Malaysia AI In Small and Medium Business Market Estimated to Grow at a CAGR of 21.89% During the Forecast Period 2022-2027

“Malaysia AI In Small and Medium Business Market”
Adoption of the Artificial Intelligence for Lowering Operational Costs of Enterprises Drives the Malaysia AI In Small and Medium Business Market Growth.

Globally, the Malaysia AI In Small and Medium Business Market is estimated to be $23,267.5 million in 2021 and is analyzed to grow at a CAGR of 21.89% during forecast period 2022-2027. AI can influence and assist SMEs in two ways: by changing their business environment and making it easier for them to do business, or by allowing them to modify their business models and practises, allowing them to expand their reach and productivity. These two dynamics are obviously intertwined, as SMEs adjust to changing business situations by modifying their processes and products, or by innovating to change market conditions using Data Analysis. Huge investment in AI around the globe is driving the Malaysia AI in Small and Medium Business market. AI is referred to as the fourth industrial revolution. E-commerce, healthcare, and insurance are the three industries that dominate AI in SMEs. AI has the potential to impact a variety of business operations through deployment of artificial neural networks, genetic algorithms, machine learning and predictive algorithms. It will be impacting cost structures as well as the value generation process inside a company. The business functions where AI might have the most influence include marketing and sales, Customer Engagement, supply chain management, and production.

Malaysia AI in Small and Medium Business Market Segment Analysis – By Deployment Mode

The market for Cloud deployment model is analyzed to grow at highest CAGR of 32.29% during the forecast period 2022-2027. Businesses are turning to the cloud approach to solve problems that traditional IT infrastructure resolves with difficulty. Cloud bridges the gap between IT and companies by increasing agility and efficiency while also providing low-cost IT resources quickly. It enables businesses to scale up their applications and infrastructure as needed, while still providing users with high-speed performance and reliability. Furthermore, device connections to the Internet of Things, Data and Intelligence, and Intelligent Automation enable continual development of cloud-based business operations. According to Enterprise Cloud Index (ECI) report 2021, nearly all Malaysian respondents (96%) picked hybrid cloud as the optimal infrastructure for their organizations, surpassing those in the APJ region (90%) and the worldwide answer pool (87%). Malaysian respondents now operate somewhat more hybrid clouds than the norm, with 14% penetration, which they expect to increase to 57% in five years.

Malaysia AI in Small and Medium Business Market Segment Analysis – By Vertical Outlook

The manufacturing sector dominated the global market in 2021 at 20.9% on the basis of vertical production, and is expected to rise in the forecast period. The pandemic of COVID-19 has prompted new uses and technical advancements in the field. It has expedited AI adoption in industries like healthcare. In order to respond to the crisis, AI-based tools and solutions are being deployed in large numbers. Technology behemoths including Microsoft, Google, Apple, Amazon, and Facebook are pursuing projects in remote patient-clinician communication, contact tracing, and medication research. Various organisations saw a large rise in consumer pressure during the epidemic, but their number of available personnel reduced. Various contact centres were unable to meet demand or were forced to close due to lockdown limitations, resulting in high wait times for customer support inquiries and a negative impact on the customer experience. As a result, conversational AI has risen to the top of the list of technology enablers. In April 2020, Huawei Malaysia has partnered with Malaysia’s Ministry of Health to deliver a Huawei Cloud AI-assisted Diagnosis solution to Sungai Buloh Hospital, empowering local medical workers with AI skills by delivering an AI solution for CT image analysis of potential COVID-19 patients. The Huawei Cloud AI-assisted quantitative medical image analysis technology, which was utilised to help deal with the COVID-19 issue throughout the world, can analyse hundreds of CT scans in seconds, pinpointing lesions, and clinicians can now deliver diagnosis findings in under a minute.

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Malaysia AI in Small and Medium Business Market Segment Analysis – By Platform

In Store segment generated revenue of $169.0m in 2021 and is projected to grow  by 25.37% through 2027. COVID-19 has been verified to be spreading to Malaysia from January 25, 2020. Within two months, there had been over 2908 confirmed cases, making it the most widespread illness in Southeast Asia. The Malaysian government has planned to enact a “Movement Control Order” (MCO) to prevent the spread of positive cases in the country via social isolation. This announcement highlights the issue of Malaysian SMEs’ long-term viability amid the COVID-19 crisis, as well as the effect of MCO. SMEs constitute the backbone of Malaysia’s economy, accounting for 98.5 percent of all company enterprises (DOSM, 2019). According to a recent poll conducted by the Malaysian SME Association, more than 51.2 percent of SMEs are predicted to lose more than RM500,000 in the next six months. The pandemic has revealed the gaps and worsened the risks in Malaysia’s private sector, according to the World Bank in its 24th Malaysia Economic Monitor: Weathering the Surge report. This is particularly true for SMEs, who have been badly impacted by both supply and demand shocks. Small businesses continue to face more severe revenue shocks than medium and large businesses, and non-exporters face more severe revenue shocks than exporters.

