Sim: Leverage AI to Multiply, Not Cut Human Costs

PETALING JAYA, July 11 — Corporate leaders must harness artificial intelligence (AI) as a strategic capacity multiplier rather than reducing it to a blunt tool for headcount cost-cutting, Entrepreneur and Cooperatives Development Minister Steven Sim urged today.

Companies that prematurely slash human capital allocations in favor of automation risk widening dangerous internal skills deficits and incurring drastically escalated technological maintenance overheads over the long term, the minister cautioned.

“When we treat human talent as an expense to cut, we lose the intuition, creativity and human touch that provide our competitive edge,” Sim emphasized, pointing out that premier global technology conglomerates continue to aggressively onboard software developers despite pumping record investments into AI systems.

Addressing attendees at the 11th CHT International Award 2026, the minister implored the domestic business community to look past mere defensive adaptation to market shifts, challenging them instead to take an active role in pioneering future socioeconomic trends. Sim warned that businesses content with lazily mirroring existing trajectories will inevitably face obsolescence.

“The good old days are no more. While advances such as reusable rockets and generative AI have transformed the business landscape within the past decade, the bigger challenge is keeping pace with rapidly evolving societal attitudes, culture, consumer preferences and markets. If we just drift with the wave instead of navigating it, we may sink,” he noted.

Turning his focus to domestic corporate structures, the minister characterized family-managed small and medium enterprises (SMEs) as one of Malaysia’s most potent yet underappreciated foundational pillars. He observed that their deeply embedded relational values and generational ties have continuously served as exceptional shock absorbers during economic crises.

To systematically leverage this stability, Sim revealed that the ministry is actively finalizing plans to commission SME Corp Malaysia to execute a comprehensive analytical study. The nationwide research initiative will map the distinct operational advantages and systemic hurdles unique to family-run business models, equipping policymakers with the data required to draft highly targeted structural support mechanisms.

-NMT