January 28, 2023

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Malaysian expert says automation is the way forward

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According to a recent report, the Department of Statistics of Malaysia release a report titled, the “Key Statistics of Labour Force in Malaysia” in October which stated that Malaysia has a total workforce of 15 million, with another 7.1 million non-working people comprising housewives, students, retirees and those who are not interested in working. The remaining 3.3% unemployed working-class Malaysians comprise an estimated 740,000 people.

The Malaysian Employer Federation in 2017 reported that there are around 1.7 million foreign workers (excluding the unregistered ones) in Malaysia.

Analysing these clearly uneven numbers, it is unlikely that unemployed Malaysians would be able to substitute for foreign workers or replace their jobs any time soon.

Based on these facts, the report noted that an R&D Manager a major textile firm in Malaysia in the Universiti Teknologi Malaysia (UTM) stated that he disagreed with Human Resources Minister’s effort to encourage industries to boost the salary scale of the “dangerous, difficult and dirty” jobs so that they would be lucrative enough for unemployed locals.

The expert noted that the lack of better-paying skilled jobs has left Malaysia’s unemployed graduates with no choice but to either seek opportunities in countries with higher currency values or to settle for unskilled jobs with salaries equivalent to foreign workers.

Noting that the situation is dire, the expert presented some solutions.

He noted that retrospectively observing the past, it is clear that foreign workers were brought into the country in the 1970s to work on rural plantations and construction sites. However, the rapid industrialisation and economic growth of the country in the 1980s and 1990s drove a demand for labour with lower wages. This attracted both documented and undocumented foreign workers in large numbers.

Interestingly, despite the fact that these workers eased production pressures and demand for low- wage labour, the same scenario is now deterring companies to move up the value chain, which poses a disadvantage to the economy in the upcoming industrial revolution.

The ease and availability of low-wage foreign labour have created deep distortions that disincentivise industries to transform. Aligned with Vision 2025, the transition to a high-income economy requires a major shift from labour-intensive business models to those that are driven by knowledge-rich, highly skilled services, productivity gains, a technological edge and sophisticated technical know-how.

According to Economic Developments 2017, an annual report on the Malaysian economy by Bank Negara Malaysia, the foreign labour share of the workforce has trended downwards lately, from 18.8% in 2007 to 12% in 2017.

Although the change can be noted as an encouraging sign towards a better economic transformation, Malaysia’s migrant population ratio is higher than that of our regional peers and comprises an 8.8% share of total migrants to the population.

The expert noted that Malaysia’s economy’s dependency on low-skilled foreign labour is evident as only 5.2% of the total foreign workforce were tertiary educated.

Thus, the expert suggested that the government should look into technological transformation in industry, such as automation, for a comprehensive solution to both the issues of dependency on foreign labour and unemployability of local graduates.

Firstly, the mindset has to change. Most industries are still engaged in a “race to the bottom” in relation to labour costs and are unwilling to pay more for technology despite the commensurable productivity gains it offers.

A Council member of the Malaysian Employer Federation recently suggested that the government should set up an independent automation technology fund to assist industries to adopt such technology quickly. The foreign labour levy may be used to initiate it.

The substitute for labour for technology may, in turn, also create new skilled jobs for local graduates, with better wages, killing two birds with one stone, according to the expert.

Ultimately, the Malaysian economy has to progress from input-based, cost suppression as a source of competitive strength, to a dynamic economy based on a skilled workforce, technology-assisted and creating high-value products.

This can be achieved by enacting well-aligned, coordinated and conducive government policies. These policies should focus on talent development, research and development, and industrial upgrading initiatives.

India Invites Countries, Enterprises to Sign Up for India Stack

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The Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar, has said that with the involvement of an artificial intelligence (AI) layer, the country’s architecture will become more sophisticated in the future.

He was addressing the first India Stack Developers conference, which aimed to facilitate the adoption of India Stack for countries that are keen to integrate it as per their requirements and to create a robust ecosystem of startups, developers, and system integrators working around it on next-generation innovation. He said the government wants to offer India Stack or part of the stack to those enterprises and countries across the world who want to innovate and further integrate, execute, and implement digital transformation. India Stack is a set of open indigenously-developed APIs and e-governance and public applications.

