National Budget 2020: 12 Reasons Why Malaysia is the Preferred Digital Investment Location

October 2019 has proved to be a most exhilarating month for us in MDEC!

Firstly, the National Budget 2020 was tabled at the Parliament on Oct 11th, and secondly, the landmark 30th MSC Implementation Council Meeting (ICM) was held and chaired again for the first time in 16 years by the PM of Malaysia, Tun Mahathir Mohamad on Oct 16th.

Both momentous occasions delivered a key message from the government: Digital Economy is firmly at the forefront of the nation’s Shared Prosperity Vision 2030 (SPV2030), which is a new development blueprint to turbocharge Malaysia’s economic development.

Attendees of the 30th MSC Implementation Council Meeting (ICM)

Making Malaysia the preferred destination for investment

I wish to highlight twelve key initiatives announced in the Budget 2020 that are vital in making Malaysia the preferred investment destination for digital technology and services.

Let’s start with the incentives to attract investment:

  1. The establishment of National Committee on Investment (NCI), jointly chaired by Ministry of Finance (MoF) and Ministry of International Trade and Industry (MITI), to expedite the process in approving foreign and domestic direct investments
  2. To attract Fortune 500 companies and global unicorns, up to RM 1 billion (USD250 million) will be made available in customized packaged investment incentives annually over 5 years
  3. Tax incentives to further promote high value-added activities in Electric & Electronics sector to transition into 5G digital economy and Industry 4.0

Going Seriously Digital in Infrastructure and Applications

With the National Fiberisation and Connectivity Plan (NFCP) as the foundation, the government has also announced major steps to propel Malaysia into the world of 5G, paving the way to higher digital adoption and fueling a robust domestic demand for digitalisation:

  • Matching grant mechanism to provide comprehensive coverage of high speed and quality digital connectivity nationwide, adopting public-private partnership approach, involving total investment of RM21.6 billion (USD5.4 billion).
  • 5G Ecosystem Development Grant amounting to RM50 million (USD12.5 million) to seed technological developments by Malaysian companies to ride the global 5G wave.
  • A contestable matching grant fund totaling RM25 million (USD6.25 million) to spur more pilot projects on digital applications such as drone delivery, autonomous vehicles, blockchain technology, other products and services that leverage on Malaysia’s investments in fiber optics and 5G infrastructure.
  • Smart Automation matching grants worth RM550 million (USD 137.5 million) for manufacturing and services companies to automate business processes.
  • 14 Digital Enhancement Centers to be built to facilitate access to financing and capacity building for businesses, specifically for SMEs, in line with Industry Revolution 4.0 (IR4.0); with RM70 million (USD17.5 million) earmarked for MDEC for this purpose.

Building Digital Malaysians

Economist Alfred Marshall, once said, “the most valuable of all capital is that invested in human beings.” Echoing this sentiment, the government is steadfast in investing to build digital Malaysians:

  • The introduction of Digital Social Responsibility concept as an initiative to contribute to digital economic development while improving digital skills of future workforce with initiatives such as technology scholarships, training & upskilling for digital skills for communities in need that are tax deductible.
  • An allocation of RM450 million (USD112.5 million) to implement a onetime RM30 digital stimulus to qualified Malaysians to increase the number of Malaysians, merchants, and SMEs to use e-wallets.
  • RM11 million allocated to inculcate Science, Technology & Innovation culture and encouraging more students in Science, Technology, Engineering and Mathematics (STEM).
  • RM20 million (USD 5 million) is also apportioned to match with RM20 million from Human Resource Development Fund (HRDF) towards encouraging working adults to undertake professional certification exams in fields relating to IR4.0.

(MYR 1 = USD 0.25)

Creating a Digital Utopia

To complement the National Budget 2020, two major initiatives were announced at the 30th MSC ICM to further boost Malaysia’s digital economy:

  • A Global Testbed initiative to attract next-gen emerging technologies to innovate in Malaysia, specifically in the fintech, blockchain, and drone sectors by attracting global digital talents and interest from investors.

DroneTech has been identified to be the Global Testbed pilot. To support this initiative, the government will be easing the work visa process for key talent in emerging technologies via a green lane facility, as well as other forms of visas such as the Digital Freelancer Pass.

  • A new Digital Talent Development Strategy Framework, designed to mobilise and coordinate the end-to-end nurturing of Malaysia’s tech talent both locally and on the international stage, is also proposed to address the growing demand for a digital-savvy workforce.

All the above signifies that Malaysia is investing heavily in building and enhancing the digital innovation ecosystem and adoption, a proof that we’re going seriously digital. It is small wonder that Malaysia’s digital economy’s growth has been outpacing the overall national economy’s growth in recent years, inarguably making us well poised towards the digital-first economy.

As a matter of fact, IMD favorably ranked Malaysia as number 2 in South East Asia in terms of future readiness in its World Digital Competitiveness Ranking 2019. Similarly, AT Kearney introduced digital resonance in its Global Services Location Index 2019 report, and Malaysia scored second highest among ASEAN economies in this new category.

Exciting Times Ahead

Opportunities abound as we speed towards the year 2020 and beyond.  

As the lead agency tasked in driving Malaysia’s digital economy forward, the excitement levels within MDEC are rising rapidly! And as the head of MDEC’s Investment team, entrusted to attract direct investments to Malaysia’s digital economy, I speak for all of us in the team that we are absolutely thrilled to work hand in hand with all industry stakeholders in ensuring the national digital economy agenda a continuous success.

