Johor's MSMEs embrace digital tools but face cost and skill hurdles
Micro, small and medium enterprises (MSMEs) in Johor are increasingly turning to digital tools to boost growth. E-commerce revenue in the state reached RM20.8 billion in 2022, reflecting a steady rise in online business activity. Yet, despite the clear benefits, many firms still see digitalisation as a costly burden rather than a long-term investment. The shift towards digitalisation among Johor’s MSMEs has shown promising signs. In 2022, 4,460 businesses conducted e-commerce transactions, up from just 3,212 in 2015. This growth aligns with broader trends, as e-commerce revenue in the state expanded by an average of 10.1% annually. High adoption rates of basic digital tools were also recorded, with 97.6% of MSMEs using computers, 97.3% accessing the internet, and 79% maintaining a website.
However, challenges remain significant. Many MSMEs struggle with the high upfront costs of digitalisation, often viewing it as an extra expense rather than a strategic move. Uncertainty over short-term returns further discourages investment. Beyond finances, a critical skills gap persists, with workers lacking the expertise needed to implement and manage new technologies effectively. Recognising these hurdles, SME Corporation Malaysia (SME Corp) has prioritised digitalisation as a key focus in its Business Strategic Plan (BSP) 2022-2030. The aim is to speed up technology adoption among MSMEs, enhancing productivity and streamlining operations across the sector.
Johor’s MSMEs have made progress in digital adoption, with rising e-commerce activity and widespread use of basic online tools. Still, cost barriers and skill shortages continue to slow wider transformation. Efforts by SME Corp to push digitalisation forward could help more businesses overcome these obstacles in the coming years.
