The information and communication technology (ICT) market in Malaysia is set to grow at a compound annual growth rate (CAGR) of 8.9% between 2019 and 2023.
This growth from 2018 US$16.5 billion to US$25.2 billion in 2023, will mainly be supported by the rising adoption of ‘client computing’ and ‘cloud computing’, according to a leading data and analytics company.
According to the company’s Market Opportunity Forecasts, ‘mobility’, ‘cloud computing’, ‘data analytics’, ‘storage’ and ‘business process outsourcing’ will be the five leading IT solution areas in terms of growth rate. Mobility is set to witness the highest CAGR of 21% during the forecast period.
The Senior Technology Analyst at the firm stated that the Malaysian Government’s initiative to create a hub for innovative producers and users of multimedia technology with Mandatory Standard for Access Pricing (MSAP) is paving the way for the availability of affordable high-speed Internet services and the emergence of a mature telecommunications infrastructure in the country.
As a result, Malaysia is set to witness a relatively high broadband penetration as compared to other peer Asian countries.
Manufacturing in Malaysia continues to be the most significant revenue contributing sector, with its revenue contribution to the overall ICT spending expected to marginally increase from 18.4% to 18.5% of the total ICT revenues in period (2018-2023).
The growth of ICT in Malaysia, especially in the manufacturing sector, has been further aided by government-enacted policies such as ‘Industry4WRD’, a national policy which aims to transform the manufacturing sector and related services within the period from 2018 to 2025. These policies are expected to lead to a mature digitalization of the Malaysian market.
It was noted that the Malaysian information communication technology (ICT) market boasts of strong fundamental government policy, high-tech focused national development and availability of skilled workers, which has further contributed to the growth of the industry in the country.
Additionally, the high levels of digital adoption and internet penetration will continue to drive the ICT market in Malaysia.
Economic Stimulus Package
OpenGov Asia previously reported that Malaysia’s former Prime Minister announced an RM20 billion Economic Stimulus Package so economic risks associated with Covid-19 outbreak can be addressed effectively and that the economy stays afloat amidst this crisis and national political unrest.
Several plans have been put in place to ensure Malaysia’s economy will continue to be on the right track to sustainable growth. One recurring focus in the Prime Minister’s speech was to leverage and invest in ICT to keep the nation competitive and productive.
The Government encourages employers to further invest in raising the productivity of the workforce during this economic slowdown. The Government will provide deductions on expenses incurred on approved tourism-related training. It will also provide up to RM100 million to fund an additional 40,000 employees from the tourism and other affected sectors.
The Government will allocate grants of RM1,000 to 10,000 local entrepreneurs to promote the sale of their products on e-commerce platforms as well as allocating RM20 million to Malaysian Digital Economy Corporation (MDEC) for Perkhidmatan eDagang Setempat (PeDAS) programme to transform Pusat Internet Desa into e-commerce hubs.
To enhance greater national competitiveness, the Government will promote higher value-added private sector investments. Bank Negara Malaysia will provide an SME Automation and Digitalisation Facility of RM300 million at an interest cost of 3.75%.
The Government will provide accelerated capital allowances over two years on expenses incurred on machinery and equipment including ICT.