We invite you, Mr. and Mdm. Investors, to come to Malaysia, capitalise the opportunities that we offer, and grow your digital business and operations from here, the heart of Digital ASEAN.

#SeriouslyDigital
#MalaysiaHeartofDigitalASEAN

Hew Wee Choong is the Vice President for Investment & Industry Development, at Malaysia Digital Economy Corporation (MDEC)

Inclusivity: The Real Value of #SeriouslyDigital

The MDEC team.

Dear reader,

In case you hadn’t noticed, we at MDEC put out lots of energy and made plenty of noise about going #SeriouslyDigital—the overarching theme we created as part of a giant effort to boost adoption and digital literacy to every corner of Malaysian society.

So undoubtedly you’ve seen the #SeriouslyDigital tag on social media that was doing the rounds over June and July, especially spiking during the major digital events that we’ve been heavily involved in over that period—Malaysia Tech Week 2019, Wild Digital, and Beyond Paradigm Summit among a host of many other satellite events.

To recap, #SeriouslyDigital came to life at Malaysia Tech Week 2019 (or MTW19). The weeklong event had 2,000 individuals from around the world attending 33 unique events in 20 locations around Kuala Lumpur, with 170 speakers coming down to share their insights and key lessons on things like Industry 4.0, dronetech, Islamic fintech, government policies, and more.

The reception for MTW19 saw 2,000 attendees, a number much better than we anticipated.

Then along came Wild Digital organised by the Catcha Group and supported by MDEC. It had plenty to offer for our startups and revealed just how much of an impact our local players are making globally.

The Beyond Paradigm Summit 2019 hosted by Serba Dinamik showcased Malaysia’s impressive prowess in AI and data science, with the highlight being Sofia The Robot who on a panel discussion with Tun Mahathir!

Also, there were various other happenings that took place along the way including the NASA Moonshot event at the Penang Science Cluster andthe conclusion of the Kre8tif! @ School pilot programme.

In a nutshell, every event that took place over June and July presented us with constructive insight on the path forward, and each one served to highlight the many opportunities on offer for Malaysian entrepreneurs and general public to get immersed in our vibrant digital economy.

The positive audience reception and support we received at these events (especially MTW19) provided us a sure sign of a community eager to embrace the inevitable wave of digital transformation.

The discussion on Industry 4.0 was one of the highlights, and something for all of us to ponder on moving into the second half of 2019.

These events were also the perfect way to showcase new and emerging technologies to our very own government participants and share with them how digital is in everything we do. Indeed, seeing is believing!

Of course, it’s also going to be especially exciting to see how dronetech will evolve to fit into our daily routines.

Ultimately, our team have taken the learnings and proof of concepts from these events as a victory not only for already existing stakeholders, but also for all those still to come into the fold.

As we have said many times at MDEC, Malaysia’s digital transformation has to be thoroughly inclusive. That means extending our efforts to anyone and everyone that can stand to benefit from the introduction of digital technology not just into their daily lives, but routines.

Wild Digital gave our Digital Ninjas an invaluable opportunity to put their out-of-the-box thinking on display for giants of the tech industry to witness.

This includes families living in rural communities that could possibly make use of the eRezeki programme for extra income, owners of small fisheries who can leverage big data and AI to increase their yield, women needing employment who can apply for the new Empowering Women in Cyber Risk Management Programme, and special-needs students that can gain skills from the MyDigitalMaker initiative. And just are just a few examples—there are many more.

It’s probably true that the path from idea to reality is fraught with challenges and naysayers, but we feel that with all of these exciting developments in digital, there exists a real opportunity for us to present a convincing case to the doubting Thomases that our work is bearing fruit.

As our CEO Surina Shukri says: our success should be measured by the amount of people we inspire along the way, and the results should benefit as many as possible, in order to make believers of as many as possible.

The Kre8tif! @ School pilot programme was a golden chance provided to differently-abled schoolkids to learn the art of 3D content creation.

So looking ahead, our various divisions at MDEC will be hard at work pushing out more inclusive programmes such as LEVEL UP KL, the AI & Big Data week, the #mydigitalmaker fair, and the Kre8tif! Conference—inspiring and exciting events that’ll help us dial up the momentum we’ve built up these past few months.

In conjunction with these events, we invite you to follow our journey and hear from our senior leaders as they share their thoughts, insights, and learnings right here on our official blog.

And while you’re at it, we also invite you to browse our revamped website to discover new opportunities and see where you fit into the bigger #SeriouslyDigital picture. We’re sure that wherever you come from, there’s a something at MDEC that’s right for you.

Thanks for reading, and welcome aboard!

Prime Minister, Tun Dr. Mahathir bin Mohamad, was impressed and ‘tongue-tied’ when he met Sophia the ‘social humanoid’ robot during the #SeriouslyDigital month campaign.
(Pic credit: TheStar)

Why investors are bullish on Malaysia’s Digital Economy

Part 2

Malaysia has a rich history as a multinational hub for traders. The Straits of Malacca has long been favoured as a major route connecting Asia, Europe and the Middle East. Today, Malaysia has evolved to being a hub of highly skilled talent, thriving within a vibrant business ecosystem founded on world-class infrastructure.

