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Malaysia’s Digital Economy Expected to Expand

Digitalisation of Global Trade and Commerce

Malaysia’s digital economy expanded RM267.7 billion in 2018, contributing 18.5% to the national economy, according to the Department of Statistics.

However, the digital economy growth in Malaysia pace moderated to 6.9% year-on-year as compared with the 9.8% recorded in the previous year.

Information and communications technology (ICT) contributed 18.5% to the country’s gross domestic product (GDP) comprising gross value added of ICT industry (GVAICT) (12.6%) and e-commerce for non-ICT industries (5.9%).

Malaysia’s Chief Statistician said in a statement that the telecommunications services were the main impetus in ICT services, while ICT manufacturing was supported by electronic components & boards, communication equipment and consumer electronics.

Based on annual economic statistics 2018, ICT Services recorded a gross output value of RM144.8 billion with an annual growth rate value of 7.8% per annum.

The figure was in line with the rapid growth in gross output, as the value of intermediate input also increased RM8.4 billion thus resulting in a value-added of RM74.3 billion.

The telecommunications services’ gross output saw the highest annual growth rate of 9.9%.

It was highlighted that income through e-commerce transactions recorded a value of RM447.8 billion in 2017 against RM398.2 billion in 2015 with an annual growth rate of 6%.

Expenditure on e-commerce transactions recorded a value of RM228.8 billion in 2017 as compared to RM195.1 billion in 2015 with an annual growth rate of 8.3%.

The main contributor to e-commerce income and expenditure was the manufacturing sector.

The usage of computer and internet by establishment in 2017 showed that 78.9% used the computer while 76.3% used the internet.

Selangor recorded the highest percentage usage of computer and internet with 94.9% and 92.1%, respectively.

The percentage of individuals using the computer was 70.5% and the percentage of individuals using the internet was 81.2%.

Meanwhile, Putrajaya recorded the highest percentage of computer & internet usage by individuals and computer & internet access by households with 97.8% and 99.6%, respectively in 2018.

Budget 2020 to Push the Digital Economy Growth in Malaysia

  • According to another article, the 2020 Budget demonstrates that the local technology industry is continuing to get much attention from the government, which is intent on further boosting the capabilities of local SMEs and start-ups, strengthening digital content, embracing digitisation, enhancing e-commerce, and adopting 5G technology.
  • Local technology players, industry associations and tech agencies, in general, applaud the various allocations set aside towards making Malaysia a stronger player and contender in the technology arena, both locally and abroad.
  • The budget emphasises shared responsibility to ensure that the fruits of development are distributed at each stage of the value chain and to the rakyat at large.
  • Malaysia is poised to be a digital-first economy with a robust digital and social infrastructure that works towards bridging the opportunity divide in our journey to become a high-income nation.
  • The core measure undertaken in the budget will help further fuel the digital economy, drive growth for SMEs and enterprises, enhance workforce skills development, as well as allowing education access for all.
  • Among the key thrust areas in the 2020 Budget is to fortify the digital economy with efforts to improve the physical and digital infrastructure that powers up the IR4.0 revolution.
  • With digital transformation set to contribute US$10 billion to Malaysia’s GDP by 2021, the government’s move to enhance our nation’s digital infrastructure is undoubtedly a step forward towards a stronger, more resilient economy.
  • These efforts will help cement Malaysia’s position as a tech powerhouse in the region, drawing in more investments from foreign companies, whilst also creating more job opportunities for Malaysians.
  • Companies welcome the government’s direction to encourage a cashless community. However, only eight percent of Malaysians use e-wallets. A progressive, cashless economy would help micro-entrepreneurs and SMEs grow without the cost, burden and safety concerns that come with managing cash.
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