“What we have now is just [the] India Stack 1.0 version. It will evolve and become more sophisticated and nuanced,” Chandrasekhar explained. A smart dataset programme will be launched soon, and an AI layer will be built into the stack. Seven countries will sign up with the Indian government to use India Stack.

The conference was conducted to bring together the developer community, start-ups, corporations, and foreign governments who are inspired by the India Stack and want to adopt digital public goods like Aadhaar, United Payments Interface (UPI), and Digilocker. Senior officials from Aadhaar, GeM (Government e-marketplace), Diksha, a public ed-tech initiative, and the Ayushman Bharat Digital Mission gave presentations on the strategies of each platform. Over one hundred digital leaders from industry associations, system integrators, and start-ups attended the event. It also saw participation from delegates of G20 countries.

Debjani Ghosh, President of the National Association of Software and Services Companies (NASSCOM), stated that India using digital means has achieved financial inclusion for 80% of the population in 6 years as compared to the projected figure of 46 years.

The CEO of Aadhaar, Saurabh Garg, spoke about the impact the biometric identification system has had in the country. It has recorded over 1.3 billion sign ups till now and handles around 75 million daily transactions. The transactions involve e-authentication by various organisations such as fintech, banks, and other Aadhaar-enabled payment services.

Aadhaar is a 12-digit unique identification card that serves as proof of identity and address for Indian citizens. As per the latest government data, in November, 287 million e-know your customer (e-KYC) transactions were carried out using Aadhaar, a 22% growth over the previous month. By the end of November, the cumulative number of e-KYC transactions had reached 13.5 billion. As OpenGov Asia reported, the Aadhaar e-KYC service is playing an increasingly crucial role in banking and non-banking financial services. It provides transparent and enhanced customer experiences.

An e-KYC transaction is executed, only after the explicit consent of the Aadhaar holder, and eliminates physical paperwork, and in-person verification requirements for KYC. Telecom operators and fintech firms, among others, have seen ease in the onboarding of new customers through eKYC. In November, 1.95 billion Aadhaar authentication transactions were carried out, 11% more than in October. Most of these monthly transactions were carried out by using fingerprint biometric authentication, followed by demographic and OTP authentication.

Local Governments to Boost China’s Digital Economy

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Multiple local governments in China announced measures to increase digital economy growth in 2023. Some cities, like Shanghai, and provinces, such as Zhejiang, Fujian, and Hebei, have set goals for economic progress for this year.

They emphasised the importance of the digital nation’s growth. They advocated for attempts to create blueprints for future sectors such as the metaverse, an immersive virtual environment enabled by virtual reality and augmented reality.

Zhang Yunming, The Vice-Minister of Industry and Information Technology, urged telecommunications companies to increase infrastructure construction and deployment. He pushed national telecom companies to deepen efforts in promoting an innovation-driven development strategy and accelerate the integration of digital and real economies.

As a result of the statement, connected business stocks surge. On Thursday, shares of nearly ten firms, including China National Software and Service Co, rose by the daily limit of 10%, demonstrating investors’ optimism about the rise of the digital economy in 2023.

Previously, consumer-oriented internet applications such as e-commerce drove China’s digital economy, but today business-oriented applications such as industrial internet play a far more prominent role. This demonstrates that the digital economic model has improved.

According to the China Academy of Information and Communications Technology, a government think tank, China’s digital economy is predicted to exceed 60 trillion yuan (US$8.84 trillion) by 2025.

China has laid the groundwork for the digital economy’s next era. According to data from the Ministry of Industry and Information Technology, more than 2.3 million 5G base stations will have been completed in China by the end of 2022, and the country will be able to link over 500 million residences to a gigabit optical network.

Furthermore, according to the ministry, digital connectivity for the mobile internet of things in China reached 1.84 billion in 2022, making China the first leading economy in the world to have more mobile IoT connections than mobile subscribers. The internet of things is a network of devices, cars, and other items equipped with software or sensors that facilitate interaction and share data. According to Zhao Zhiguo, the ministry’s spokeswoman, China’s mobile IoT connections account for 70% of the global total and cover the 45 major sectors of the national economy.

