Onwards and upwards: MSC Malaysia reports progress made in 2013

  • TECH
  • Thursday, 19 Jun 2014

Quality is the name of the game as highlighted by the Multimedia Development Corporation (MDeC) in its announcement on MSC Malaysia’s 2013 performance. 

Datuk Badlisham Ghazali, chief executive officer at MDeC said that the agency seeks to continually step up not only the quality of local talents but also of the investments that it helps to bring in to boost Malaysia’s information and communications technology (ICT) sector. 

“You can have topline growth, but if you’ve got low end work, it’s not going to benefit the Malaysians in general and your contribution to GDP would be much lower,” he said. 

In 2013, 9,221 new jobs were created locally, which was a 7% increase from 2012. Average monthly salaries were reported to be RM5,746, with the most number of job opportunities coming from the shared services and outsourcing cluster (6,894 jobs). On the whole, the total number of MSC Malaysia related jobs numbered 138,071 in 2013. 

“We will monitor this to ensure that we’re not just taking on low-end investments that doesn’t help the country in the long-term,” Badlisham added. 

Over on the investment side, he revealed that there had been a 3% increase in new investments last year. Around 78% came from direct domestic investment whereas the remaining 22% of foreign direct investment came mostly from Singapore, the United States and Finland. 

Most of the investments were directed towards the Infotech cluster, which recorded a total of RM1.4bil in 2013, chalking up 45% of the total new investments for the year. 

“It’s not just about numbers, but also the quality of investment that we’re attracting,” Badlisham said, adding that MDeC has seen encouraging developments in areas such as knowledge process outsourcing (KPO). 

“Some of the investments are also coming in through government linked companies (GLCs) who see it as imperative to participate actively as it is a key contributor to their competitiveness.”

Looking at the bigger picture, Badlisham pointed out that there was a direct relationship between investments and talent development, and stressed that both ends needed to continue to be nurtured. 

“It’s mutually beneficial. You wouldn’t get the investments if the companies don’t think they can get the employees. And, of course, on the employees’ side, we want to bring in the investments so they are motivated to upskill themselves and take on these opportunities,” he said. 

Meanwhile, revenue generated in 2013 under MSC Malaysia came up to RM34.55bil, which was a 3% increase from 2012. Contribution to the nation’s GDP stood at RM12.06bil, rising 6.5% from the previous year. 

As for export sales, MSC Malaysia companies contributed a total of RM12.41bil, which corresponds to a 7.4% year-on-year increase. 

Encouraging performance 

Within the Creative Multimedia cluster, Badlisham shared that MDeC’s focus in 2013 had been on the areas of games and digital comics (75% growth), and animation (26%). More Malaysian companies have started investing in this subsector, with 70% of the total investments received coming from local sources. 

“There is such an insatiable appetite for more content,” Badlisham said. “It’s proven that the quality of the work they (MSC Malaysia companies) can generate is something that we’re proud of. They have demonstrated that there are capable companies and talent in Malaysia.”

In addition, MDeC saw as many as 22 new intellectual properties (IPs) created under its IP Creator Challenge (IPCC) which amounted to RM1mil of value committed. 

On the whole, there were 399 MSC status companies reported within the cluster by MDeC in 2013. 

In comparison, the Infotech cluster recorded 2,539 MSC status companies last year, the highest figure amongst MSC Malaysia’s three clusters. 

“They are obviously the largest because that’s the traditional base of Malaysia. Malaysian companies were traditionally software entrepreneurs. They constitute the largest number of entrepreneurs within our ecosystem which is natural,” explained Badlisham. 

The highest growth was seen in the design, electronics and engineering subsector, whose performance doubled from 2012 by 34%. 

Another area which MDeC had focussed on in 2013 was Cloud computing. 

“We want Malaysians in general to adopt this technology and not just buy it. Today all of us use Cloud services. We’re also trying to encourage companies to put their solutions on the Cloud and offer that as a service,” Badlisham said. 

As many as 184 independent software vendors were nurtured in 2013, which is close to a 100% growth compared to 2012. MDeC also managed to drive the uptake of Cloud computing for 3,371 small and medium enterprises (SMEs), which amounted to an increase of 150% from 2012. 

Last but not least, the shared services and outsourcing (SSO) cluster had 344 MSC status companies in 2013 and Badlisham said the cluster was the largest in terms of employment. 

“Last year we had the largest number of new entrants,” he added. There were 56 new companies that joined the ranks in 2013. 

Forging ahead

Looking ahead, Badlisham said one of the economic areas that MDeC would be seeking to stimulate within the Creative Multimedia cluster would be in the area of licensing and merchandising for creative multimedia. 

“Licensing and merchandising plays an important part not just only in terms of revenue, but it also helps fund companies’ creation of new ideas and content. It’s an area that we’re encouraging our animation companies to pursue,” he explained. 

For SSO (shared service and outsourcing), efforts would be focussed on moving the workforce within the the oil and gas, banking and financial industries up the value chain into KPO. This would include, for example, the outsourcing of advisory and legal services. Support would also be given towards initiatives such as the Iskandar and Northern corridors. 

As for the Infotech cluster, Badlisham said MDeC hopes to do more to help MSC companies globalise their business operations. 

“This may include encouraging mergers and acquisitions. We’ve had dialogues with organisations, and we look forward to building an acceptable framework for how that can be done,” he said. 

“This business is about size and capabilities because technology moves really fast and innovation depends on people. Sometimes joining hands is another way of successfully growing.”
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