KUALA LUMPUR: Malaysian manufacturers could gain access to advanced technology and higher-value production through closer cooperation with Italian companies, Centre for Market Education (CME) said.
In its October 2026 policy brief, CME proposed linking companies from both countries through an Italy-Malaysia Enterprise Network framework.
This, it said, will allow them to combine Italian engineering expertise with Malaysia's manufacturing capabilities and regional market access.
"The purpose is not to manufacture consolidation administratively, but to lower the cost of entrepreneurial discovery.
"A network could combine Italian technology and engineering with Malaysian manufacturing capability, market knowledge and regional reach.
"It could support joint engineering, product adaptation, testing and certification, coordinated manufacturing, common export and distribution, technical training and regional after-sales," it said in the report.
CME said Italy's exports to Malaysia totalled €1.68 billion in 2025, while imports from Malaysia stood at about €1.7 billion, reflecting a near-even balance in bilateral trade.
The report said Italian official sources describe the trade relationship as complementary.
Italy supplies high-technology capital goods and Malaysia exports industrial inputs, electronics and raw materials.
"The bilateral relationship is already large enough to support a more ambitious form of industrial cooperation.
"As seen, trade is substantial and relatively balanced, and about 150 Italian companies are present in Malaysia.
"Yet the more important fact is the asymmetry in what the two manufacturing systems can contribute," it said.
CME said Italy contributes specialised machinery, process engineering, automation, industrial design, advanced components and technical expertise built up over the years.
Malaysia, meanwhile, offers access to Asian value chains, an established supplier base across several engineering fields, proximity to customers, familiarity with regional regulations and an operational base for Southeast Asia.
"For Italian firms, the constraint is often not technological quality but international operating scale.
"A specialised manufacturer may be fully capable of designing a sophisticated machine while remaining too small to justify its own engineering, service, warehousing and market-development structure across Asean," it added
CME said Malaysian firms often have production capabilities, skilled workers and access to customers but may lack design ownership, proprietary process technology and the technical specifications needed to secure higher-value functions.
It said bilateral cooperation could help bridge these gaps by combining complementary strengths from both countries rather than bringing together similar resources.
CME said internationalisation goes beyond simply linking Italian sellers with Malaysian buyers.
"A network could combine an Italian machinery producer, an Italian specialist component supplier, a Malaysian precision engineering company, a local software or controls integrator and a regional service provider under one common programme.
"Product adaptation could occur close to the customer. Selected manufacturing and assembly could be localised. Technical feedback could reach the Italian engineering team continuously.
"Malaysian firms could be qualified to European standards and gain access to new value chains, and common after-sales capacity could support a wider Asean market."
The relationship would move from a supply chain toward a knowledge and capability network, it added.
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