According to Wang Zhiqin, vice president of the China Academy of Information and Communications Technology, China has established a competent telecom infrastructure that will serve as a solid basis for China’s digital economy’s high-quality development. According to a forecast released by China’s Cyberspace Administration, the digital economy in China will be worth 45.5 trillion yuan in 2021, making it the world’s second-largest after the United States.

Liu, Vice Premier He said in a speech at the World Economic Forum’s annual conference in Davos, Switzerland, on Tuesday that China “must always make constructing a socialist market economy the direction of our transformation.

“We must allow the market to play a decisive role in resource allocation while also allowing the government to play a more active role. Some believe China will pursue a planned economy. That is not conceivable,” Liu remarked.

The remarks were consistent with the tone-setting Central Economic Work Conference, which concluded in December and underlined the importance of working “unwaveringly” to consolidate and strengthen the public sector and encourage, support, and guide private-sector development.

Tencent Holdings vice president Xu Yan believed that the government had increased its efforts recently to establish a world-class business environment for private enterprises. Tencent is stepping up its efforts to accelerate the merger of the physical and digital economies through innovation. The corporation has invested 150 billion yuan in R&D over the last three years.

Furthermore, the Chinese digital yuan has gained popularity. According to estimates from the country’s central bank, the quantity of digital yuan in circulation will reach 13.61 billion yuan (US$2.01 billion) by the end of 2022.

Digital yuan, like the physical renminbi, is a component of Chinese money as a legal tender in digital form. According to Xuan Changneng, vice governor of the bank, it is vital to integrate data and analysis while also undertaking general management of the two types of money.

Managing E-Commerce to Prevent Tax Loss in Vietnam

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This year, the government wants relevant ministries and agencies to tighten management and increase oversight of e-commerce activities to identify violations and prevent tax losses. The Ministry of Industry and Trade’s (MoIT) E-commerce and Digital Economy Agency will work with departments from the Ministry of Information and Communications (MIC) and the Ministry of Finance to share data and better regulate business activity on social media and in cyberspace.

The inspections will also focus on ensuring that e-commerce platforms and social networks are taking proper steps to screen, prevent and block accounts that do not provide adequate information or have signs of trading in counterfeit or illegal goods.

The E-commerce and Digital Economy Agency will continue to collaborate with other government agencies such as the Market Management Agency, the Department of Cybersecurity and High-Tech Crime Prevention, the Ministry of Science and Technology, and MIC to inspect and monitor e-commerce businesses for compliance with the law, in accordance with plans approved by the Minister of Industry and Trade.

The agency will also evaluate existing policies and make practical changes to improve the management of e-commerce business activities. It will upgrade infrastructure and supporting services and incorporate new technologies to assist the digital transformation of businesses.

Furthermore, the agency will offer training to improve the inspection and handling of violations in e-commerce. It will organise events to promote anti-counterfeiting and encourage e-commerce website operators to better protect consumers’ interests.

Last year, Vietnam’s e-commerce industry continued to grow and become a significant distribution channel. As the economy recovers from the pandemic, e-commerce has been a leading sector in the digital economy. A survey from the Ministry of Industry and Trade showed that retail e-commerce revenue in Vietnam increased by 20% in 2022 as compared to 2021, reaching US$ 16.4 billion. This accounted for 7.5% of the total retail sales of goods and services in the country.

To establish trust for consumers in online shopping, safeguard legitimate traders, and foster e-commerce development, the government reviewed and requested e-commerce companies to remove or lock 1,663 stalls with 6,437 counterfeits or violated goods, and blocked five infringing websites.

Experts recommend that there should be regulations on the responsibility of information security of relevant organisations and individuals in order to prevent tax loss and protect business interests. This includes regulations on the security of websites and the responsibility to provide information to tax authorities, which would help make tax management more effective.

Associate Professor Le Xuan Truong, Director of the Academy of Finance’s Faculty of Taxation and Customs under the Ministry of Finance, suggested that the government should implement a regulation that forces e-commerce trading floors to be responsible for withholding and paying taxes on behalf of individuals as well as perform payment intermediary services and participate in operating and controlling delivery activities and receiving money from buyers. Over 40 countries worldwide so far have regulated the responsibility of e-commerce exchanges in deducting taxes of individuals if the floor provides payment services, or directly participates in the delivery and receipt of goods by buyers and sellers.

