THE 13th Malaysia Plan, which was announced on July 31, lays out an ambitious but inspiring goal – for SMEs to raise their contribution from 39.5% of Malaysia’s gross domestic product in 2024 to half by 2030.
Reaching this milestone will take more than vision – it requires the right policies, incentives and support structures that empower small businesses to thrive. With Budget 2026 on the horizon, there is a real opportunity to accelerate this journey by helping SMEs strengthen their digital capabilities and grow sustainably.
At Xero, we see firsthand the impact that digital and cloud-based tools can have – making businesses more efficient, productive, and innovative. Yet while many SMEs are eager to reap these benefits, too many still find digitalisation challenging.
Earlier this year, our research into e-invoicing readiness among Malaysian SMEs revealed a familiar pattern of obstacles: gaps in understanding, limited resources, lack of technical expertise, and concerns about data security. These challenges are not unique to e-invoicing – they reflect the broader hurdles many businesses encounter on their digital transformation path.
It’s also clear that SMEs aren’t a one-size-fits-all group. Larger SMEs often wrestle with scale and complexity, while smaller businesses worry about affordability and technical know-how. That’s why tailored solutions are so critical. Whether it’s targeted grants and subsidies for artificial intelligence and cloud adoption, public-private partnerships to deliver skills training, or practical cybersecurity guidance designed for different business sizes – support must meet SMEs where they are.
With SMEs representing 97% of Malaysia’s businesses, their potential to power long-term national growth is extraordinary. Budget 2026 is a chance to build confidence in digital adoption, equip SMEs with the tools to innovate, and ensure they remain the heartbeat of Malaysia’s economy for generations to come.
This article is contributed by Xero Asia managing director Koren Wines (pic).
Business