Opportunities for everyone

As the world moves rapidly into the 4th Industrial Revolution (IR4.0), MDEC is ready and fully focused on leading Malaysia’s digital economy forward by accelerating:

  1. Formulation of policies and coordination of agencies to enable success
  2. Development of future proof workforce to grow the Digital Economy eco-system
  3. Creation of global champions to increase contribution from the Digital Economy to GDP

It case you missed it, Malaysia has gone #SeriouslyDigital with:

  • Cumulative Total Investment of RM472 billion from the MSC (1996 – 2018)
  • Export sales worth RM166 billion
  • More importantly, the MSC creating a total of 182,538 jobs.

We have made significant efforts to establish the right ecosystem to foster wide digital entrepreneurship.

My thoughts here will touch on just a few illustrations of recent and upcoming opportunities that have been built through collaboration; my MDEC colleagues will also be touching on many more initiatives across different parts of the digital economy as we move further into the year.

Just a few examples:

  • Ninety (90)% of future jobs will require some level of digital literacy. The MyDigitalMaker movement has so far seen 450,000 students participating in a national public-private-academia initiative to encourage Malaysian youth to become digital producers and not just digital consumers.
  • Inclusivity — inspiring everyone to take their place in the digital world – includes initiatives such as eRezeki, which empower Malaysians to start generating online income via platforms set up to match their respective skills with digital work. More than 210,000 participants have been trained with more than 110,00 of these reporting additional income amounting to a total of more than RM220 million reported.
  • An initiative to mainstream digital entrepreneurs (eUsahawan) has so far trained 65,000 participants. More than 65,000 have reported additional sales, amounting to a total of more than RM370 million sales reported. Some individual success stories can be found at the site.
  • The Digital Free Trade Zone (DFTZ) is a national initiative to drive Malaysia’s cross border eCommerce through Digitalisation, by focusing on driving SME export through various eCommerce players. Another key outcome of DFTZ is to position Malaysia as Regional efulfilment hub.

And finally, coming back to the theme of investment: Investors come from many countries to Malaysia. Just one example — the USA is one of the top investors in MSC Malaysia, accounting for 10% of total investments as 132 American companies have so far been awarded MSC status, bringing in a total cumulative investment of RM30 billion from this investment channel alone.

However, let’s not forget that investment also begins at home. Let’s invest in our digital economy — invest some of our energy, abilities and desires – to grow and enrich our families and ourselves.

While digital transformation and digital economy may appear to be high-level taglines, digital adoption simplified is about finding out the best-use of digital tools and solutions to help build your place and base in this fast-growing and evolving new world.

As an agency under the Ministry of Communications and Multimedia, MDEC remains committed to working closely with all levels of Government to speed the building and development of our digital economy as Malaysia accelerates into a leading Digital Nation.

#DigitalMalaysiaForward   #LetsBuildTogether

Dato’ Ng Wan Peng, Chief Operating Officer

Malaysia Digital Economy Corporation (MDEC)

The long and winding road to realise DICE

Ever watched Stranger things on Netflix? Whenever I watched this series and with all its sci-fi trappings, I can’t help but to reminisce my time growing up in the 80s. I spent some of my time in Madison, Wisconsin, a cold place in the north of the USA similar to Hawkins, Indiana.

I followed my father who had a chance to continue his studies to complete his PhD at the university there.  I grew up with in Arcades, read X-men comics and enjoyed Transformers the movie (even cried buckets when my hero Optimus Prime died). These influences still continue to pepper my thoughts as I grow in these years.

Never would I have thought that my journey would land me here.

In 1996 when I returned home to Malaysia, I wasn’t sure where I was headed. All I knew was getting a job.  I was told of a new initiative – and project that the government was embarking on. The Multimedia Super Corridor and the company that was pushing it forward – the Multimedia Development Corporation or MDC.

My early journey in MDC included sleeping in the cold outside the door of the first International Advisory Panel in Stanford (was tired of all the jet lag then). I was tasked to develop one of the 7 flagship applications – the Borderless marketing and Worldwide Manufacturing Web. I also built the first few websites of the MSC and MDC. Creativity was always something that inspired me.

Then I had the opportunity to learn from the process of creating Saladin. It was one of the first large scale animation projects that the country would undertake. I wasn’t part of the team then, but the original team worked beside our IT team and I immersed and listened to what they did.

One day, the Executive Chairman of MDC then, Arwah Tan Sri Othman Yeop called me and colleague of mine to his office and asked if I could be interested to manage the first VR centre in Malaysia. Powered by SGI, this became the premier VR center for the region. This was the starting point for me to be formally part of the CMC team and with that – the journey of into what will become of my lifelong passion.

VR uses real/time engines – the same that powers most 3D games then on consoles like the PlayStation and Dreamcast. As technology pushed forward, 3D cards became available for consumers. We even worked on the Virtual Malacca walkthrough- which was developed by VisualExtreme. We had students by the droves come into our centre and get enraptured by the awe of travelling back to the 1500s. (Fun fact- to those whose seen it – you might have seen the Saladin characters that peppered the virtual space)

This led to the establishment of the CADC of which we had a team that came together from the original Saladin team. Then the true team that made Saladin into the Emmy-award nominated co-production with the renowned al Jazeera’s Children’s Channel was formed. Saladin grew from a trailer we made with Silverant to showcase what our best animation companies could do. That trailer captured the minds of everyone who saw it and also the international community. That one day, a call from the GM of AJC to our producer startled us. He wished to fly us to Qatar and wanted to co-produce with us. As they say, the rest is amazing history.