HKSTP and Industry Partner to Boost Life Science Innovation

Image Credits: HKSTP, Press Release
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HKSTP has entered a strategic partnership with a Swiss multinational pharmaceutical company to position Hong Kong and the Greater Bay Area as a leader in life science innovation and set an example for the region. This is the first collaboration between HKSTP and the life sciences corporation that encompasses technology and data sharing.

The two are committed to promoting life science innovation and healthcare policy. They aim to provide a robust platform and support for start-ups in Hong Kong and mainland China by creating an ecosystem for healthcare start-ups. The goal is to make the Greater Bay Area a leader in life science and healthcare innovation and serve as a model for the rest of China in terms of technology application and registration. Additionally, they hope to establish the GBA as a hub for talent and corporates in the Asia Pacific region.

The principal areas of collaboration are:

  • Shaping Policy – A white paper to articulate policy recommendations, organising a public forum and a round-table for an in-depth discussion with government officials;
  • Co-incubation program – providing the start-ups with support and guidance on science, strategy and marketing, and creating a platform for the start-ups and potential partners to network and exchange; and,
  • Data collaboration – Fostering a conducive data-sharing environment in the STP Platform and among stakeholders; exploring synthetic data generation tools; promoting the “data collaboration” concept to the community.

The Secretary for Innovation, Technology and Industry was one of the witnesses to the Collaboration Agreement Signing Ceremony, he stated that the partnership aligns with the Hong Kong Innovation and Technology Development Blueprint recently released.

With the strong support from the Central Government and the government’s commitment to I&T development, as well as Hong Kong’s unique advantages, the partnership will greatly contribute to the development of a world-class biomedical ecosystem in Hong Kong.

The CEO of HKSTP stated that the partnering firm is a global pharmaceutical leader with strong connections to business leaders, scientists, marketers, and investors globally. It is believed that the partnership will foster the development of more health talents and significantly speed up growth in our medical research, drug development, and clinical trial processes.

The Head of the firm’s China-based innovation centre stated that the company is so glad to see this collaboration happen. It is hoped that the partnership can bridge HK and other cities in China for more opportunities to exchange, collaborate and empower start-ups; accelerate conversion and commercialisation; and to bringing hope to patients in China.

The APAC Sub Region 3 Head of the firm’s diagnostics arm noted that Hong Kong has a great foundation of scientific research. The firm looks forward to this collaboration in advancing high-quality research work, building a platform for innovation and benefiting the Asian population as well as the rest of the world.

The launch ceremony was attended by various dignitaries including the Under Secretary for Innovation, Technology and Industry; the Commissioner for Innovation and Technology, the Head of APAC Area at the firm, the Head of the firm’s accelerator (CICoR), the General Manager, Hong Kong and Macau and Mr Ronald Lo, General Manager, at the firm’s Hong Kong and Macau diagnostics arms.

Recent research has found that the global life science analytics market size was valued at US$ 8.3 billion in 2021, and is expected to grow at a compound annual growth rate (CAGR) of 7.7% from 2022 to 2030. This growth is driven by the increasing adoption of analytics by the life science industry, which uses descriptive and reporting analysis for building databases and prescriptive and predictive analysis for predicting future trends and results.

Malaysian Delegation to Italy Attracts Potential FDI

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The Malaysia Investment Development Authority (MIDA) plans to increase its efforts to attract foreign investors and make Malaysia a hub for investment, including Italian investors, who were recently informed of potential business opportunities and partnerships in industries such as chemicals, green technology, e-economy, smart technology, and Industry 4.0 value chains in Malaysia.

The Minister of International Trade and Industry (MITI) recently conducted a working visit to Italy from 20 to 23 January 2023 to enhance the business relationship between the two countries. As a result of this visit, several Italian companies have shown interest in investing in Malaysia as it is considered a strategic gateway to the ASEAN and Asia Pacific regions. The visit has also successfully attracted potential foreign direct investments (FDIs) worth RM3.25 billion, which are expected to be realised starting in 2023.

The Minister stated that in line with the government’s dedication to being pro-business, pro-investment and pro-trade, MITI and its agencies are ready to strengthen ties with investors that bring in high-tech and high-quality investments, which will aid in creating better-paying jobs for Malaysians.

