P020 Digital Transformation and Entrepreneurial Resilience among SMEs in Sabah, Malaysia: Evidence from Government Business Development Support Initiatives

Abstract

Small and Medium Enterprises (SMEs) play a vital role in Sabah’s economic development by contributing to employment generation, entrepreneurship development, and local economic activities. However, SMEs in Sabah continue to face challenges related to digital readiness, limited access to resources, and market uncertainties. To address these issues, the government has implemented various Business Development Support (BDS) initiatives, including financial assistance, training programmes, advisory services, and digitalisation support. This study examines the role of government BDS initiatives in promoting digital transformation and enhancing entrepreneurial resilience among SMEs in Sabah. The study adopts a qualitative secondary data analysis approach using reports and statistical publications from the Department of Statistics Malaysia (DOSM), SME Corporation Malaysia, SME Bank, and Malaysia Digital Economy Corporation (MDEC) published between 2020 and 2025. The findings suggest that digital transformation has become an important driver of SME resilience by improving operational efficiency, market accessibility, and business adaptability. Government support programmes have facilitated the adoption of digital technologies among SMEs; however, challenges such as infrastructure limitations and uneven digital capabilities remain. The study highlights the importance of strengthening targeted support initiatives to accelerate digital transformation and promote sustainable SME growth in Sabah.