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What's really in store for Malaysia's IT industry in 2017?

AvantiKumar | Jan. 9, 2017
(MAJOR UPDATES) New leadership insights from PIKOM, MDEC, CyberSecurity Malaysia, Cyberview, IDC, Gartner, BAE Systems, 11street, Canvas/Instructure, Cloudera, Hitachi Data Systems (HDS), Hitachi Sunway, Red Hat, Cisco, AIMS Group, Fortinet, Sophos, Emerio, Brocade, Cognizant, Outsystems, Symantec, VADS, and Veeam.

Malaysia in 2017 (IDG)

Image (Computerworld) - ICT predictions

(The first edition of this article was published on Computerworld Malaysia on 3 January 2017.)

Updated (9 January 2017) with new contributions from Emerio, Cognizant, Outsystems, CyberSecurity Malaysia, Symantec, VADS, and Veeam.


 Computerworld Malaysia invited ICT leaders, government agencies and analysts to speak about how the industry fared in 2016, to also offer opinions on the challenges to come in the next 12 months as well as give some reality checks on the country's goal to achieve 'developed nation status' by 2020.

As the 2016 edition of the Look Ahead feature noted, the local ICT industry's desire has been to shift beyond IT's traditional role. This new roundup looks at the industry's efforts to strengthen its role as catalyst and disruptor of the local leadership economy.

As well as the positive domestic outlook from eCommerce and IT services, you will read whether the challenging ecosystem, including the need to develop sufficient talent to keep pace with IT's rapid growth, has impacted growth expectations.

Leadership insights Malaysia's Digital Economy in this feature are drawn as brief extracts from  commentaries and  interviews (links are included) from PIKOM, MDEC, CyberSecurity Malaysia, Cyberview, IDC, Gartner, BAE Systems, 11street, Canvas/Instructure, Cloudera, Hitachi Data Systems (HDS), Hitachi Sunway, Red Hat, Cisco, AIMS Group, Fortinet, Sophos, Emerio and Brocade. 

 Though Malaysia's national ICT industry association PIKOM's 2016 expectations were somewhat more robust this time last year, its predictions for 2017 remain bullish despite (pic below) PIKOM Chairman Chin Chee Seong's reservations about the frail ecosystem, which  include uncertainties about Trump, TPPA and the falling Ringgit.

Chin Chee Seong (CS Chin)_PIKOM Chairman

 "PIKOM has downgraded GDP growth rate to reach only 4.2 percent and 4.0 in 2016 and 2017 respectively. However, Malaysia's overall ICT market will feel the positive impact of disruptive technologies and digital economic growth remains on track to achieve 20 percent to GDP (gross domestic product) by 2020, he said during a media briefing in Kuala Lumpur to launch the PIKOM ICT Strategic Review 2016-2017: Age of Disruptive Technology, an industry report.

The ICT Services sector (ICTS) outlook looks especially bullish, reaching RM77.5 (US$17.37) billion by the end of 2016, said Chin.
He said the depreciation of the Ringgit against the US dollar, the unexpected outcome of the UK's Brexit vote and the US presidential election results as well as the uncertain future of the Trans-Pacific Partnership Agreement (TPPA) were the significant factors attributed to the lower forecast.
Chin said the association has adopted a conservative approach with regards to these revised GDP growth forecast, to take into account the potential long term impact of these factors on the economy.

"We are living in economic uncertain times and we cannot ignore the impact of the internal and external factors could have on the future of our economy and our country in particular the potential changes in US economic policies and the threat of a slower Chinese economy," he said, adding that the effects could be far more reaching in 2017.
The China effect
"The lower forecast is based on concerns over uncertainty and upward risks in the external environment," added Chin, citing the Department of Statistics Malaysia's statistics, which has GDP growth for Q1 2016 as 4.2 percent - a 0.3 percent reduction from Q4 2015. This year's ICT Strategic Review report showed the declining GDP growth rate has continued in Q2 of this year, which marked the slowest expansion since 2009.
However the GDP growth in Q3, demonstrated a better-than-expected performance with Exports growing in August, after 22 consecutive months of contraction, said Chin.
"PIKOM expects the strong performance of Q3 to be carried through to Q4 ending the year with an overall estimated GDP growth of 4.2 percent," he said.
Chin also noted that "it would be interesting to see how bilateral and economic relations with China will strengthen especially after the Prime Minister's recent third official visit to the country since 2009, as this can potentially have a galvanising effect on the Malaysian economy in the long term."
"We certainly look forward to any positive developments as China presents a strong source of Foreign Direct Investment (FDI) and is also a potential huge market for Malaysian products and services," he said.
Domestically, Malaysia remains largely stable with low inflation and unemployment rates, a Y-o-Y declining budget deficit, ample liquidity in financing and a well- supported prudent financial management systems and fiscal policies, said Chin.
He said he was confident that the emergence of disruptive technologies - the focus of this year's ICT Strategic Review report, will serve as catalytic game-changers to continue boosting the ICT sector and the economy.


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