From the foreign direct investment perspective, Malaysia is already acknowledged for its strategic location in Southeast Asia, diverse industrial ecosystem, and skilled talent pool. What is essential now is to address all the issues that investors face during their journey, to improve the overall ease of doing business in Malaysia.

The Chief Executive Officer of the Malaysian Investment Development Authority (MIDA) was also part of the Ministerial delegation. He noted that as a developing nation with a strong industrial and services sector, Malaysia is advancing to the next stage of development as its economy becomes more diversified to accommodate new areas of growth.

The Malaysia Investment Development Authority (MIDA) continues to welcome high-quality foreign direct investments from all over the world, including from Italy. These investments play a crucial role in the development of Malaysia due to their positive impact on the economy and will continue to do so in the post-pandemic era.

During the visit, the Minister had individual meetings with several prominent business leaders and potential investors. Italy is the 9th largest foreign investor in Malaysia from the European Union. As of September 2022, a total of 77 manufacturing projects with Italian participation have been completed, with total investments of US$382 million (RM1.4 billion), creating 4,346 job opportunities.

Italy is known for having established many world-class high-tech companies and can provide various latest technologies and digitalization expertise. Therefore, the presence of Italian companies in Malaysia is considered vital in facilitating the transfer of technology and creating more knowledgeable workers in Malaysia.

Italy’s emerging green technologies are also essential in supporting Malaysia’s long-term strategic objective of attracting investments with Environmental, Social and Governance (ESG) considerations, in line with the country’s New Investment Policy (NIP).

About MIDA

MIDA is the government’s principal investment promotion and development agency under the Ministry of International Trade and Industry (MITI) to oversee and drive investments into the manufacturing and services sectors in Malaysia. Headquartered in Kuala Lumpur Sentral, MIDA has 12 regional and 21 overseas offices. MIDA continues to be the strategic partner to businesses in seizing the opportunities arising from the technology revolution of this era.

HKU to Establish Virtual Asset Technology Consortium

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The University of Hong Kong’s Department of Computer Science and the FinTech Academy, in partnership with the 150th Anniversary Community Foundation of a Hong Kong-based bank, have joined forces with the Strategic Centre for Research in Privacy-Preserving Technologies & Systems at the Nanyang Technological University of Singapore to establish the Virtual Asset Technology Consortium (VATC).

VATC’s aim is to gather experts from various fields such as academia, industry, user groups, and government organisations to share information and provide guidance on technical matters related to virtual assets.

The management board will be headed by the Associate Head of the Department of Computer Science at HKU and the Associate Director of the HKU-SCF FinTech Academy and will include professors from NTU and professionals from supporting units as members.

Creating a platform that elevates the technological advancements in the field of virtual assets

The virtual assets (or digital assets) industry has seen significant growth in recent years. This innovative technology has led to new methods for conducting financial transactions using digital tools. The market has demonstrated a positive response to the belief that virtual assets, both those issued by private entities and the government, will be an integral part of the worldwide monetary and economic system.

The Virtual Asset Technology Consortium has set out the following missions:

  • Representation – Provide insights and advice on the technical aspects of virtual assets;
  • Research – Foster R&D collaboration on virtual assets.
  • Networking – Provide a platform for discussing the latest developments and trends of virtual assets and related FinTech technologies; and,
  • Education – Organise seminars and other educational activities to enable the industry and the general public to acquire knowledge on technologies related to virtual assets.

Several organisations such as Cyberport Hong Kong, Hong Kong Blockchain Society, as well as banks, have already expressed their support for VATC to The University of Hong Kong. The Virtual Asset Technology Consortium (VATC) will be officially launched in Q2 2023 and welcomes experts and enthusiasts who are committed to promoting the stability and growth of virtual assets to join the consortium.

The growing market for Digital Asset Management (DAM)

Recent research found that the Digital Asset Management (DAM) market is expected to grow from US$4.2 billion in 2022 to US$8.0 billion by 2027, with a Compound Annual Growth Rate (CAGR) of 13.6% during the forecast period. This forecast suggests that the demand for DAM solutions is expected to increase rapidly in the coming years.

