Harnessing the digital economy


KUALA LUMPUR: The Malaysia Digital Economy Corp (MDEC) aims to attract RM1bil worth of digital investments and generate 49,000 employment opportunities across nine promoted sectors by 2025 under its Malaysia Digital Catalytic Programmes (Pemangkin).

The sectors include digital tourism, digital agriculture, digital cities, digital content, digital finance, digital trade, digital services, digital health and Islamic digital economy.

According to MDEC chief executive officer Mahadhir Aziz, the nine promoted sectors are backed by their exponential growth on a global level based on a study, the Malaysia Digital Technology Trends and Outlook 2030, conducted by MDEC Research team.

Furthermore, the selection of these sectors was based on their potential for exports, he added.

“The development of these sectors does more than just open new avenues for economic growth and future innovations.

“They also improve, enrich and empower the rakyat in many ways, on top of raising the overall ecosystem value,” Mahadhir said during the unveiling of the new strategy that was also attended by Communications and Digital Minister Fahmi Fadzil yesterday.

He said the government, through MDEC, has allocated RM238mil worth of investments to the sectors under the Budget for Digital Economy from 2023 to 2025.

A sum of RM143mil of the total investments will be set aside as public investments across the nine targeted sectors.

“We are investing heavily on industry developments such as digital infrastructure, education and providing our workforce with the skills they need to succeed in the digital economy,” Mahadhir said.

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However, he said this is not enough, and the government has allocated RM45mil of the total investments to enhance technology enablers such as blockchain, automation and artificial intelligence.

The remaining RM50mil from the investments will be distributed as grants for companies to pursue digital investments.

Mahadhir said the grants will be launched as early as May, adding that the initiatives for each of the sectors will be announced in phases.

“In return, we believe there is at least RM1bil worth of investment opportunities that are expected to be generated within the focused sectors, led by the public-private sector and industry collaborations,” he noted.

He also stressed that public-private sector partnerships are the key to harness the full potential of the digital economy.

“MDEC also plays a key role in moving the needle of the economy significantly via policy facilitation and enabling programmes.

“MDEC’s Funding Facilitation team is actively engaged in negotiations with key private stakeholders and investors, aiming to secure an impressive total funding value of up to RM160mil,” Mahadhir added.

The new Pemangkin initiatives have allocated the highest amount of RM35mil to the trade sector, with agriculture receiving RM30mil, content RM25mil, health RM16mil and cities also RM16mil.

The tourism sector will receive RM10mil, services RM7mil and finance and Islamic finance both getting RM1.8mil each.

MDEC non-executive chairman Syed Ibrahim Syed Noh, who assumed his position at the start of this month, said the digital economy is targeted to contribute over 25.5% of the nation’s gross domestic product (GDP) by 2025.

Meanwhile, Fahmi said Malaysia’s digital economy is on course to hit its goal of contributing about 25.5% of the nation’s GDP by 2025, thanks to recent spikes in digital activities and major investments.

He pointed to the announcement by Prime Minister Datuk Seri Anwar Ibrahim on April 16 whereby US-based digital infrastructure firm DigitalBridge Group planned to invest over RM4bil here by year-end.

“Along with the constant positive news on the growth of our data centre industry, perhaps we will be able to surpass that target of 25.5% by 2025,” he said.

To facilitate growth in the nine sectors, Fahmi also announced additional Pemangkin programmes and three grants, which would be launched soon under the Malaysia Digital initiative.

Launched last year, Malaysia Digital is a national strategic initiative by the government to encourage and attract companies, talents and investment while enabling local businesses and the rakyat to play a leading part in the global digital economy.​

“It is not enough for Malaysia to be just a data centre hub. The key now is how we utilise these data centres to grow the rest of the digital industry,” he added.

Fahmi believes that Pemangkin will be the catalyst to growth, but the public’s “spark” is still needed.

“We are confident that more of these Pemangkin programmes will be a catalyst to equip the nation’s workforce with digital skills, spurring innovations.

“These identified sectors will be critical drivers of innovation, competition and growth and will help usher Malaysia’s golden digital decade,” he added.

In July 2022, MDEC launched two Pemangkin programmes, which are DE Rantau and Digital Trade.

Mahadhir said DE Rantau is expected to inject RM4.8bil into the local economy by 2025.

He pointed out that since commencing applications for DE Rantau nomad passes Oct 1 last year, MDEC has received over 2,000 applications from digital nomads.

Currently, MDEC has onboarded 446 digital nomads and has established 844 DE Rantau hubs across four states including Penang, Langkawi, Kuala Lumpur and Malacca.

“Through these DE Rantau hubs and a thriving ecosystem, there can be knowledge and experience sharing among local and foreign nomads, leading to the creation of a vibrant and knowledgeable local community and businesses,” he noted.

The Digital Trade initiative, on the other hand, through National Strategic eCommerce Roadmap aims to achieve RM1.65 trillion in eCommerce market size, facilitate over one million micro, small and medium enterprises to adopt eCommerce and 84,000 businesses to adopt eCommerce for export.

Digital Trade drives interoperability and greater harmonisation of standards and regulatory approaches as well as facilitating trade within and across borders.

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