Dozens of our great animations were created then with Dato Kamil helming our division and our team fueling the industry. Upin & Ipin, Kung Fu Chicken (Chuck Chicken now), BoBoiBoy, Awang Khenit, Didi & Friends, Ejen Ali and so many more have initiated under MDEC’s support.

I then decided to take up an opportunity to be part of industry. I heard that Rhythm and Hues Malaysia – a world-class VFX house – was growing in Cyberjaya. It was also going to work on the Life of Pi, one of my most favorite books. I left the company after 14 years to the hectic life of production. And what an experience it was. It was also one of the toughest points of the journey.

R&H was the home of brilliant artists who created one of the most wondrous things we see on screen. Tirelessly hundreds of talented VFX artists work in many stages to provide the magic to the biggest box office films. What’s more amazing of that over 1000 staff of R&H we had at the peak, almost 120 of them were based in Cyberjaya. We are ever so grateful to the experienced brothers we had from both LA and India who came to uplift our local talent. We had hundreds of apprentices come through our office from around MALAYSIA. Going through many of our programs to train the new breed of VFX artists, R&H believed in Malaysia and our talent pool – and they were not disappointed.

Unfortunately, after celebrating our 25 years of magic, the global business became too competitive and it brought us to our knees.

Many Malaysians would not know that we had great young talents from all over Malaysia who worked on 22 Hollywood films from Cyberjaya, movies like Yogi Bear, Alvin & the Chipmunks, X-men First Class and Snow White and the Huntsman among others.

In 2013, Malaysia was part of the VFX Oscar race for 2 movies – the Life of Pi and Snow White and the Huntsman. We had many of our artists who contributed to both these films and we were all so proud that we Malaysians could do it and compete on the same level as the talents from large global companies.

As we celebrated our win with Life of Pi that day, we also were beset with the news that our company was in dire straits. The business was tough and we were experiencing the downturn. As management, we scrambled every day to look for opportunities to keep going. We had so many talented artists all over the world – including that 120 in Malaysia. It was one of the darkest times for me and the team. When there was some light at the end of the tunnel – it flickered and became dark again. It happened a few times until finally R&H was acquired, but not after major downsizing. As the last few had left, I joined the job market. Until today I remember talking to each and every artist under my care, and the tears that flowed from their eyes. I promised myself that what I would do in the future will matter for these talented artists one day. And this journey was that pit stop that reminded me how far we still need to go. How strong we all need to be to persevere.

After a year outside doing some consultancy and learning a whole lot about the AAA games business, an opportunity came up to rejoin my team in MDEC. This time to lead this great experienced crew to new heights.

And at the end of 2014, the journey in MDEC to build our Digital Creative Content industry just went into overdrive. We pushed out multiple programs and celebrated all our achievements. We kept on educating and creating awareness of the industry within Malaysia and on the global stage. We haven’t let up since.

On the 9th of August 2019, we have collectively come to another point in our journey together. Something the industry deserves, something that will bring together both the public sector and industry and chart the next stage of growth.

YB Gobind Singh Deo, Minister of Multimedia and Communications Malaysia, announced the next evolution of our way forward for the Industry – a policy known as the Digital Content Ecosystem Policy or DICE. The industry and stakeholder engagements and consultations will be the prelude to eventual policy formulation. The vision is to create a digital content ecosystem that is conducive, inclusive and competitive. That is my promise.

YB Gobind Singh Deo, Minister of Multimedia and Communications Malaysia, announcing the DICE policy at the Level Up KL Media Announcement recently.

DICE is the culmination of many years of MDEC’s collaborations, research and experience in developing and promoting the Digital Creative Content Industry. The announcement last week was to initiate the engagement with public and industry stakeholders who are involved and have vested interest to see our Malaysian Digital Creative Content Industry continue its leadership in the region.  It aims to ensure that our industry will have a productive and capable talent pool, a strong industry with global achievements, prolific output of commercial IP and the awareness and push of Malaysia as a regional hub. Several initiatives will be put forward for consideration and will be the basis to grow the industry even further.

I humbly request this – if anyone of you passionately desires to accelerate the growth and success of our amazing industry and help make its mark globally , this is the time to say your thoughts or shout and let it all out.

We will have platforms for you to engage us. In the meantime, email me with your suggestions. I’ll put it on the net for us to talk and figure out how we can push this industry to the stratosphere. This is the time my friends and together let’s make our mark.

DICE will be our Neverending Story.

#DigitalMalaysiaForward #LetsBuildTogether

– Hasnul Hadi Samsudin is the Vice President of Digital Creative Content, at Malaysia Digital Economy Corporation (MDEC)

Industry wide collaboration will boost Malaysia’s Digital Economy

In the spirit of the goodwill movement called ‘Pay it Forward,’ the alumni of successful Malaysia Digital Economy Corporation (MDEC) award recipients gathered together recently to celebrate their successful growth as homegrown tech champions.

Since 1998, MDEC has been supporting local companies by providing support through various programmes and initiatives such as the Global Acceleration Innovation Network (GAIN).