Malaysia AI in Small and Medium Business Market Drivers

High adoption of the artificial intelligence for lowering operational costs of enterprises  drives the market growth

AI can help SMEs do activities more efficiently with less people, resulting in lower operating costs: an important strategy in today’s difficult economy. According to Microsoft and IDC Asia/Pacific, artificial intelligence (AI) boost Malaysian productivity by up to 60% by 2021. In January 2021, RHB Banking Group introduced a smartphone app that employs artificial intelligence to help SMEs submit loan applications faster. SMEs are now automatically onboarded and may submit loan applications from anywhere. Face recognition is aided by AI and big data in the app, which allows for speedier processing in real time. According to The Edge, RHB plans to use this app to fund RM500 million (US$121 million) in small company support in the coming year. In recent years, the SME sector has risen faster than the broader economy, therefore widespread adoption of AI will be a game changer for Malaysia. According to the SME Corporation, the SME sector contributes 36.6 percent of the nation’s Gross Domestic Product (GDP). Malaysia is also providing entrepreneurs with AI capabilities to help them achieve their growth goals. MIMOS Berhad, a national applied research agency, recently established the Centre of AI for Future Industry to train experts in AI and IoT in 2021.  In the face of IR4.0, the agency encourage SMEs to adopt the latest technologies, and one of the main parts is AI. SMEs must both complement and work with Malaysia’s key sectors to ensure successful growth. In 2021, according to  director of the Centre for Artificial Intelligence & Robotics (CAIRO) at the Universiti Teknologi Malaysia, AI and robotics firms in Malaysia need to focus on technologies for specific local applications (such as palm oil or fisheries) and affordable technologies for local and regional industries.

Rising incorporation of other advanced technologies including Block-chain positively impacts the market growth

Block-chain technology allows businesses to keep transaction records on many computers and distributes access to the digital database to any authorised individual. Records are updated in real time across all platforms, removing the requirement for an intermediary to validate the data. SMEs will have easy access to loan data, smart contracts, and greater commerce. SME crowd funding platforms, for instance, can utilise block-chain to deliver information to and get additional money from foreign investors. SMEs will be able to connect with international investors and clients in a more transparent and secure manner. MoneyMatch, a Malaysian firm, leverages block-chain to assist SMEs in paying overseas suppliers.

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Malaysia AI in Small and Medium Business Market Challenges

Slow Digital Adoption and Productivity Gap

The country’s SMEs are still lagging behind major enterprises in terms of digital adoption, and the country’s productivity gap is widening as a result of the Covid epidemic. This factor thus acts as hindrance towards the market growth. Small and medium businesses account for 98.5% of Malaysia’s 920,624 commercial entities (SMEs). According to the World Bank Malaysia in June 2021, despite being the backbone of the country’s business environment, digital adoption among SMEs falls behind that of bigger firms. The pandemic has revealed the gaps and worsened the risks in Malaysia’s private sector, according to the World Bank in its 24th Malaysia Economic Monitor: Weathering the Surge report. This is particularly true for SMEs, who have been badly impacted by both supply and demand shocks. Small businesses continue to face more severe revenue shocks than medium and large businesses, and non-exporters face more severe revenue shocks than exporters.

Malaysia AI in Small and Medium Business Market Landscape

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the Malaysia AI in SMB market. In 2020, the market of Malaysia AI in SMB market has been consolidated by the top players

Google
Microsoft
IBM
Amazon
Fusionex
Genaxis
Symprio
Virtual Spirit Technology
Workspez
SAP

Recent Developments

In September 2021, Google Cloud  and C3 AI announced of their partnership to help organizations across various industries  to accelerate their application of artificial intelligence (AI) solutions. Google Cloud will work closely with C3 AI to ensure applications  such as C3 AI Suite, C3 AI CRM, and C3 AI Ex Machina support the accuracy and scale of multiple Google Cloud products such as Google Kubernetes Engine, Google BigQuery, and Vertex AI, thus helping customers to build and deploy ML models swiftly & effectively.

In August 2021, Microsoft Malaysia and Silicon Valley-based Seeloz Inc. (Seeloz) signed a Memorandum of Understanding (MoU) to assist the Malaysian supply chain ecosystem with AI technology to boost the major strategic sectors in Malaysia such as manufacturing, oil and gas, utilities, palm oil and public services.

Key Takeaways

According to Dataiku, the world’s largest AI and machine learning platform provider, study 2021, AI development in the Asia Pacific area is accelerating. In 2020, 43 percent of enterprises in the APAC area invested in AI technology-based platforms to consolidate resources and business. AI platforms can be game changers for organisations at all levels of AI development.

Furthermore, the market growth in Malaysia is analyzed to grow at highest CAGR of 26.69%. High adoption of the artificial intelligence for lowering operational costs of enterprises  drives the market growth. Proliferation of block-chain technology across different end user verticals also contributes towards the market growth.

In April 2021, Microsoft Corporation announced its “Bersama Malaysia” (Together with Malaysia) initiative to empower Malaysia’s inclusive digital economy as well as supporting the nation’s digital transformation across all sectors. As part of this initiative, every organizations in Malaysia are allowed to achieve innovations using AI and build a smarter nation.

In September 2021, IBM Corporation announced the launch of new AI and automation capabilities in IBM Watson Assistant. It is primarily designed to streamline businesses process by creating enhanced customer service experiences in many areas such as phone, web, SMS and any messaging platform.

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