Several factors are expected to drive the growth of Digital Asset Management (DAM). Some of the key drivers for this growth include:

  • The increasing need for digitalisation and the ability to quickly and easily collaborate with businesses on corporate assets;
  • The growing demand for the authenticity and security of digital assets;
  • The ability to easily upgrade, maintain and categorise digital assets, reducing production costs and improving resource allocation;
  • The need for organisational transparency across different industries and business functions;
  • The ability to increase conversion rates and retain customers; and,
  • The need for brand consistency.

Digital Asset Management (DAM) services include consulting, integration, and implementation, as well as training, support, and maintenance services. These services are necessary at various stages of the process, including pre-sales requirement assessment, and post-sales product deployment and execution.

This allows clients to get the maximum return on investment (RoI) from their DAM solutions. The service providers offer guidance to end-users and assist them in integrating and deploying software that is tailored to their specific requirements.

Nurturing Malaysia’s Tech Talent of the Future

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The Malaysia Productivity Corporation (MPC), the Malaysian Investment Development Authority (MIDA) and a US-based ROS Ready robotics platform launched the RoboFun (Robotics for University) programme in partnership with the Malaysian arm of an American multinational corporation and technology company.

The Deputy Secretary General (Investment) of the Ministry of International Trade and Industry (MITI) officiated the launching event, praised the RoboFun programme and stated that it is an ongoing collaboration between industry, government, and universities in Malaysia to strengthen the robotics ecosystem. These efforts are believed to contribute to the evolution of Malaysian industries towards Industry 4.0.

The collaboration between various stakeholders is essential for the development and adoption of new technologies, and it is expected that this programme will play a significant role in driving the growth and competitiveness of the Malaysian economy.

MIDA’s CEO stated that the tech firm’s talent development initiative via RoboFun’s comprehensive training module in collaboration with local universities is an effective method to accelerate industry and academia knowledge sharing in developing Autonomous Mobile Robots (AMR) systems.

The solution and Industry 4.0-related technology created by local university talent will encourage local SMEs to optimise productivity as well as enhance their capabilities. MIDA will continue to support the programme, ultimately improving local graduates’ marketability to meet the industry’s needs. MIDA will continue to work together synergistically with the industry and academia to support the development of the electrical and electronics (E&E) ecosystem in Malaysia.

The Director General of MPC believes that the RoboFun programme will continue to increase the productivity and competitiveness of the nation’s industry and that this trend will continue in the foreseeable future. Autonomous Mobile Robots (AMR) would be a workable solution to the problem of growing labour expenses if only the price of automating processes could be brought down. MPC, in its capacity as the programme’s operational partner, will oversee administering the whole training process, with Intel and Scuttle Robotics providing all necessary technical assistance.

The Vice President of Network and Edge Group, General Manager of Customer Application Support and Enabling, at the tech giant stated that one of the firm’s goals is to bridge the digital divide among faculties and create a new generation of workforce that possess a higher understanding of digital skills and Artificial Intelligence (AI) technologies, regardless of their field of study.

One of the best ways to achieve this is through the implementation of Autonomous Mobile Robots (AMR) systems, which integrate advanced technologies such as mobility, AI, control systems, OS and automation. RoboFun aims to help universities develop these capabilities, and ultimately become a key technology and solutions provider for small and medium-sized enterprises (SMEs) in the country.

It is believed that this will also serve as a catalyst for the ecosystem to create a pool of talented individuals, industry players, and technology adopters. The firm looks forward to sharing its experience in providing AMR solutions training to universities and to continue working closely with our partners under this programme, as we understand the importance of this initiative.

The launch event today featured participation from five public and private universities, including Universiti Malaya (UM), Universiti Sains Malaysia (USM), Universiti Tunku Abdul Rahman (UTAR), Universiti Putra Malaysia (UPM), and Universiti Teknologi Petronas (UTP).

Each university was presented with the tech firm’s Autonomous Mobile Robot (AMR) kits, which will be used to establish robotics laboratories and provide students from all faculties with the opportunity to acquire knowledge and adapt to AMR systems.

Chancellors and deans from universities have voiced their support for the programme, stating that it will not only benefit young people but also have the potential to enhance the capabilities of Autonomous Mobile Robots (AMR) among students and lecturers.

Through collaboration, a robust AMR solution has been developed. Given the increasing demand for AMR robots, the university representatives expressed confidence that the RoboFun programme is a solution to address the chronic shortage of skilled workers in Malaysia.

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