We are creating some awesome events for you. Kindly bear with us.

Digital economy now contributes one fifth to Malaysia’s GDP

A strategy consulting firm has estimated that Malaysia’s digital economy is worth over RM270 billion. This equates to roughly 18% of Malaysia’s GDP. This makes Malaysia more digitally mature than many other countries in the Asia Pacific region, and also a digital step ahead of several Western economies.

The current Covid-19 crisis and the resulting lockdown have accelerated this growth, abruptly boosting the need for digital shopping, working and connection. The share of GDP coming from the digital segment is expected to reach 20% by the end of 2020.

Malaysia’s progress builds largely on the government’s digital strategy first launched over 20 years ago. Since the inception of the Multimedia Super Corridor (MSC) in 1996, the Government of Malaysia has been persistently promoting the nation’s digital agenda as evidenced through multiple public initiatives such as the National Strategic ICT Roadmap & Digital Malaysia (2008-2012), National eCommerce Strategic Roadmap (2017), Industry4WRD (2018) and the latest National Fiberisation and Connectivity Plan (2019-2023).

According to the report, the large majority of Malaysian companies now use digital as a means to enhance decision making, improve productivity, streamline and automate processes, enhance customer experience or identify commercial opportunities, among others.

Most organisations use technology as an enabler for operational enhancements, including using IT systems (HR, procurement, finance), using digital payments and adopting cloud-based working.

The use of tooling to improve products and services to external stakeholders follows – this includes generally front-end tools for customer engagement such as enhancing company or brand awareness online with digital marketing, search engine optimised websites or an e-commerce platform.

Roughly one-fourth of Malaysian firms use digitisation to augment decision-making – the low uptake is due to the need for more advanced technology, as well as a solid IT infrastructure and people that have mastered topics such as data analytics and artificial intelligence.

Opportunities for growth

Despite the upward trajectory, Malaysia still has a ways to go on its digital journey. The firm estimated that six out of 10 companies still are at the basic digitalisation stage, which spans the digitisation of current work processes from what used to be manual to digitally-enabled.

At the other end of the spectrum, less than one in five companies can call themselves digitally advanced. Companies at this stage have a digital strategy in place which is fully integrated with its business pillars and functions, supported by a culture that embraces digitisation.

Enhancing digital capabilities

As the future continues to grow digital, companies will need to ramp up their digital maturity. However, this is a daunting task for many.

Across all corners of the globe, reports tell of failed IT transformations or systems that are not being put to use. Leveraging their experience in the field, the report’s authors posited several best practices for execution.

First, have a clear strategic digital direction to steer any form of digitalisation initiatives. Digital transformation should not be viewed as a one-off business agenda, but a continuous iteration of current workflows.

Second, start small using a pilot and learn approach. The experts recommend kick-starting digitalisation transformation one transformation at a time, materialising the intentions into actions.

Third, management should take a leading role. The management’s ability to drive and instil the importance of a digitally-powered company is a critical factor to any successful digital transformation. This spans the initial communication to ensure that the digital ambition is cascaded to every employee within the business, through to leading by example, personal commitment and involvement during the roll-out phase.

Finally, Malaysian companies should not overlook the role of human capital. Having the right digital competencies in place is the largest barrier to implementation, followed by organisational buy-in – two factors that revolve around people. This includes ensuring buy-in from employees to lower resistance to change, and upskilling or reskilling existing talent within the company through training.

Send this to a friend