Sarawak SMEs can achieve sustainable global growth by integrating digitalisation, Environmental, Social, and Governance, and cultural diversity while staying rooted in local identity.
Small and medium enterprises (SMEs) form the backbone of Sarawak’s economy, contributing significantly to employment and local identity. Embedding a global outlook and diversity into business strategy is not just an option, but it’s strategic. Yet, for long-term sustainability, the strategy approaches must be critically examined, particularly amid real challenges such as digital gaps, superficial inclusion, dependence on subsidies, and global competition.
Digitalisation as A Gateway to Global Diversification
The global market access increasingly relies on digital readiness. To support such needs, the Sarawak government has channelled RM3.5 billion in the past five years to drive digital sector growth and enhance digital infrastructure throughout the region. Among it, flagship initiatives like SME Digitise!, which offers structured digital training and mentoring. There is also the Sarawak Tech Savvy Entrepreneur Development Initiative (STEDI), a collaboration with Sarawak Business Fund (SBF), are to support digital marketing and operations to accelerate SME readiness.
While these programs help SMEs reach broader market opportunities, it is worth noting that without strong branding or quality differentiation, they risk being undercut by cheaper foreign competitors, a reality many local exporters face. Moreover, digital readiness is uneven. While urban SMEs are tapping into e-commerce, many rural businesses may still lack stable internet and technical capacity, creating a digital divide in global opportunity access.
Empowering Culture and Craft for Authentic SME Brands
Based in Sarawak, Tanoti Crafts is a social enterprise dedicated to preserving songket weaving by empowering rural and indigenous women artisans. Founded in 2012, it operates with a strong Sarawakian identity. Tanoti engages over 600 artisans across 25 remote villages, and has introduced innovative products such as leather-woven checks and modern accessories.
The brand has also gained national attention. Its songket file bag was featured at Malaysia’s 2023 Budget tabling, symbolizing culture-driven nation-building. This illustrates how cultural diversity, and social inclusion can power authentic branding and international visibility.
Yet, despite its success, Tanoti’s model also shows that building global presence requires long-term persistence. The enterprise initially endured six years of negative earnings before turning profitable, highlighting that social‐purpose ventures often face sustainability pressures.
ESG and Diversity as Drivers of Trust and Market Expansion
In a world increasingly driven by values, the Environmental, Social, Governance (ESG) integration is fast becoming a stamp of global trust. The 2025 Sarawak SME ESG Report, crafted by Alliance Bank with Sarawak Government, InvestSarawak, Monash University, and the UN Global Compact Network Malaysia & Brunei (UNGCMYB), revealed that 62% of SMEs are aware of ESG. Out of these SMEs, 66% have already incorporated ESG practices, including many who are “unconscious adopters”.
Driven by market demand and the pursuit of cost efficiency, many SMEs have used ESG commitments to unlock new customer segments and broader markets. Importantly, Alliance Bank has incentivized ESG by offering better financing terms tied to ESG maturity and streamlined diagnostic tools. This makes sustainability accessible and actionable at the SME level.
Diversity initiatives such as workforce inclusion, wellness programs, and local hiring, are integral to ESG. These signal social responsibility, enticing global investors and ethically conscious consumers while anchoring the SMEs in resilience.
Digital, Cultural, and ESG Readiness for SMEs
To truly scale globally, SMEs need to fuse digital readiness, cultural awareness, and ESG-centered diversity into their DNA. Policies promoting export readiness such as low-interest loans, capacity programs, and Malaysia External Trade Development Corporation (MATRADE) export ambassador services catapult these SMEs onto international platforms.
Recognising the SME sector’s high digital competitiveness and sustainability transformation, platforms like the Platinum Business Awards 2025 now value culture and ESG alongside profit, shifting norms toward more holistic success metrics.
However, such award can sometimes end up celebrating the big, already successful organisations, while the smaller ones doing good work in their communities go unnoticed. If support isn’t shared more fairly and tailored to the needs of tiny, rural businesses, the push for global growth might actually make the gap bigger between thriving city-based organisations and struggling rural ones, instead of helping everyone grow together.
How SMEs Can Connect Heritage with Global Markets
Imagine a Sarawakian food producer in rural Miri who instead of just making snacks to sell at the local market, this entrepreneur sources ingredients from indigenous farmers, such as wild ginger, mountain rice, or jungle herbs that carry generations of knowledge.
On the packaging, the business doesn’t just list ingredients; it shares stories of the people behind them and the traditions that inspire the recipes. The products are then sold online, reaching customers not only in Kuching or Kuala Lumpur but also to Sarawakian diaspora living in Singapore, Australia, or the UK who miss the taste of home.
In addition, the business uses eco-friendly packaging and treats workers fairly, paying them decent wages and creating opportunities for women and young people in the village. What this means is that the product isn’t just food but a bundle of culture, fairness, and sustainability that speaks to global customers who want authentic, responsible, and meaningful products.
In this way, the local entrepreneur balances being proudly Sarawakian while appealing to international tastes, showing that even a rural SME can connect local heritage with global markets.
Essentially, Sarawak SMEs stand at the crossroads of global ambition and local authenticity. A global outlook, powered by digital transformation and ESG, and enriched by diversity, offers a strategic path forward. But this path must be walked critically. Sustainability demands addressing the digital divide, transcending superficial inclusion, and encouraging self-reliance beyond government grants.
By anchoring business strategy in authentic diversity, credible ESG practices, and resilient digital capacity, Sarawak’s SMEs can transition from local players to global contenders, not just economically, but ethically and culturally.