Digital economy could add more than 20% to Malaysia's GDP before 2020

Treasury Secretary-General Tan Sri Dr Mohd Irwan Serigar Abdullah

KUALA LUMPUR: The contribution of the digital economy to Malaysia's gross domestic product (GDP), at about 17% currently, is expected to exceed the projected target of 20% earlier than 2020, said Treasury Secretary-General Tan Sri Dr Mohd Irwan Serigar Abdullah.

He expressed confidence that the level could be achieved earlier as Malaysia had started making waves in the digital economy arena this year, first with the launch of the Digital Free Trade Zone or DFTZ on March 22 and now, the Malaysia Digital Hub.

"Malaysia can also leverage on the Regional Comprehensive Economic Partnership (RCEP), and the DFTZ is an area where our small and medium enterprises (SMEs) can benefit from partnerships with big players like Alibaba.

"Seeing the rate at which Digital Economy Corp Sdn Bhd (MDEC) is bringing in the investments, we can achieve it (target of 20% to GDP) earlier than 2020," he said after officiating the Malaysia Digital Hub and Malaysia Tech Entrepreneur Programme in Kuala Lumpur on Wednesday.

Mohd Irwan said the Malaysian ecosystem for startups is conducive and, due to the regulations, policies and facilities that have been put in place, the country is now the second top hotspot to launch startups in the world.

"We have started seeing many new startups being launched in Malaysia, while those that began elsewhere, such as in Singapore, are coming back now to build their base here," he added.

The Malaysia Digital Hub offers startups an opportunity for global expansion, ready access to high-speed broadband and fibre-optic connectivity, funding and facilitation opportunities, a workforce-ready ecosystem, technologically focused and a holistic convenience and lifestyle experience.

It focuses on four categories, namely, growing startups, global technology companies, accelerators and talent builders and investors.

Incentives for the Malaysia Digital Hub includes corporate tax exemptions for the tech startups, the Malaysia Tech Entrepreneurs Programme that issues passes for individuals who want to set up or expand their businesses into Malaysia, and access to funding.  

The special tax incentive would be leveraging on the existing tax regime. Any further incentives would be announced later.

The three digital hubs approved by the Government at present are APW, The Co and Common Ground, all located in the Klang Valley. - Bernama