February 23, 2024

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Malaysia 5.0: Reinventing Malaysia’s digital economy

Malaysia’s digital economy has been on a steady rise, growing at around 21% annually. In the wake of the COVID-19 pandemic, the Malaysian government recognised this growth as a crucial driver to stimulate economic recovery. The government has been continuously promoting the nation’s digital agenda through multiple policies and initiatives.

A key investment destination

Consistent growth and uptake of digital tools in the past few years are indicative of Malaysia’s robust Digital Economy and have attracted foreign investors. The Fintech adoption rate is also increasing in Malaysia and the region with consumers, wanting more financial inclusion, better fees, and easier ways to transfer funds. With high-speed broadband facilities and better digital literacy are also driving adoption.

4IR and Malaysia’s 5.0 Digital Economy

At the cusp of the Fourth Industrial Revolution (4IR), Malaysia has the opportunity to re-engineer the human experience using technologies that could decentralised authority and de-emphasise divisions along the lines of colour, creed and country – what the Japanese have coined as “Society 5.0”. This concept is now being adopted locally as “Malaysia 5.0”.

Now, MDEC is poised to take on a leading role in catalysing the transition to Malaysia 5.0 as a new narrative for the nation. This includes introducing using emerging technologies that are now considered essential tools in the new Malaysia 5.0 digital economy.

Malaysia 5.0 directly addresses financial inclusion, access, performance and growth through the 4IR tools, such as fintech, blockchain and artificial intelligence (AI). These digital initiatives and hubs will emerge as core components for the next-gen infrastructure of every country. They will be the ones facilitating the interoperability of goods and services that are flowing through them with interconnectivity between various market sectors.

4IR tech to propel Malaysia forward

The COVID-19 pandemic has resulted in a global standstill and impacted several industries – some more than others. Industries such as Food & Beverage (F&B), Aviation, Travel, Tourism and Retail experience unprecedented disruptions in supply chains and consequently led to a surge in unemployment rates.

According to the Chairman, the COVID-19 pandemic allows for the exploration of new technologies that could lead to more sustainable, inclusive and resilient economies and societies. New technological paradigms are introduced, reflecting the greater need for collaboration across all stakeholders. Interconnectivity in this extraordinary situation is crucial for the nation to achieve shared prosperity.

The country’s digital infrastructure and readiness to embrace technology allowed people to weather the storm. Ever since the Movement Control Order (MCO) was enforced, online services and e-wallet applications saw a considerable boost in users. People are ordering food, groceries and other necessities online to avoid contact and reduce the risk of COVID-19 infection.

In addition, Malaysia’s research arms are actively deploying IR 4.0 solutions to curb the spread of the virus. Business owners and employees embraced the new normal by espousing WFH practices and utilising cloud-based video conferencing solutions to participate in online meetings.

4IR represents new ways in which technology can be embedded within societies. The integration of robotics, machine learning, AI, Internet of Things (IoT), blockchain, financial technology (fintech), data analytics and drone technology with the synergy of 5G infrastructure will displace conventional technology and significantly alter the way consumers, industries and businesses operate.

Sustainable Digital Economy & Value Creation

By embracing 4IR and “Malaysia 5.0” for the nation’s economic recovery, Malaysia has achieved a balanced and equitable growth distribution across all layers of society. The emphasis on well-being and environmental conservation has always been at the forefront of development initiatives.

In the agricultural sector, modernisation and digital transformation would guarantee food security, increased productivity, strengthen supply chains and enable digitally skilled workers. For instance, in oil palm plantations and paddy fields, drone technology and other agrotechnology has helped plants and farmers monitor and enhance crop production to generate a more sustainable and viable source of income.

The adoption of emerging technologies in traditional industries such as agriculture is aligned with Malaysia’s Sustainable Development Goals (SDG) to improve the well-being and income of farmers, fishermen, agro-based entrepreneurs and livestock breeders.

Earlier this year, the World Economic Forum (WEF) and MDEC announced a joint effort to co-design pilot policy principles and regulatory frameworks to accelerate the utilisation of drone tech for societal benefits. Aside from increasing crop yields, drones can be efficiently used to identify dangerous conditions without putting workers at risk, act as a lifeline for remote populations and reduce carbon emissions.

Thus, 4IR technologies could establish a much better living environment; create new, more purposeful employment opportunities; upskill the labour force; better health and education, and create smarter, greener cities.

