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ICT to play bedrock role in 10th Malaysia Plan

AvantiKumar | June 14, 2010
MDeC, early industry reactions to Malaysia PM's US$70 billion proposals.

KUALA LUMPUR, 14 JUNE 2010 ICT is to play a key role in the 10th Malaysia Plan (10MP) announced by Malaysian PM, Datuk Seri Najib Tun Razak, which he says will help to drive the country's economy to first world status by 2010.

During the tabling of the 10MP in parliament, the prime minister said he aims to increase gross national income per capita to US$12,140 (RM38,850) by 2015, which demands an annual growth of six per cent gross domestic product (GDP).

Najib said that under the proposed plan, an investment of US$70 billion (RM230 billion) would support five strategic thrusts. These include measures to create a transformational governmental approach, a better environment to encourage economic growth, a more inclusive social-economic development approach, developing a first world talent base, and an infrastructure to promote a better quality of life.

Government ICT agency MDeC [Multimedia Development Corporation] chief executive officer, Dato' Badlisham Ghazali, said: The 10th Malaysia plan clearly articulates the central role of ICT as bedrock for the nation to vault forward towards a truly high-value economy. The quantum leap in the plan is how much more the ICT sector will see its role expanded from being merely a vertical to include the horizontal as well, as it cuts across all spheres of the national economy and Malaysian quality of life.

This is clearly demonstrated in the fact that ICT is selected as an NKEA [one of 12 identified National Key Economic Areas intended to build the foundation for 10MP], said Badlisham. It is important to note that Malaysia's ICT industry, encompassing the hardware, software, services and telecommunications clusters, accounted for about 9.8 per cent of the nation's total GDP in 2009.

We are delighted that the government recognises the enormous role that ICT plays in enabling economic growth. Pervasive adoption of ICT across all sectors of the economy can lead to greater productivity growth and GDP contribution, he said. Studies in Europe and the US show ICT contributing 50 per cent and 63 per cent respectively to the total factor productivity (TFP) growth of these regions. We at MDeC are looking forward to putting the rubber to the road.

This sector will continue to be a key focus for Malaysia and is expected to gain greater momentum driven by the convergence of industries due to digitalisation, he said. The contribution of the ICT industry to GDP is targeted to increase to 10.2 per cent by 2015. Greater use of ICT will not only support the growth of the sector but also boost productivity and raise the nation's overall competitiveness.

It is heartening to note that under the recently-tabled 10th Malaysia Plan, the government will support R&D and commercialisation across the value chain in recognition of the need to accelerate the transition from ideas and research to production and market of high-technology products, said applied research agency MIMOS chief executive officer, Dato' Abdul Wahab.

"MIMOS has 810 patent disclosures and counting, and 365 patents filed to date," said Wahab. "MIMOS had the highest number of IPs filed at the Intellectual Property Corporation of Malaysia (MyIPO) in 2009 amongst research institute. MIMOS was recognised at the National IP Award 2009 with the National Intellectual Property (NIP) Award 2009 Trademark category for Knowledge Grid Malaysia, and National Intellectual Property (NIP) Award 2009 Industrial Design category for WiWi Access Point."

 

 From consumer to producer of ICT solutions

Development of the ICT industry (ICT-I) will continue to be the key focus for the MSC [Multimedia Supercorridor] Malaysia initiative, said Badlisham. In order to attain high growth from ICT-I, the country needs to shift from being a relatively large consumer, but small producer of ICT solutions, to a large producer and consumer of ICT solutions.

Malaysia also needs to advance from an average producer of general ICT products and services to a dominant producer of selected ICT products and services hence progressing from a Nett importer to a Nett exporter, he said. To this end, the initiatives announced by the prime minister in development, funding and support will facilitate local ICT players in growing and moving forward.

