Photo (official): (From left to right) Prime Minister Dato' Seri Haji Mohammad Najib Razak; with Malaysia Digital Economy Corporation (MDEC) Chairman Tan Sri Sidek Hassan; and MDEC CEO Datuk Yasmin Mahmood.
Following the recent 29th Malaysia Implementation Council meeting (ICM), Prime Minister Datuk Seri Najib Razak has announced a new stream of initiatives to boost nationwide digital transformation.
This stepping up gear brings to mind the 2020 vision - which is still seen as a major milestone of development for Malaysia - a year by which the nation wants to achieve a digital, developed economy status.
With a view to becoming a high-income knowledge-based society, MDEC spearheaded government initiatives such as the establishment of the country's Digital Free Trade Zone (DFTZ) and programmes for the Rakyat (the People) such as eUsahawan.
Shortly after chairing the ICM (19 October 2017), the prime minister first expressed his appreciation for the efforts of the agencies and organisations - with Malaysia Digital Economy Corporation (MDEC) in the vanguard - working to navigate the digital economy towards a more productive Malaysia.
"I really believe that digital economy can become the engine of growth for Malaysia," Najib continued. "Although what we are experiencing today is amazing, I want to further challenge MDEC and all involved in driving the digital economy of the country and get it to supercharge our country's economy. In fact, I want it to be one of the sectors that will power our growth."
Vowing to take the government's commitment to drive Malaysia's Digital Economy to a higher level, Najib's wide-ranging announcements included a national artificial intelligence framework, digital accelerators, new company builder tech startup funds from Mountain Partners Europe and Bridge IP Japan, as well as new digital transformation acceleration programmes for mid-tier companies.
While the prime minister explained many of the new initiatives (see below), he added that more details about the new initiatives will be revealed in the forthcoming national Budget 2018 proposals.
Innovation lives by implementation
Within the Digital Malaysia matrix, various national agencies and industry bodies - such as MDEC, research agency MIMOS, NanoMalaysia, CyberSecurity Malaysia, SMECorp and industry association PIKOM - have been working to encourage expansion and growth through technologies, talent development and other enablers.
Some recent milestones have also been mapped in an in-depth interview with MDEC's chief executive officer Datuk Yasmin Mahmood earlier this year. (See - Deep Dive into Malaysia's Digital Economy - Part 1 and Part 2.)
The vision and innovation has been buoyed by a hub strategy, giving an implementation framework, which allows for government and private industry partnerships across key growth sectors.
Among recent major moves designs to enable growth is the Digital Free Trade Zone (DFTZ), designed to give greater power to eCommerce growth. (See also Computerworld Malaysia's Deep Dive with Jack Ma on Malaysia and the Digital Silk Road and the feature on Why DFTZ will double Malaysia's SME exports)
While innovation and vision is clearly not lacking, a sound path rests on solid implementation. Early last year, MDEC sounded a clarion call for local companies to grow rapidly into the Asean - which was estimated to be worth about US$48 billion (October 2016) - and global markets through a new Global Acceleration and Innovation Network (GAIN) programme.
in a recent Computerworld Malaysia interview, MDEC's vice president for enterprise development, Gopi Ganesalingam, said the GAIN programme was helping Malaysian companies gain more visibility and credibility across the region.
Potential for further funding has been opened up by Bursa Malaysia's [Malaysia's stock exchange] new Leading Entrepreneur Accelerator Platform (LEAP) Market initiative. Bursa Malaysia's chief executive officer Datuk Seri Tajuddin Atan explained LEAP has been designed for small and medium enterprises (SMEs).
The Story so far
The prime minister detailed recent success stories. "Malaysian companies are stamping their mark globally; for example, Elsoft was recognised by Forbes Asia as 'Best Under A Billion' in 2015 and 2017. Among MNCs, we are already moving up the services value chain."