Spearheading digital transformation

MDEC positions itself at the vanguard of digital transformation by focusing on stimulating inclusive, high-quality growth. Its current role is to ensure Malaysia makes the Digital Leap and embrace the era of 4IR to drive shared prosperity and to reinforce the country’s role as the Heart of Digital ASEAN, a regional digital powerhouse and industry trailblazer. These are focused on three primary focused drivers: empowering Malaysians with digital skills, enabling digitally-powered businesses, and driving digital investments.

Focusing on the long-term

Malaysia’s digital economy is forecasted to contribute 20% to the economy by 2020, a surge of 2.2% since 2015. Backed by the launch of the Digital Free Trade Zone (DFTZ) in 2017 and the current global crisis, the e-commerce sector is expected to exceed RM110 billion by 2020, comprising nearly 40% of Malaysia’s digital economy.

MDEC had the foresight to encourage the development and testing of next-generation technologies such as blockchain and fintech. This proved fundamental in attracting many start-ups and foreign investors to be based in Malaysia. Addressing the growing demand for digitally skilled Malaysians, MDEC introduced the Tech Talent Development initiative to upskill and reskill the workforce. This has further sustained the nation’s investment appeal.

The Malaysian government also incentivised its industrial sectors by offering tax breaks for the electronics sector and related intellectual property (IP); automation equipment capital allowance for services; and provision of incentives for digitalisation and innovation efforts to accelerate digital transformation.

PARTNER

Qlik’s vision is a data-literate world, where everyone can use data and analytics to improve decision-making and solve their most challenging problems. A private company, Qlik offers real-time data integration and analytics solutions, powered by Qlik Cloud, to close the gaps between data, insights and action. By transforming data into Active Intelligence, businesses can drive better decisions, improve revenue and profitability, and optimize customer relationships. Qlik serves more than 38,000 active customers in over 100 countries.

PARTNER

CTC Global Singapore, a premier end-to-end IT solutions provider, is a fully owned subsidiary of ITOCHU Techno-Solutions Corporation (CTC) and ITOCHU Corporation.

Since 1972, CTC has established itself as one of the country’s top IT solutions providers. With 50 years of experience, headed by an experienced management team and staffed by over 200 qualified IT professionals, we support organizations with integrated IT solutions expertise in Autonomous IT, Cyber Security, Digital Transformation, Enterprise Cloud Infrastructure, Workplace Modernization and Professional Services.

Well-known for our strengths in system integration and consultation, CTC Global proves to be the preferred IT outsourcing destination for organizations all over Singapore today.

PARTNER

Planview has one mission: to build the future of connected work. Our solutions enable organizations to connect the business from ideas to impact, empowering companies to accelerate the achievement of what matters most. Planview’s full spectrum of Portfolio Management and Work Management solutions creates an organizational focus on the strategic outcomes that matter and empowers teams to deliver their best work, no matter how they work. The comprehensive Planview platform and enterprise success model enables customers to deliver innovative, competitive products, services, and customer experiences. Headquartered in Austin, Texas, with locations around the world, Planview has more than 1,300 employees supporting 4,500 customers and 2.6 million users worldwide. For more information, visit www.planview.com.

SUPPORTING ORGANISATION

SIRIM is a premier industrial research and technology organisation in Malaysia, wholly-owned by the Minister​ of Finance Incorporated. With over forty years of experience and expertise, SIRIM is mandated as the machinery for research and technology development, and the national champion of quality. SIRIM has always played a major role in the development of the country’s private sector. By tapping into our expertise and knowledge base, we focus on developing new technologies and improvements in the manufacturing, technology and services sectors. We nurture Small Medium Enterprises (SME) growth with solutions for technology penetration and upgrading, making it an ideal technology partner for SMEs.

PARTNER

HashiCorp provides infrastructure automation software for multi-cloud environments, enabling enterprises to unlock a common cloud operating model to provision, secure, connect, and run any application on any infrastructure. HashiCorp tools allow organizations to deliver applications faster by helping enterprises transition from manual processes and ITIL practices to self-service automation and DevOps practices. 

PARTNER

IBM is a leading global hybrid cloud and AI, and business services provider. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Nearly 3,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM’s breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and business services deliver open and flexible options to our clients. All of this is backed by IBM’s legendary commitment to trust, transparency, responsibility, inclusivity and service.

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