Badlisham welcomed the government's changes in the laws around bankruptcy in SME [small and medium enterprise] space. MDeC welcomes the government's policy to make it easier for SMEs to participate in the government's procurement as we have highlighted the need for the government to support our local companies so that they can have success stories as reference in order to participate in international bidding. MSC Malaysia-status companies will also be able to take advantage of the Working Capital Guarantee and the Industry Restructuring Loan Guarantee Scheme.

MSTB [Malaysia Software Testing Board] president, Mastura Abu Samah, said: A sustainable ecosystem will help propel our software testing industry to become a new thrust of our economy, contributing significantly to the national GDP, against a backdrop of large and growing global markets.

"MSTB aims to have 10,000 certified testers in five years," said Mastura. "To be able to achieve this, it has to look at a bigger pool of candidates the universities. It is crucial that these graduates have a high level of competence to meet the demands from the industry."

"We are engaging potential final-year students to promote software testers as a career option," she said. "The potential economic returns in this market are significant. Global research firm Ovum Consulting forecast that the worldwide market for computer software and systems testing services is projected to be worth US$56 billion (about RM186 billion) by 2013."

 

Leading role in cloud computing and connectivity

Another area in which MDeC will take a leading role is in cloud computing, said MDeC's Badlisham. This will enable SMEs to move from a Capex [capital expenditure] to Opex [operating expenditure] scenario giving them speed, agility and huge cost savings. In this sense, ICT becomes a utility similar to electricity or water.

Also of particular interest is the Creative Multimedia space where MDeC is spearheading a move to make Malaysia a hub for animation, filmmaking and games, he said. The 10MP Plan clearly shows that the government will be formulating a policy to help drive these efforts further.

Networking solutions provider Juniper Networks Malaysia country manager, Wan Kamal noted that 10MP intended to ensure 75 per cent household broadband penetration by 2015, as well as to promote and incentivise the development and use of green products and services, and connect Malaysian researchers to the global research community.

The internet has become an important enabler of the country's socio-economic development," said Kamal. "With growth expected in online cloud computing, data centres and fixed and mobile applications, moving the country up the broadband value-chain will improve management efficiency, competitiveness and better collaborations with other eco-system partners worldwide."

Connecting Malaysia to the global community's research and innovation networks will allow faster exchange and analysis of large volumes of information, driving innovation in areas as diverse as medicine, biotechnology, energy, and environmental sciences; while network innovation is lowering operating expenditures and allowing third party software developers to offer new business opportunities to the service providers by way of monetizing their network infrastructure," he said.

 

Public-private partnerships

ICT company leaders have generally welcomed the 10MP proposals. Networking solutions provider Cisco Malaysia managing director, Anne Abraham, said: The key measures in 10MP will open doors for innovative collaborations between the government, businesses and citizens. Technology is foundationally important in integrating some of the efforts and realising the economic goals as outlined by the government.

Storage solutions provider Hitachi Data Systems Malaysia managing director, Johnson Khoo, said: The 10MP should also focus on the real threats to the nation our competitors such as India, China, South Korea and other countries in the region.

However, we applaud the 10MP's continued emphasis on enhancing human capital in the public and private sectors, said Khoo. The increase in allocation to 40 per cent (from 21.8 per cent under the 9th Malaysia Plan) is a positive step in increasing productivity and creating an innovation-based economy.

We urgently need to improve the supply of a skilled, professional, value-focussed workforce, and provide truly market-relevant skills for the existing workforce, he said. If you look around the region, Indonesia and the Philippines are intensifying their efforts in this area, and it is vital that we ramp up our efforts to build quality human capital.

In addition, the drive to sustainable business models formed part of the 10MP. NetApp Malaysia country manager, Mano Govindaraju, said: NetApp believes the businesses share the global responsibility to protect and preserve our environment today and for future generations by not only being more energy efficient, but also by practising good environmental stewardship.

Irrespective of whether the economy is driven by the government or the private sector, it is the quality of the human capital that will determine if we can meet our aspirations of achieving a high value, and high income, economy by 2020, added Hitachi Data Systems' Khoo.