The successes of previous companies that were supported by MDEC have continued to fuel the sustainability and continuity of these MDEC initiatives. Some of the highlighted successful local companies include:

  • Jobstreet – crosses RM1 bil market cap in 2013 and was subsequently acquired by Seek Australia for RM1.89 billion in 2014
  • Maestro Planning Solutions (Maestro) who launched QuickSchools for the US market back in 2008 and has setup its headquarters in Silicon Valley.  QuickSchools.com is an online school management system that is optimally designed for private K12 schools all over the world. It now proudly powers over 500 schools in over 30 countries, helping thousands of teachers each day.
  • Vitrox a Penang based company made it to Forbes Asia’s 200 Best Under a Billion list.
  • The animated movie Upin Ipin Keris Siamiang Tunggal by Les’ Copaque Production surpassed Disney Pixar’s Incredibles 2 as the biggest animated movie in Malaysia with collection of RM 25 Mil box office since it released in March 2019. 
  • In 2016, Boboiboy the Movie by Animonsta Sdn Bhd has collected at the box office the value of RM 20 Million including the screening in Malaysia, Indonesia, Singapore, Brunei and Korea. The movie also won the Best Animated Feature Film for the 28th Malaysia Film Festival. Boboiboy the Movie 2 is screening in Malaysia, Indonesia, Singapore, Brunei and Vietnam this week.
  • No Straight Roads by Metronomik have won several game awards such as Excellence In Sound Design Award at BitSummit 7 Spirits, Best Indie Project award at Unreal Open Day in Shanghai and Grand Jury Award in the SEA Game Awards.
Among the alumni that attended the session were Malaysia’s renowned content creators.

Surina Shukri, Chief Executive Officer of MDEC said that it would need continued collaborative effort to create more successful Malaysian tech companies. She called upon previous grant recipients to teach the next generation of tech companies and mentor them to become global companies in the future.

Commenting on the power of collaboration and sharing, Surina said: “I hope that all the pioneering Pay It Forward alumni can help to contribute towards developing the nation’s digital economy as we need the private sector to unite together.”

Industry luminaries such as Ganesh Kumar Bangah – Chairman of PIKOM & Commerce.Asia (left) and CC Puan – Group MD & CEO of Green Packet (right) were also present to contribute their wisdom.

To find out more about MDEC’s Digital Economy initiatives, please visit www.mdec.my or follow us on:

#DigitalMalaysiaForward   #LetsBuildTogether

Why investors are bullish on Malaysia’s Digital Economy

Part 1

It’s inspiring to see that the number of companies choosing to come to Malaysia is on the increase. For example, in the past few weeks alone, Malaysia Digital Economy Corporation (MDEC) welcomed:

  • Beyondsoft officially launching its first office in Malaysia to help local talent and businesses build a healthy ecosystem.
During the launch of Beyondsoft’s first office launch in Malaysia in June this year.
  • Logicalis officially launching its new headquarters based out of Sunway Velocity in Kuala Lumpur. Besides its new headquarters, Logicalis has also invested in Malaysia’s ICT industry back in 2006, establishing a Global Support Centre in Cyberjaya to provide world class managed services to customers across the globe.
During the launch of Logicalis headquarters in July this year. The launch was officiated by MDEC’s Vice President for Investment & Industry Development, Mr. Hew Wee Choong (centre).

The sustained growth of Malaysia’s digital economy over the past few years, coupled with the rise of digitalization in industry are clear indicators that Malaysia is a country with a robust Digital Economy; one that is increasingly a preferred choice for companies from all over the world.

Despite a delicate global economy, it is gratifying that Malaysia has risen up in several global investment rankings.

Malaysia has been crowned as the best country in the world to invest in or do business for 2019, according to the CEOWORLD magazine. Ranked number 1 among 67 countries, the publication confirms Malaysia continues to be the most attractive destination for investors and businesspeople.

The rankings were based on 11 different factors including corruption, freedom (personal, trade, and monetary), workforce, investor protection, infrastructure, taxes, quality of life, red tape, and technological readiness. Each category was equally weighted.

This latest distinction follows in the wake of many other encouraging plaudits.

According to Malaysia Investment Development Authority’s (MIDA’s) Malaysia Investment Report 2018, these rankings include Bloomberg’s Emerging Market Scorecard where we again clinched the top spot in a line-up of 20 other emerging market peers, ahead of prominent nations like Russia (2nd), China (3rd) and Korea (10th).

Another accolade is Malaysia’s nine-spot leap to secure a global ranking of 15 among 190 economies in the World Bank Group’s Doing Business 2019 report.

Malaysia was top five in several areas, second only to New Zealand for protecting minority investors, third for dealing with construction permits, and fourth for cost of obtaining electricity.

These significant improvements in our business environment have helped us as a nation to regain a respected position among the world’s top 20 economies.

Leading the digital economy

We know the digital economy drives dynamic growth and productivity and innovation. Other major benefits include reduced transaction costs and enhanced efficiency. Services become faster, cheaper and better.

As of 2018, Malaysia’s MSC/digital sector has attracted investments surpassing 320 billion ringgit ($78.60 billion). It has also seen the creation of 182,538 new high-value jobs and the emergence of a domestic ICT industry worth over 40 billion ringgit.

As we escalate our transition to a high-income and developed economy, incremental growth in incomes will be increasingly dependent on improvements in human capital and productivity. In turn, this will require a multi-year reform agenda to improve the quality of workforce skills and learning outcomes from the education system. (World Bank MEM June 2019)

And there are more positive indicators for 2019: Malaysia is currently leading the pack of ‘Break Out’ nations — and heading towards being a “Stand Up’ digital economy nation. The World Bank puts Malaysia in the league of high income economies where digital adoption levels are high; higher than roughly a third of OECD [Organisation for Economic Co-operation and Development] countries.

