Competitive advantage: The key technologies that offer huge opportunities for future digital investments and business transformation are sensing and mobility, big data, IoT, AI, cloud computing and 5G. — AP
After experiencing political changes earlier this year and the onslaught of new coronavirus disease (Covid-19), it’s high time that Malaysia took another look at its national digital plan.
The digital sector has been playing an increasingly significant role as a new driver for Malaysia’s economic growth. It is driving transformation in our daily life, social-economic as well as business dealings and operations.
In 2018, the digital economy contributed 18.5% of the Malaysian economy. It grew by 7.9% per annum to RM267.6bil, from RM213bil in 2015.
The e-Commerce contribution to gross domestic product (GDP) stood at 8% in 2018 amounting to RM115.5bil, an increase of 9.0% per annum from RM89.1bil in 2015 (7.6% of GDP).
While battling the Covid-19 epidemic, Malaysia needs new policy-thinking on the future digital transformation.
This requires public-private partnership and collaboration, as well as innovation in information and communications technology (ICT) development and contribution to the digital transformation.
After doing an in-depth research and study, we at Socio-Economic Research Centre have identified some technology trends, business scenarios and major obstacles in the country’s future digital investments and transformation.
In terms of trends, the key technologies that offer huge opportunities for future digital investments and business transformation are sensing and mobility, big data, Internet-of-Things (IoT), artificial intelligence (AI), cloud computing and 5G.
These areas of technology have great promise in producing significant competitive advantage for companies and businesses.
Business-wise, we believe the three most technology-applying areas are in marketing, customers’ services delivery development, seamless and virtual communication/ telecommuting.
In terms of obstacles, the five major problems for digital transformation in are: unconducive ecosystem and restrictive regulatory environment, presence of cybersecurity threat and risk, shortage of funds, talents and technical skills, and searching for appropriate business models to realise the optimisation of digital transformation.
The government, people and businesses must work together in parallel for “policy push” to accelerate and deepen the evolution of ICT and digital technologies in the public delivery services, consumer, business and market dynamics.
Decisive leadership and infrastructure are important prerequisites for Malaysia to become the mover in harnessing the opportunities of sustainable digital transformation.
In a fast-paced digital environment, we must be quick to adapt to the demands of people and businesses, and deliver the goods and quality services in a fast, cost-efficient manner.
Digitally skilled and digitally secure people are needed to lead and drive innovation and translate that knowledge into an effective team in the digital age.
In our view, Malaysia’s National Digital Strategy Plan should have the following elements:
> Digital leadership – The government takes the lead role to provide the catalysts for digital transformation through a well-executed plan, with inclusiveness to reach out to many.
> Key focus areas – A strong senior ministerial council, to be led by Prime Minister with senior representatives from the government, private sector and chambers, should be set up. A well- defined structure of governance is required to produce visionary digital plans, along with policies and regulations for implementation.
> Digital infrastructure – The digital infrastructure (soft and hard), in particular high-speed broadband, must be further enhanced and reinforced for electronic communications and applications that are crucial for transmitting data.
In working out the digital infrastructure, let the ICT experts work closely with the experts in the various sectors to ensure the best outcome.
> Key focus areas – A well-developed broadband infrastructure entails improved access to “hard” infrastructure; and continued development of “soft” infrastructure.
Investment in digital infrastructure needs to include digital financial infrastructure on four digital fronts: payments, currency, identity and data.
> Digital skills – They have moved from “optional” to “critical” and need to be complemented with transversal “soft skills” such as the ability to communicate effectively in both online and offline mediums.
Major digital transformations such as AI, machine learning, big data analytics necessitate a change in skills requirements, impact capacity building and skills development for the digital economy.
> Key focus areas – The government needs to modernise the education system, with focus on science, technology, engineering and mathematics (STEM).
Digital literacy should be seen as a core skill alongside English and Maths. Inequalities and gender divide can be tackled through the provision of programmes and capacity development initiatives for disadvantaged groups, and re-skilling adults at risk for job displacement.
In terms of skills matching, digital curricula should be devised in partnership with industries to provide people with the skills they will need in their roles across the workforce.
The public sector needs to bridge the digital skills gap to become a trendsetter in a digital economy.
> Digital security – Digital issues on data privacy, data protection and cybersecurity are of utmost importance and absolutely essential if Malaysia is to become a smart nation.
People, companies and organisations must have the trust and confidence in the use of digital services, which could be used easily.
> Key focus areas – There must be policies and procedures to protect a digital identity. High security, protection of privacy in the digital society and safeguarding consumers in digital environments are of utmost importance to companies and individuals.
Priority should be given to critical sectors: energy, water, transport, health, government, information communication, media, security and emergency services, and banking and finance.
We should also place a strong focus on growing cyber security talent and manpower.
> Digital innovation – The government needs to create a conducive ecosystem and competitive conditions for the creation and spread of new or improved products and services.
It should strengthen the innovation climate for data-driven and digital innovation through grants and incentives for outcome-based R&D and innovation research in collaboration with academia and industries.
Robust intellectual property rights will spur more innovative activities. And increasing the returns of innovation will enable innovators to capture enough of the benefits of their own innovative activity to justify taking considerable risks.
Malaysia can be positioned as one of the leading innovation and creativity hubs in the region through creating a conducive ecosystem by removing regulatory barriers, and facilitating financial support, tax break and skills development.
Senior economist Lee Heng Guie, who formerly worked as chief economist for CIMB, is heading private think-tank Socio-Economic Research Centre. The views expressed here are his opinions.