"We notice that there is a strategic shift in investments," Najib pointed out. "Where we used to be a base for shared services, MNCs are now using Malaysia as a hub for catalytic digital technology and services. One such example is French company Dassault Systemes, a world leader in 3D design, who has chosen Malaysia to host their Global Development Centre for 3D Business Experience Platform."
"In a hyper connected world, it is becoming abundantly clear that artificial intelligence (AI) is the defining force of the fourth industrial revolution," he said. "AI is the natural progression from data analytics, and as such, Malaysia will develop a National AI Framework. This will be an expansion of the National BDA [big data analytics] Framework, and its development will be led by MDEC. AI could well be a 'game changer' in improving the lives of Malaysians."
"On the start-up side, the Malaysian tech start-up scene is growing and vibrant," Najib reported. "There are several Made-in-Malaysia regional champions that we see today. iflix, a three-year-old startup that managed to roll out services to 30 countries and five million customers, while having access to data analytics, artificial intelligence and machine learning. And it is fascinating that iflix does not own servers or data centres. Cloud allows them to be agile and scale fast to meet growing demands while keeping capital expenditure low. Presently, iflix has a turnover of US$130 million and raised US$179 million in the latest round of funding. We need to see more rapid growing start-ups like iflix in Malaysia."
The prime minister also pointed to the progress of another initiative called the Malaysia Tech Entrepreneur Programme (M-TEP). "This initiative has attracted interest from several entrepreneurs from all across the world and shows that our initiatives have global appeal. It is encouraging to know we have received applications from entrepreneurs from more than 10 countries, including Germany, India, Australia, Singapore, UK and US."
"On a wider industry-level, we hope to accelerate digital adoption by establishing the Digital Transformation Acceleration Programme (D-TAP) for large and mid-tier companies, who contribute 63.4 percent of the GDP," said Najib.
Other early fruits include Malaysia being named as the winner of the Asian-Oceanian Computing Industry Organisation's (ASOCIO) Global ICT Excellence Award for Digital Government - essentially for DFTZ - at the World Congress on Information Technology (WCIT) and ASOCIO ICT Summit held recently in Taipei, Taiwan.
Photo: Malaysia Digital Economy Corporation (MDEC) vice president (corporate affairs) Razaleigh Zainal (centre) with (from left to right) MDEC vice president (enterprise development) Gopi Ganesalingam, former ASOCIO chairman Abdullah H. Kafi, current ASOCIO chairman David Wong and immediate past ASOCIO chairman Bunrak Saraggananda.
The talent challenge
Among the ongoing challenges is developing the talent necessary to achieve transformation and to proactively lead disruption. (See - Malaysia's battle plan for digital disruption: part 1 of an exclusive with MDEC's Datuk Yasmin)
"We have acknowledged that the greatest investment in this new age of industry will, as ever, be in the people," the prime minister said. "We have specific initiatives targeted to key communities such as youth, B40, SMEs and the digital entrepreneurs, as we believe the Rakyat [the people] is at the heart of this growth."
"One factor to grow the nation's Digital Economy is building the right talent pool," Najib affirmed. "As we manoeuvre and continue to establish niche areas in the Digital Economy, our competitive weapon is talent development. According to the World Economic Forum (WEF), 65 percent of children in schools today will end up working in completely new job types that do not yet exist. This is a call to action that cannot be ignored."
"I'm extremely pleased with the progress of the MyDigitalMaker movement that was shared with the council earlier," he added. "I am inspired by young talents, such as Ariff Amir Ali, a 12-year-old student who has developed Internet of Things (IOT) prototypes since the age of 10. He also represented Malaysia in Hong Kong and Tokyo." (Also see - From consumption to creation: IBM Malaysia supports MDEC 'digitalmaker' drive)
What the new announcements signal
A critical aspect of the new moves lies in the cloud. "We will introduce the 'Cloud First' Strategy to the national agenda, starting with the public sector," Najib explained.