On top of this growing global recognition, our drive to digital adoption and digital transformation will crystallize many real benefits as well as more opportunities for all of us.

Attracting investment

According to the Department of Statistics Malaysia (DOSM) the contribution by our digital economy already reached the 2020 target of 18.3%, (amounting to RM247.1bil of the national economy) in 2017.

These examples all point to an encouraging scenario for us to power through to the next stage of building our digital nation; one which includes opportunities for every Malaysian willing to reach out to grasp them.

#DigitalMalaysiaForward   #LetsBuildTogether

– Dato’ Ng Wan Peng is the Chief Operating Officer, at Malaysia Digital Economy Corporation (MDEC)

How Malaysia Helps To Future Proof Your Business Services Operations

The digitalization of Global Business Services (GBS) was the main highlight recently when my team and I had the privilege of co-hosting more than 40 GBS business services companies, together with Outsourcing Malaysia (OM), a chapter of PIKOM, the country’s national ICT industry association, at the GBS Focus Group forum held in Kuala Lumpur. 

GBS is an abbreviation for shared services and outsourcing enabled operating model, is an important focus for Malaysia, especially as one of our key initiatives is to strengthen our country’s position as an ideal location of choice for digital services.

To help drive positioning, MDEC in 2011 initiated The GBS Focus Group initiative, which is a platform ‘for the industry by the industry.’

Caption: The GBS Focus Group consists of relevant stakeholders to the GBS industry in Malaysia, i.e. captive shared services, government agencies, industry association, professional bodies and academia.

The forum’s topic – the Digitalisation of GBS – is very close to my heart. In fact, I am heartened by SSON’s 2019 State of the Shared Services Market Report on Malaysia, which mentions that about half of the GBS centres in Malaysia are leveraging on Centres of Excellence (COEs), and shifting away from being just about transactional excellence and improvement.

Now, GBS is fast becoming a value adding partner to the business by offering insights based on thorough understanding of services delivered, optimized by digital technology such as automation and data analytics.

Ascending the value chain

Take Jabil, a US-based global manufacturing services as an example. They first set up their Global IT Services in 2009 in Penang, and 10 years later, they have expanded into a global business centre, spearheading digital transformation within the group with an impressive setup of COEs for Robotics Process Automation, API Management, B2B Services and Cloud Management.

The Penang GBS operation has ascended the value chain by moving from transactional to more strategic consulting and advisory roles that include global finance, centralised procurement and risk governance.

Capitalising on Malaysia’s quality talent (95% of their 950+ employees are Malaysian), they have ventured into data analytics and Factory of the Future initiatives, as well as investing in emerging technologies such as hybrid cloud computing, internet of things, edge computing, next-generation network, predictive analytics and artificial intelligence.

Caption: The GBS Focus Group is chaired by a GBS practitioner, supported by OM as the group secretariat. Immediate past chairman: DHL IT Services. Current chairman: Jabil Global Business Center.

Malaysia’s digital ecosystem: futureproofing business

The Jabil story is strong testament of Malaysia’s capabilities to move up the value chain in digital services.

To ensure that companies such as these continue to augment and accelerate their growth in Malaysia, MDEC is constantly strive to provide the industry with strategic and innovative initiatives, from talent to infrastructure to legal framework, to ensure that the country has a strong and robust ecosystem to meet the growing demand from investors such as Jabil.

Through our digital innovation ecosystem initiatives, we have setup ASEAN Data Analytics eXchange (ADAX), Asia Cybersecurity eXchange (AsiaCyberX) and Orbit, to further spur the growth of data analytics, cybersecurity and fintech respectively, in Malaysia.

 These initiatives focus on building and facilitating skilled digital workforce, as well as creating innovative solutions, increasing technology adoption and building a thriving tech startup ecosystem. We also play an advocacy role in ensuring that Malaysia has supportive government policies, such as national frameworks on big data analytics, artificial intelligence, internet of things, and eCommerce, to move the nation forward towards becoming a leading regional and global player in these areas.

Digitalisation of GBS: Move Up or Move Out

Among the topics discussed during the GBS Focus Group event that I mentioned earlier was on “GBS Moving Forward: Move Up or Move Out”.

The audience expounded the sentiment that as the world rushes headlong into the digitalized era, digitalisation and the holistic support structure that Malaysia offers is the key to futureproofing their operations here.

Digital services is a key sector in driving Malaysia’s digital economy agenda. As the country deepens our niche in digital economy, Malaysia is the right location with the right ecosystem to catalyse a business’ digital transformation.

No matter where you are in your digitalisation journey, it is our focus to encourage more GBS companies to drive transformational excellence and value for your business operations by embracing disruptive technologies such as big data analytics, automation, artificial intelligence and blockchain.

As the Head of the Investment team in MDEC, I welcome you to come talk to me and my team members to learn more about how you can leverage on Malaysia to futureproof your digital services operations.

Hew Wee Choong is the Vice President for Investment & Industry Development, at Malaysia Digital Economy Corporation (MDEC)

DFTZ’s Second Anniversary: eCommerce Milestone

It seems just like yesterday to me – but it’s actually now the second anniversary of the launch of what is turning out to be a major stride forward in Malaysia’s eCommerce trajectory: the Digital Free Trade Zone (DFTZ).

This is just a brief note to mark the anniversary, so I will briefly run through just a few thoughts:

First of all, DFTZ was an initiative to spearhead our national eCommerce framework and it was launched to intensify Malaysia’s participation in cross border eCommerce.

