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Malaysia 5.0 to help push forward local SMEs

SME’s, more than any other business segment, are in for a big digital transformation — whether they like it or not — and therefore are an essential participant in Malaysia 5.0.

Malaysia 5.0 outlines a problem-solving approach to society’s challenges and problems through the deployment and implementation of the Fourth Industrial Revolution (4IR) technologies which integrates both physical and digital environments.

It stems from the term “Society 5.0” which describes the next stage of the evolution of societal communities, following the hunting society (Society 1.0), agricultural society (Society 2.0), industrial society (Society 3.0), and information society (Society 4.0).

The concept was first put forward by Yuko Harayama, who advised the Japanese cabinet on matters of innovation, to empower people with 4IR technologies, especially those left side-lined by society and the economy.

Society 5.0 underpins MDEC’s strategy aimed at delivering such solutions to Malaysians across all economic classes, and especially SMEs hit by the Covid-19 crisis, in facing the challenging economic environment ahead.

Digital transformation, from e-commerce solutions, training and education, and integration onto common platforms, will improve lifestyles and enable independence for those that implement them proactively.

At the same time, the big data revolution will empower SMEs to fully flex its considerable influence in the economy. Today they face multiple challenges such as lack of business connections, limited awareness of technology, lack of access to funding, education and training, and poor internet presence in a world going full-on digital.

According to the World Bank, the majority of the global economy consists of small businesses and start-ups. Of all these businesses, it turns out only a third of them have employees. Most are comprised of self-employed individuals operating in the informal or grey economy.

Malaysia 5.0, if properly implemented, can directly address their inclusion, access, performance and growth through 4IR tools such as Fintech, Blockchain, Analytics and AI. Digitalization offers new opportunities for SMEs to participate in the global economy, innovate and grow.

MDEC has a huge role to play in this ecosystem by offering a “sandbox” for SMEs to experiment with new technologies and stress test them before implementation so that the risk of failure is reduced.

The result is greater sustainability for those SMEs which innovate.

In this way, SMEs will play a critical role in strengthening productivity, delivering more inclusive growth, and adapting to the major transformations of our time.

Enabling SMEs to innovate can have a considerable economic and social impact, reduce the persistent gap with large corporations, and equalize income distribution — all desirable goals in the digital age, or indeed any age.

This sentiment was echoed in a speech made by the Minister in the Prime Minister’s Department (Economic Affairs) who noted that the Covid-19 pandemic has not only accelerated the country’s digitalisation agenda but also increased the skills of Malaysians using digital platforms in their day-to-day operations.

He said although the pandemic was a very serious health crisis, it also provided the wonderful unity to move forward to achieve the digital agenda, especially to make the people digitally friendly.

The Minister noted that the nation has changed the way they do things – like working from home and moving operations online.

This is a major push for the government in accelerating digitalisation, the Minister said in a keynote address at the NEC Roland Berger Live Forum with the topic Accelerating Digital ID to Enable Digital Economy in the New Norm, held on 15 June 2020.

Among the crucial issues discussed were how IT adoption could attract foreign investors to Malaysia, why digital ID matters in the new norm of the digital economy, how digital ID impact Malaysia, how to leverage the power of digital ID, and how to use technology to kick start business.

While the government has faced challenges highlighting that some government agencies did not appear digital-ready, some lessons have been learned in moving forward. The government is now determined to make sure that Malaysia fully capitalises this changing landscape.

The Minister stated, “we hope to be able to get every citizen of Malaysia to be digital-ready, we’re open for business. We would like to invite investors to invest in Malaysia, we want to collaborate with our partners from overseas, we want to do more to step up the digital agenda.”

“Of course, the success of the nation depends a lot on how fast we adopt these new norms,” he added.

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