"We have seen how cloud is fundamental to an organisation's digital transformation," he said. "Cloud adoption will enable the government to rapidly deliver innovative public sector services to the Rakyat without incurring high levels of capital expenditure to invest in the IT infrastructure such as data centres, servers and storage."
"This enables the government to allocate resources for more impactful programmes for the Rakyat. With this strategy in place, it is without doubt that the government is taking the lead in embracing digital transformation," Najib said.
He said the government is also encouraging cloud adoption by the private sector. "In the case of regulated industries such as the banking and financial services, healthcare and telecommunications, regulators are encouraged to accelerate the publishing of progressive guidelines for companies in these sectors to reap the benefits of cloud whilst maintaining compliance to regulations."
Much more work lies ahead. "We have started our digital transformation, but our industries are still far from being digitally ready," Najib said. "The challenges noted include a lack of structured approach, budget limitations, shortage of digital workers as well as the perception that digital transformation is too 'fast paced and complex'."
To speed up the transformation, "we will appoint Digital Transformation Labs to provide consultancy and assist in prototyping new digital products and services. The labs will then match participant companies to digital companies," he said.
"This outcome driven programme intends to achieve three main outcomes - increased productivity, reduction in foreign labour dependency as well as create a new business model or source of growth for the participant companies," Najib said, adding that the model has already been tested on Top Glove and Gamuda with encouraging results.
"By digitising the chemical testing line, Top Glove managed to completely remove the need to allocate labour for this task, as well as reduce unplanned downtime by 100 percent," he explained. "Gamuda's mall management were able to reduce man-hours by 50 percent, while fully digitising their processes. The next step for Top Glove and Gamuda is to scale this approach to their other production lines and properties respectively."
"Last year, MSC Malaysia reported a RM16.3 billion in new investments and recorded RM19.1 billion in export sales," said the prime minister. "Today, I am proud to share that we have accomplished our goal of achieving 18.2 percent contribution to GDP in 2016. This is not a small feat, and we can be very proud of it. In fact, this is a motivation for Malaysians to continue to participate in the Digital Economy and set an even higher benchmark for ourselves."
Pointing the way ahead, Najib said: "I am confident if we continue our efforts, Malaysia's Digital Economy will account for 20 percent of GDP by 2020. With a sustained push by all stakeholders, we will be on track to grow the Digital Economy contribution to reach the targeted value of RM324.9 billion by 2020, as set out in the 11th Malaysia Plan."
"This is the Year of the Internet Economy for Malaysia, and I am glad to note that everyone has worked very hard to generate a larger impact for the nation. I can see that this hard work comes from a passion in all of you to see positive change, driven by the latest technologies," the prime minister said in his closing remarks.
The World Congress of IT (WCIT) has already been successfully hosted by Malaysia in 2008 with involvement from MDEC, PIKOM, and WITSA; this major gathering of government, ICT and academia is set to take place for the second time in Kuala Lumpur - in the year 2020. This adds another significant deadline as well as a major milestone for Digital Malaysia's ongoing trajectory of achievements.
To find out more about digital transformation in Malaysia, see:
- Disrupting the disrupters in Malaysia: part 2 of an exclusive with MDEC CEO Datuk Yasmin
- Here's what happened in Malaysia's IT industry in the first three months of 2017
- MDEC adds another master cog to Malaysia's Digital Economy
- Feeding the 4th Industrial Revolution in Malaysia, MIMOS sees two major talent moves
- Securing the Internet of 'Nano-Things,' an exclusive with NanoMalaysia CEO Dr Rezal Khairi Ahmad
- Malaysian youth survey picks out the most impactful emerging tech trends
- UK, Malaysia dial up digital economy partnership
- IoT inspires Bosch to position Malaysia as global manufacturing and R&D centre
- What's really in store for Malaysia's IT industry in 2017?
- This is how Gartner sees artificial intelligence playing in Malaysia's digital disruption: interview