FATIN SYAFIKA

MONDAY 21/6/21

ARTICLE

How technology is shaping Malaysia’s economy

By Avanti Kumar

Technology may be transforming Malaysia into a digital economy, but the country needs to overcome
several key challenges to rise above the pack, a top government official noted at a conference on 16 April.
Speaking at the Asian Innovators’ Summit organised by SAP in Kuala Lumpur, Norhizam Kadir, vice-
president for growth ecosystem development at Malaysia Digital Economy Corporation (MDEC),
outlined changes generated by emerging technologies such as artificial intelligence (AI) and the internet
of things (IoT) across industry sectors.
“People have played a major role in helping machines become smarter,” Norhizam said. “The devices you
are using have fuelled the tremendous rate of globalisation and this will only become stronger as one
billion devices are expected to get connected by 2025. What is also interesting is the speed of adoption by
humans.”
“The telephone took 75 years to reach 50 million users,” he said. “Radio took 38 years to reach the same
number; television just 13 years – and now the speed really multiplies: Four years for the World Wide
Web; Facebook 3.5 years; Google 88 days. And Angry Birds reached 50 million in a mere 35 days.”
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.
These efforts 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.
“We have made some encouraging headway,” Norhizam said, adding that Malaysia is currently leading
the pack of ‘break out’ nations and heading towards achieving a ‘stand up’ digital economy.
This is according to The World Bank, which put 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 (OECD) countries.
“Malaysians are already one of the most digitally connected societies in the world, with roughly 80% of
the people having access to the internet, mainly through mobile networks, which is just another sign that
Malaysia is well positioned for digital products and services,” Norhizam added.
Middle child syndrome
In spite of its successes, Malaysia has what Norhizam quipped as the middle child syndrome in the
region.
“We keep on developing, but comparison with our neighbours is inevitable. We lack the sheer population
size of Indonesia, for instance, and need to address talent development, digitalisation of traditional
industry sectors, and other challenges,” he said.
However, Norhizam noted that Malaysia, which has about 25 million internet users, has been able to
attract investors and foreign companies, thanks to its cost efficiency, culturally diverse workforce, and
central location in the region.
“The Malaysia Baru [New Malaysia] drive by the government from last year includes holding to the
position that access to the internet is the right of every citizen,” he added.
In addition to building high-quality infrastructure at affordable prices, he said technology is inspiring the
focus on four additional building blocks – boosting tech talent development, increasing cyber security
vigilance, developing platforms and enablers, and to put in place upgraded legislation and policies to
speed up the growth of Malaysia’s digital economy.
“It’s a bit of a challenge,” Norhizam said. “For instance, our manufacturing and agricultural sectors,
which form our traditional base, are ripe for digitalisation. We have no choice but to compete in a
regional market that is cheap. Hence, in a bid to drive further innovation and efficiency, the government
launched its national policy on Industry 4.0 known as IndustryFWRD in October last year.
“The main objective of this policy is 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 workforce, waste management, efficiency in managing supply chains, resources and
delivery systems,” he added.
Bridging the digital divide
While Malaysians are well connected, Norhizam admitted the business community has some way to go.
To bridge the digital divide, MDEC, through 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 Norhizam said is an ideal
way to galvanise entrepreneurship in key areas, such as Islamic finance which Malaysia has “world-
leading potential”.
“In Malaysia, we have had early unicorns such as MOL Berhad, and we have a crop of what we call
micro MNCS such as iflix and Grab,” Norhizam added. “There will be new initiatives aimed at furthering
innovation and connecting to market opportunities and capital.”
Norhizam 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.