OVER the past week, I had several engaging conversations with fellow business owners about how rural entrepreneurs’ digitalisation is reshaping our industries. Today, may I share some of the key insights with our Tribune readers.
In Malaysia’s urban centres, digital tools have become second nature – whether through online banking, e‑commerce or food delivery apps, city dwellers are seamlessly connected to the digital economy. Yet, beyond the city skylines, rural entrepreneurs face a very different reality. Their enterprises, often rooted in agriculture, handicrafts or small-scale trade, remain vital to local communities but are still struggling to gain a foothold in the digital revolution.
According to the Department of Statistics Malaysia (DOSM), the information and communication technology (ICT) sector contributed 23.5 per cent to Malaysia’s GDP in 2023, amounting to RM427.7 billion. E-commerce alone accounted for RM1.2 trillion in income, underscoring the immense opportunities available in the digital marketplace. Yet, rural entrepreneurs represent only a fraction of this growth, revealing a stark digital divide that threatens to widen socio-economic inequalities if left unaddressed.
The Challenges Facing Rural Entrepreneurs
Infrastructure Gaps
Broadband connectivity remains uneven. While urban households enjoy high-speed internet, DOSM surveys show rural penetration lags significantly. In many villages, unstable connections make it difficult to maintain online stores or engage with customers. Without reliable infrastructure, digitalisation remains a distant dream.
Digital Literacy Deficit
Many rural entrepreneurs lack the skills to navigate e-commerce platforms, digital marketing or online payment systems. Older entrepreneurs, in particular, struggle to adapt. This knowledge gap prevents them from leveraging digital tools to expand their businesses.
Financial Barriers
Digitalisation requires investment – smartphones, laptops, stable internet subscriptions and sometimes specialised software. For small-scale entrepreneurs operating on thin margins, these costs are prohibitive. Access to financing remains limited, further slowing adoption.
Market Access Limitations
Rural entrepreneurs often produce niche goods – handwoven crafts, traditional foods or agricultural products. While these have strong cultural and commercial value, reaching wider markets requires digital platforms. Without branding and online visibility, rural products struggle to compete.
Trust and Security Concerns
Fear of online scams and fraud discourages participation. Many entrepreneurs are wary of digital payments, preferring cash transactions. Weak knowledge of cybersecurity practices leaves them vulnerable, reinforcing mistrust.
Solutions: Building Bridges to Digital Inclusion
Expanding Infrastructure
The government’s Jalinan Digital Negara (JENDELA) initiative aims to improve broadband coverage nationwide. Extending such programmes to rural areas is critical. Subsidies for internet access could further reduce cost barriers, ensuring entrepreneurs can connect reliably.
Capacity Building
Training programmes tailored to rural communities are essential. Workshops on e-commerce, digital marketing and financial literacy can empower entrepreneurs. Universities and NGOs can play a role, while youth mentorship – where tech-savvy younger generations guide older entrepreneurs – offers a practical solution.
Financial Support
Micro-financing schemes and government grants can help rural entrepreneurs invest in digital tools. Public-private partnerships could provide affordable devices and software, lowering entry costs.
Market Integration
Platforms like Desamall, launched under the Rural Entrepreneur Digitalisation Programme, have shown promise. DOSM reports that 3,532 entrepreneurs benefitted from Desamall, with 85 per cent reporting increased online sales. Expanding such initiatives nationwide could connect thousands more to digital markets. Branding campaigns highlighting the authenticity of rural products would further enhance competitiveness.
Digital Security Awareness
Training on safe online practices, fraud detection, and secure payment systems is vital. Collaborations with banks and fintech firms can build trust, encouraging entrepreneurs to embrace digital transactions.
Case Study: Desamall’s Success
The Desamall initiative offers a glimpse of what is possible. By combining infrastructure, training and market access, it has transformed the fortunes of thousands of rural entrepreneurs. Participants report not only increased sales but also greater confidence in using digital tools. This success underscores the importance of holistic programmes that address multiple barriers simultaneously.
The Long-Term Impact
If rural entrepreneurs are fully integrated into Malaysia’s digital economy, the benefits will be profound:
- Economic growth: Greater contributions to GDP beyond the current RM427.7 billion ICT sector.
- Social empowerment: Increased income opportunities reduce rural-urban migration, strengthening communities.
- Cultural preservation: Digital platforms allow artisans to showcase traditional crafts globally, preserving heritage while generating income.
Policy Recommendations
Expand JENDELA Coverage to Ensure Rural Broadband Access
Broadband connectivity is the backbone of digital inclusion. Expanding JENDELA coverage to rural areas ensures entrepreneurs can access e-commerce platforms, digital payments and online training. Reliable internet reduces isolation, connects communities to national markets and empowers small businesses to compete effectively in Malaysia’s growing digital economy.
Scale Up Desamall to Include More Entrepreneurs Nationwide
Desamall has already benefitted over 3,500 rural entrepreneurs, with 85 per cent reporting higher online sales. Scaling up this initiative nationwide would create a digital marketplace for traditional crafts, agricultural products and local foods. By expanding reach, Desamall can transform rural businesses into competitive players in Malaysia’s digital economy.
Introduce Tax Incentives for Rural Entrepreneurs Adopting Digital Tools
Digitalisation requires investment in devices, software and training. Tax incentives would ease financial burdens, encouraging rural entrepreneurs to adopt digital tools. Rebates for equipment purchases, internet subscriptions and training costs would accelerate digital adoption, enabling small businesses to modernise operations and contribute more meaningfully to Malaysia’s digital growth.
Develop Rural E-Commerce Hubs with Shared Logistics and Training Facilities
Logistics remain a major barrier for rural entrepreneurs. Establishing e-commerce hubs with shared delivery systems reduces costs and improves efficiency. These hubs can also serve as training centres, offering workshops on branding, marketing and financial literacy. Shared facilities foster collaboration, strengthen networks and create sustainable growth opportunities for rural communities.
Strengthen Collaboration Between Government, Private Sector and NGOs to Sustain Digital Inclusion
Digital inclusion requires a multi-stakeholder approach. Government sets policy, private firms provide technology and secure payment systems while NGOs deliver grassroots training. Collaboration ensures sustainability, combining resources and expertise to empower rural entrepreneurs. Together, these actors can build a robust ecosystem where rural businesses thrive in Malaysia’s digital future.
Conclusion
Digitalisation is no longer optional – it is essential for survival and growth. Rural entrepreneurs are the backbone of Malaysia’s cultural and economic fabric yet they risk being left behind in the digital age. By addressing infrastructure gaps, building digital literacy and expanding access to markets, Malaysia can ensure that rural communities are not just participants but leaders in the digital economy.
The statistics are clear: ICT and e-commerce are driving national growth. The challenge now is to ensure rural entrepreneurs are part of this story. With the right policies and support, Malaysia can bridge the digital divide, empowering rural entrepreneurs to thrive in a connected future.
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.
