Bringing digital inclusion into focus


Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed: The government is aware of the importance of introducing specific policies to take advantage of the opportunities in the digital economy. This is in line with Malaysia’s goal in becoming a regional leader in the digital economy by 2030, ”

THERE is a stronger need to focus on digital inclusion in the country as more sectors and functions move to the online space.

Digital inclusion, the ability of individuals and societies to effectively use information and communication technologies (ICT), will enable more of the local population to contribute to and benefit from today’s digitalised economies and societies. This includes having access to the Internet and being able to harness digital tools.

In its recent report, Bridging the Digital Divide, consultancy firm Roland Berger notes that emerging economies cannot afford to ignore the digital sector if they aspire to increase their share of the global trade.

“Digital inclusion is critical to both personal income growth and macroeconomic development. Having the digital skillsets will improve an employee’s competitiveness and wages, while at the macro-level, the digital sector is outpacing growth in other sectors, ” it says.

Notably, the lack of digital access had put many micro, small and medium enterprises (MSMEs) at risk during the pandemic. Companies that were not able to go digital could not access new markets amidst the movement restrictions and lost out on many opportunities over the past year.

According to Roland Berger, digital skills and capabilities are now fundamental to successful participation in societal and economic activities. “If the digital divide is left unaddressed, large parts of the population will miss out on the opportunities that digital technology presents.”

It adds that the consequences of neglecting digital inclusion include reduced economic growth due to the immobilisation of a portion of the workforce.

Additionally, lower Internet penetration would also reduce the potential market base for businesses as certain market segments will be out of reach.

Roland Berger estimates that at least US$15bil per year can be unlocked in South-East Asia by bridging the digital divide.

Therefore, working to address digital inclusion would bring immense upside and opportunities for emerging economies.

In an effort to address this, the Malaysian government has launched the Malaysia Digital Economy Blueprint.

“It has never been clearer that technology is a convenient tool for advancement in the best of times, and an essential tool of survival during the most challenging of crises, ” says the Prime Minister during the virtual launch of the blueprint yesterday.

The blueprint, which will be implemented up to 2030, will pave the way forward for the country to be a regional leader in the digital economy and achieve inclusive, responsible and sustainable socio-economic development.

The blueprint covers initiatives to improve digital literacy, upgrade digital skillsets, create high income jobs, increase adoption of digital banking and accelerate digital transformation to enable local businesses to compete globally, among other things.

The Prime Minister says the plan also aims to encourage 875,000 MSMEs to adopt e-commerce, achieve 30% uplift in productivity across all sectors by 2030 and increase the number of startups in the country to 5,000.

This will open up more opportunities for small businesses and create a more vibrant market for them to thrive. The initiatives would also ensure that small businesses will be given the support to equip themselves with the relevant knowledge and tools to keep up with new digital trends.

It also targets to attract RM70bil investments in digitalisation.

The initiatives are expected to boost the digital economy contribution to gross domestic product to 22.6% by 2025.

Digital inclusion is a strong economic enabler. ICT tools and digital skills provide new opportunities to increase revenues, labour productivity and employment.

“Digitally included individuals and businesses have greater access to both local and global markets through online channels and digital transactions.

“For example, product and service offerings can be made available via online platforms, and data and software can improve the reach of marketing and customer relationship management (CRM) or make them better targeted, ” says Roland Berger.

Digital tools also add significant value in terms of efficiency and performance, and facilitate the ongoing transition towards a future where an estimated 50% of the workforce could be affected by digitalisation.

In South-East Asia, Roland Berger’s projections suggest that digital inclusion has the potential to unlock US$16 to US$307 per capita in new revenue streams from the technology, media and telecom sector and financial services. This translates to US$19mil to US$2.9bil depending on the country.

However, around 150 million adults – 31% of the population – in the region are digitally excluded due to disabilities, illiteracy, age, wealth gap and concentration of economic activity in urban areas.

Roland Berger has developed a Digital Inclusion Index and Digital Inclusion Framework to measure and analyse levels of digital inclusiveness in countries across the globe based on four levers: accessibility, affordability, ability and attitude.

Malaysia is considered a forerunner in South-East Asia, ranking at number 2 on the index – right behind Singapore – with a total score of 76 last year, up from 71 points in 2017. Globally, Malaysia ranks number 21.

It notes that Malaysia is strong in the areas of ability and attitude, or awareness, but lags behind in terms of accessibility and affordability.

Malaysia’s score in attitude (87) is the highest in the region, beating even Singapore (82). A recent survey by Randstad shows that 70% of Malaysians are proactively learning about new technologies such as artificial intelligence to ensure employability

Nonetheless, nationwide participation in the digital revolution is still hindered by barriers such as a lack of consistent and high-quality infrastructure. While the availability of network infrastructure is generally widespread, Malaysia still struggles with connectivity and latency issues.

Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed acknowledges that the country is still facing some challenges that need to be addressed immediately to reduce the digital gap.

“This includes issues such as low broadband quality and coverage, incomplete digital infrastructure and insufficient digitally-skilled workforce, ” he says at the launch of the Malaysia Digital Economy Blueprint.

“The government is aware of the importance of introducing specific policies to take advantage of the opportunities in the digital economy. This is in line with Malaysia’s goal in becoming a regional leader in the digital economy by 2030, ” he adds.

Malaysia is expected to start getting 5G Internet connectivity by the end of this year. The government is also looking to roll out end-to-end online services and increase the use of cloud services.

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