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Tech shaping the Malaysian economy

A leading government official recently noted that while technology may be transforming Malaysia into a digital economy, there is still a need to overcome several key challenges to reach optimal performance in the digital economy.

Speaking at the Asian Innovators’ Summit, the Vice President for growth ecosystem development at Malaysia Digital Economy Corporation (MDEC), highlighted changes generated by emerging technologies such as artificial intelligence (AI) and the internet of things (IoT) across industry sectors.

The VP noted that people have played a major role in helping machines become smarter. The devices in use fuel of globalisation and this will only become stronger as one billion devices are expected to get connected by 2025.

Against this backdrop, the Malaysian government has embarked on a slew of initiatives to spur the digital economy, such as promoting technology adoption among businesses and encouraging digital entrepreneurship – efforts that are starting to pay off.

According to Malaysia’s Department of Statistics, the digital economy contributed 18.3% to the nation’s GDP in 2017 and is slated to reach a stretched target of 20% by 2020.

Malaysia in the league of high-income economies with high adoption of digital technology. The country also ranks higher than roughly a third of Organisation for Economic Co-operation and Development countries.

In addition to building high-quality infrastructure at affordable prices, technology is inspiring the focus on four additional building blocks – boosting tech talent development, increasing cybersecurity vigilance, developing platforms and enablers, and to put in place upgraded legislation and policies to speed up the growth of Malaysia’s digital economy.

However, there are challenges to face; Malaysia’s manufacturing and agricultural sectors, which form the nation’s traditional base, is in need of further digitalisation. Since the only option is to compete in a regional market that is cheap, in a bid to drive further innovation and efficiency, the government launched its national policy on Industry 4.0 known as IndustryFWRD in October 2018.

It was noted that the main objective of this policy lies in tapping the application of available new technologies. The fourth industrial revolution can address many issues concerning businesses, including the environment, health and safety of the workforce, waste management, efficiency in managing supply chains, resources and delivery systems.

Bridging the digital divide

While Malaysians are well connected, the VP noted that the business community still has targets to achieve.

To bridge the digital divide, MDEC, in a strategic partnership with Malaysian Investment Development Authority (MIDA), is helping companies in traditional sectors transform digitally with programmes such as Digital Transformation Acceleration Programme (DTAP).

Part of the programme is driven by a partnership with the Federation of Malaysian Manufacturers and international industry experts to operate Digital Transformation Labs, which the VP stated is an ideal way to galvanise entrepreneurship in key areas, such as Islamic finance which Malaysia has “world-leading potential”.

It was also noted that because the efficiencies and economic advantages of code-based machine intelligence will affect many aspects of human work, technology adoption must also reach the grassroots.

Instilling the younger generation with computational skills and hybrid skills [soft skills such as communication and problem solving], together with upskilling programmes, will help build a future-proof workforce.

In January 2017, computational thinking was integrated into the curricula for primary and secondary schools as a part of the #mydigitalmaker movement spearheaded by the Ministry of Education Malaysia and supported by MDEC.

The VP noted, however, that technology is not the sole answer. Governments require public-private partnerships, which have shown success and are ideal platforms to ramp up and scale up the projects that are proving fruitful. In addition, every Malaysian citizen must be included when a nation embarks on real digital transformation, the VP noted.

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