Embracing the digital economy: (From left) Goh, Law and Naysan.

KUALA LUMPUR: More than ever, it is high time for Malaysia to have high-speed, widely accessible and stable internet connectivity throughout the country as the world’s economy is increasingly digitally driven.

The government’s priority appears to be on improving telco and internet networks in the country, along with driving the adoption of digitised services that will bring about productivity and efficiency gains.

About a year ago, the government pledged RM400mil under the economic stimulus package to improve the digital infrastructure and address the slower broadband issues.

Tomorrow, Prime Minister Tan Sri Muhyiddin Yassin is set to launch MyDigital & the Malaysia Digital Economy Blueprint. The digital economy blueprint would provide a clear roadmap for the country’s transformation into a regional digital pulse by 2030.

According to economists and industry experts, the launch of MyDigital is timely as telco companies have been working hard to reduce the strain that residential connections are experiencing due to the surge in Internet demand from the movement control order.

For the country to fully embrace the digital economy, it is all about coming back to basics of Internet connection, said UOB Malaysia senior economist Julia Goh.

She added that consistency in speed, access and stability of Internet connectivity are crucial factors for most sectors in the economy to become more efficient in a digitally connected ecosystem.

“Think of it as having the fastest car that cannot get up to speed if the road is narrow, bumpy and always jammed. So you need to widen that road, ” she quipped.

Digital economy encompasses economic activities that result from billions of everyday online connections among people, businesses, devices, data and processes.

Malaysia is already on track in rolling out next-gen infrastructure to fully deploy 5G and further enhance 4G coverage of 96.9% in populated areas by 2022.

However, Goh pointed out that Malaysia’s download speed still lags behind more developed Asian countries like South Korea, Singapore, Taiwan and Hong Kong.

As such, the government is focusing on improving the digital infrastructure through the MyDigital initiative.

Many industry experts are anxiously looking forward with excitement to the MyDigital launch.

“The MyDigital initiative is exciting news for many of us in the industry. Should the blueprint create a fair and highly transparent marketplace, it would attract more talent and investments into Malaysia which are very crucial success factors for the country to embrace the digital economy, ” said Securemetric Bhd chief executive officer (CEO) Edward Law.

He also hoped that the National Digital ID, an effort by the government for Malaysians to embrace the rise in digital services, would take place as well.

“The National Digital ID would allow Malaysians and foreigners living in the country to leverage on a trusted virtual ID to perform any official transactions online.

“This is the base of trust in any digital economy whereby everyone can be trusted while conducting digital business activities and most importantly protected by Malaysian law, ” Law pointed out.

Notably, it is important for payments to be cashless in order for the digital economy to function.

Undoubtedly, the government has announced various initiatives to encourage customers to adopt e-wallets. Bank Negara has also played a key role in providing the necessary frameworks to facilitate digital payments.

But industry experts believe that a large-scale initiative is needed to push cashless payments for a digital economy to function.

According to MoneyMatch co-founder Naysan Munusamy, a big political move is required for the country to fully implement cashless payments.

“The government needs to put tough actions into both aggressively pushing for cashless payments and supporting the local homegrown technology companies which will make our country grow, ” he suggested.

Having said that, Goh emphasised that the key to a fully digital path is the execution of policies and the development of local digital talent on this journey.

Should Malaysia get the execution right to bridge the digitals gaps in the country, Goh believes digital transformation is set to benefit the country to escape the “middle-income trap”.

Embracing the digital economy would raise talent, enhance skills and increase wages, resulting in the country moving out of the middle-income trap, she added.

“Key outcomes of the country fully embracing the digital economy are enhancing productivity and revenue while optimising resources and cost, ” Goh explained.

The digital economy would also create bountiful job opportunities with more scope on automation and specialised tech skills as new jobs from digital technologies require different skills.

“Most jobs would have a digital aspect to it and there will be a shortage of certain skills such as specialised tech skills like tech security, ” she said.

Goh forecast Malaysia to sustain its economic growth above 5% in the medium term on the back of higher adoption of technologies in the country.

The country’s digital economy has contributed about 19.1% to the national gross domestic product (GDP) in 2019.

According to the Department of Statistics Malaysia, the digital economy is expected to continue its significant contribution to the country this year, based on an estimated 20% contribution to the GDP in 2020.

Meanwhile, Deloitte Malaysia said small and medium enterprises (SMEs) have much to catch up on in terms of digitalisation, although the Covid-19 pandemic has forced SMEs to embark on digitalisation.

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