The aim was to start establishing Malaysia as regional and global eCommerce fulfilment hub and to drive exports. It’s about empowering entrepreneurs and small businesses to do cross-border commerce seamlessly: The vision was to opening up the doors to global markets and to simplify eCommerce by digitalising the trade process.

The DFTZ is a milestone in the national digital economy agenda, which is providing a platform for Malaysian businesses to go online with more ease than before. A growing number of companies have already started to export via the DFTZ partners’ platform and this will only increase as more and more players become aware of and understand the value of participating in this initiative.

Onwards and upwards

I recall that when Jack Ma came to launch DFTZ in Malaysia, he said Malaysia had caught his eye a few decades ago, and that he was proud to be able to do something with the nation. He told world media: “Malaysia inspired me [back] in 1996-1997. When I was starting my Internet business in 1995, I remember that around that time, I read news in China about the Multimedia Super Corridor [MSC Malaysia] in Malaysia… it made me think: ‘Hmm! There is something there in that country! It’s a brave idea for the digital world.”

Indeed, Malaysia now has the potential to become a Stand Out country of the future. In terms of speed of digital transformation, Malaysia ranked second, just behind China and way ahead of India, Singapore and Indonesia (Global Digital Evolution Index 2017). The World Bank puts Malaysia in the league of high-income economies where digital adoption levels are high, and higher than roughly 1/3rd of OECD countries.

An important component of our digital economy is eCommerce, which is an opportunity anyone can take up. We are working in collaboration with government agencies, industry and academia to solidify and guide SMEs to adopt the opportunities in the local, regional and global markets. High inclusivity – ensuring everyone is future-ready – is one of the key building blocks of the digital economy.

Digital adoption and digital transformation are opening up the possibility of a new era of prosperity. Of course, much more needs to be done and we need to move forward wisely. We at MDEC are honoured and thrilled to play our part in forging a digital future for every Malaysian: #LetsBuildTogether!

Dato’ Ng Wan Peng is the Chief Operations Officer of Malaysia Digital Economy Corporation (MDEC)

The Perfect ‘Storm’: Malaysia as World’s Most Ideal Location for Digital Services

It seems only a moment ago that we were all counting down the seconds to welcome in 2019, closely followed of course by Chinese New Year!

The close of 2018 saw the unveiling of Malaysia’s Industry 4WRD Policy – which has been designed to speed Malaysia into the digital age with an especial focus on our manufacturing sector.

It’s an open secret that our manufacturing sector remains a key economic pillar of Malaysia contributing more than 22 percent of GDP [Gross Domestic Product]. At MDEC, we see this policy as a prelude to even more exciting milestones that lie ahead for Malaysia’s Digital Economy in 2019. 

Investor Confidence

Investor interest in Malaysia’s Digital Economy continues to grow in the areas of Artificial Intelligence (AI), Big Data Analytics (BDA), Internet of Things (IoT) and cybersecurity.

We are seeing a surge of new accelerators and venture builders from abroad, which symbolises a healthy thumbs up for our nation’s startup ecosystem. This surge includes Lumenlabs (Insurtech) and Future Labs (AI and BDA). In fact, in the area of AI alone, Malaysia already is home to a healthy number of 70 startups – and growing rapidly.

As part of Malaysia’s digital transformation strategy, verticals such as healthcare, education and agriculture will be prioritised in order to speed up our rate of digital transformation. In the light of this, the Investment team will be on the lookout for innovative technology companies from abroad to spawn new opportunities in these sectors.

Healthy Confluence

As Head of the Investment team at MDEC, I see a recipe coming to the boil featuring a healthy confluence of vital ingredients: talent, capital and markets right here in Malaysia. In my ongoing engagement with many captains of industry – spanning the banking, oil and gas, consulting, technology and pharmaceuticals sectors, a common thread is emerging. And this is the tremendous power and potential of data. To use what is fast becoming a cliché, data truly is the oil of our rapidly dawning future economy.

As a result of Malaysia’s long-standing recognition as one of the world’s best locations for Digital Services, we are now poised to attract the capital, the markets and capabilities of large multinationals with nimble and innovative startups to generate the perfect “storm.” 

Key Digital Investment Hub

Despite the fragile global economy – with some MNCs revising their business models – Malaysia continues to be an attractive location for expansion of digital services. 

Indeed, another recent exciting instance of Malaysia’s attractiveness is the forthcoming expansion of the Shell Business Service Center, which has been operating in Cyberjaya for almost 20 years. 

By leveraging on Malaysia’s increasingly agile and versatile talent base, Shell has made another strategic move by bringing additional value adding activities to its Malaysia centre. With the transformation of the centre into a high performing competitive business operations hub, Malaysia is now the global hub for the Shell Group.

Powered by big data analytics, Shell’s Cyberjaya hub offers a wide portfolio of services, which goes beyond IT, finance, contracting & procurement functions, and now includes new, unique digital services such as legal, Retail Center of Excellence, Creative Solutions, and regional Human Resource Advisory Operations. Moving ahead, Shell will be providing more services from its Malaysia hub.

This translates into the creation of even more higher value jobs in Malaysia, which is in line with Malaysia’s aspiration to become a key regional digital investment hub.

More to come

As a teaser of things to come, MDEC is currently working on a national A.I. strategy that will provide a powerful platform to fuel this “storm.” 

