs. Structural vs. Human Capital
It is easy to assume that financial limitations are the main barrier to digitalisation. However, structural challenges and human capital competencies are equally critical. Even with funding, digital tools are ineffective without skilled staff or proper infrastructure. Likewise, without a mindset shift among business owners, digitalisation may remain superficial – limited to setting up a Facebook page rather than transforming operations.
The real challenge lies in aligning financial support with structural readiness and human capital development. Only then can digitalization deliver its full potential.
Moving Forward
Accelerating digitalisation among Sarawak’s MSMEs requires a coordinated, multi-pronged approach.
- Government support should expand grants and subsidies, ensuring accessibility for enterprises in rural areas.
- Infrastructure investment must strengthen internet connectivity across Sarawak, especially in remote communities.
- Training and education should provide practical, hands-on digital literacy programs tailored to MSME needs.
- Public-private partnerships must encourage collaboration between technology companies, universities, and business associations to deliver affordable solutions.
- Mindset change is essential, and sharing success stories of digitalised MSMEs can inspire others and reduce fear of change.
Conclusion
Digitalisation is a necessity for businesses. The benefits are clear: greater efficiency, resilience, market expansion and cost savings. The challenges – financial, structural and human capital – are real but manageable. With the right support, these barriers can be overcome.
The future of Sarawak’s MSMEs depends on their willingness to embrace digital tools and strategies. Those who adapt will thrive in the digital economy; those who resist risk being left behind. The time to act is now.
The views expressed here are those of the writer and do not necessarily represent the views of Sarawak Tribune. The writer can be reached at drjohnlau@gmail.com.
