KUALA LUMPUR, 24 October 2025 — In a pivotal move, the Association of Southeast Asian Nations (ASEAN) has spotlighted the critical role of micro, small and medium-enterprises (MSMEs) in driving regional economic growth and sustainability, with the launch of the ASEAN Centre of Excellence for MSMEs in Green Transition.
Coinciding with the forthcoming summit under Malaysia’s chairmanship, several key initiatives were unveiled including the report titled “ASEAN AHEAD: ASEAN Science, Technology, Innovation Ecosystem Foresight 2035” and the campaign “ASEAN in 2025: Shaping an Inclusive and Sustainable Future.”
ASEAN estimates that there are about 70 million MSMEs across its member states, accounting for between 97.2 % and 99.9 % of all establishments. Recognising that growth driven by large enterprises alone will not unlock the region’s full potential, the new centre and accompanying initiatives aim to bolster inclusivity and sustainable practices across ASEAN’s economy.
The launch takes place against the backdrop of the 26th meeting of the ASEAN Economic Community Council, and related informal consultations on implementation of the bloc’s Five-Point Consensus.
Why This Matters
- MSMEs as the backbone of the ASEAN economy: With tens of millions of enterprises, ASEAN’s MSME sector forms the foundational layer of jobs, innovation and resilience. The new centre underscores a shift toward empowering smaller players in the sustainability agenda.
- Green transition focus: The Centre of Excellence explicitly addresses how MSMEs can navigate the shift toward greener, more circular business models, a priority as ASEAN targets low-carbon development and sustainable growth.
- Technology & innovation integration: The “ASEAN AHEAD” report reflects the increasing importance of science, technology and innovation ecosystems in shaping ASEAN’s competitive edge through 2035.
- Inclusivity gains prominence: By embedding inclusivity into the growth agenda, ASEAN is signalling that economic development must be broad-based, not solely concentrated among large corporates or capital-intensive sectors.
- Malaysia’s leadership role: As ASEAN Chair for 2025, Malaysia is leveraging this moment to push an agenda anchored on “Inclusivity and Sustainability,” reinforcing its regional strategic positioning.
Outlooks & Considerations
While the initiatives mark strong intent, the real test lies in implementation, especially in helping MSMEs adopt sustainable practices, access technology, and integrate into regional supply chains. Challenges to watch include:
- Capacity-building and financing for MSMEs, particularly in smaller or less-developed member states.
- Ensuring the Centre’s work translates into measurable outcomes and not just high-level frameworks.
- Aligning national policies across ASEAN with regional goals, especially in regulatory, fiscal and innovation domains.
- Monitoring how SMEs in sectors like manufacturing, agriculture, and services adapt to green transition demands.