On a related note, Malaysia’s continuous efforts in improving the ease of doing business is reflected in our international rankings considerably – we jumped 9 spots in World Bank’s 2019 Doing Business Report

On top of this, Malaysia’s global talent ranking according to IMD jumped 6 spots in 2018, even ahead of UK, France and Japan.

In closing, I am pleased to share that Malaysia will be playing host once again to the World Congress of Information Technology (WCIT) in 2020. Malaysia first graced the global stage at WCIT 2008 in Kuala Lumpur with luminaries such as Craig Venter, who led the world’s first draft of the human genome, and Bill Gates (who appeared as a holograph).  

Stay tuned for more updates: We are all looking forward to an exciting 2019 – so let me close by wishing everybody a great year ahead! 

Hew Wee Chong is the Vice President for Investment & Industry Development, at Malaysia Digital Economy Corporation (MDEC)

Talent: Vital Building Block for Malaysia’s Digital Future

In my previous article Outsmarting Smart Robots, I said that there is an increasing consensus that jobs are changing in drastic ways and getting our current and future workforce ready for such changes is critical.

More of the same will no longer be enough. This message has been recently affirmed by LinkedIn, the global professionals platform, with the release of its 2019 Emerging Jobs in Malaysia Report. The study, which analysed millions of unique, user-input job titles from the last five years, noted that the top five emerging jobs were linked to technology. And just as important, the report highlighted the demand for ‘hybrid’ skills.

Developing a rounded skill set, which rests on digital competency, needs to be balanced with other core soft skills such as problem solving, communication, creativity, and a measure of what has been called EQ (emotional quotient).

Our strategy to become a stand out nation in the global digital world is powered by five building blocks. Implementing much of this strategy lies within the remit of Malaysia Digital Economy Corporation (MDEC), a government-owned agency under the Ministry of Communications & Multimedia (KKMM). The KKMM Minister, YB Gobind Singh Deo, first outlined these building blocks towards the end of last year.

These building blocks, which are important drivers of a strong online ecosystem, are: high-quality infrastructure at affordable prices; tech talent development; increased cybersecurity vigilance; development of platforms and enablers such as Digital ID, open data and so on; and the legislation, policies and industry structures to support the growth of the digital economy.

While the building blocks are intended to produce two key outcomes – widespread digital adoption, and the enhanced growth of digital entrepreneurship throughout the nation – building the right talent is the fuel to power our trajectory into the our future.

Deepening the Momentum

When we look at the top five emerging roles highlighted in the LinkedIn report (data scientist; full stack engineer; drive test Engineer; user experience designer; and content writer), we note that the easiest to teach at scale are the technical skills. While advanced digital skills are usually top of mind – such as coding, data analytics, and so forth – the basics are just as important for all of us to adapt to the workplace of the future.

A vital aspect of our nationwide initiatives is inclusivity. Everyone has an opportunity in Malaysia’s digital future. The basic digital skills required to perform daily tasks online need to be shared across underserved communities, the disabled and the elderly.

Our digital future will increasingly come into the hands of the next generation. MDEC has been actively complementing the Ministry of Education’s initiatives to integrate and embed computational thinking, computer science including coding into the national school syllabus. We are also work closely with a premier group of local universities to strengthen tertiary-level Computer Science curricula and teaching.

Meanwhile, the collaborative approach amplifies another public-private-academia movement, MyDigitalMaker, to transform Malaysian youth from digital users to producers in the digital economy. Digital skills both feed and complement the hybrid skill portfolio by developing problem solving and creativity among our young generation. More than half million students are actively participating in digital making activities such as coding, robotics, data analytics and more.

Transformative support to help teachers includes learning tools and further training through an Educator network. Essentially, short courses and certification programmes on programming/coding, embedded systems, digital making and more offered by #mydigitalmaker partners and university-based teacher-training hubs during weekends and school holidays to support educator readiness. To-date more than 30,000 teachers have become part of this network.

MDEC’s efforts to prepare our future workforce includes working with 12 universities to act as local training hubs for teachers who need to get trained in various digital tools. MDEC provides a computational thinking specialist to train the universities and accredit them to be training centres for the teachers. Some of them are also acting as Digital Maker Hubs, which gives students another option outside of their schools to go and explore and learn about various digital tools. There are currently 48 Digital Maker Hubs around the country, some are hosted by private companies and non-governmental organisations.

MDEC and industry partners further develop students with especial digital innovation and creative potential to help them into tertiary studies with Premier Digital Tech Universities and Preferred Digital Tech Polytechnics. The Premier Digital Tech Institutions comprise local universities and polytechnics with high graduate employability in the digital technology sectors and which have the potential to becoming top regional institutions. To date. MDEC and the Ministry of Education have jointly endorsed 8 Premier Digital Tech Universities and 5 Preferred Digital Tech Polytechnics.

Learning as a Way of Life

Before I sign off, I would like to again stress the importance of remaining relevant in the world we have entered. We must together address the 4th Industrial Revolution as an opportunity to enrich our lives through evolving ourselves and our skills by constantly learning.

One of the results of rapidly evolving digital age is that most of us will have different jobs through our lives. Very few will remain in the job for which they were formally trained. I believe that every day is a day for learning something new: An essential sign that we are producing the right talent for a standout digital future in the world will be a mindset that includes adaptability and one that is tuned always to learning.

Sumitra Nair is the Vice President for Talent & Digital Entrepreneurship in MDEC

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