Pt 2: Malaysia: Leading the Regional’s Digital Economy
Continuing from the first in this two-part series, it’s time to learn and understand why Malaysia is a sought-after location for tech and digital investments.
Right now, it’s well-known that Malaysia is rapidly being recognised as an ASEAN testbed, a highly digital society fueled by many races and nationalities, with a well-developed and varied infrastructure.
New avenues of industry areas are being developed under Malaysia’s Digital Economy plan – focusing on Big Data Analytics (BDA), eCommerce, and the Internet of Things (IoT). It is this combination that will deliver the most impactful benefits to the new economy. Driven by consultative collaboration with industry, Malaysia is working towards a conducive framework to spur healthy, open AI innovation.
Providing a digital hard and soft infrastructure, comprising high speed internet, world class physical infrastructure, business friendly policies, innovative talent ecosystems remain priorities for Malaysia, as evidenced by the Malaysian Cabinet’s approval of the National Fiberisation and Connectivity Plan (NFCP) recently.
With the growth on different fronts of our digital economy ecosystem, you can see how strongly Malaysia is transitioning along the road of transformation. The marriage of IoT, Big Data Analytics is feeding Artificial Intelligence, which many see as the defining force of the 4th Industrial Revolution (also known as IR 4.0.).
These are stepping-stones to even greater things. As a trading nation, Malaysia is now moving up the value chain and trading in ideas, innovation and new technologies in a spirit of collaboration.
The Digital Silk Road is bringing new waves of tech opportunities to ASEAN – expansion of Chinese tech companies into this region, particularly in e-Commerce, smart cities and Industry 4.0, automation and AI.
I see the increasing tide of collaboration between Chinese and Malaysian enterprises as the latest testament to the growing strength of Malaysia’s Digital Economy ecosystem, which prioritises greater growth, innovation and shared prosperity.
Let me share just a few more recent examples:
- China’s Alibaba set up its first overseas electronic World Trade Platform (eWTP) hub in Malaysia linked to the Digital Free Trade Zone (DFTZ) initiative to accelerate eCommerce opportunities and growth
- Closely linked to above is Malaysia Week – a successful collaboration between China and Malaysia to drive eCommerce opportunities for SMEs – will return for a second time following last year’s successful inaugural edition
- Malaysia’s first AI park resulted from a collaboration between Malaysia’s G3 Global, China Harbour Engineering Company and China-based Sense Time Group, and is touted to be the most valuable AI startup, to set up Malaysia’s first AI park, which is expected to see more than USD1 billion in investments over the next 5 years
- Malaysia is the first country outside China selected by Tencent to launch its digital payment/ewallet solution – WeChat Pay
- Huawei Technologies has a regional presence from its Malaysia headquarters and continues to work closely with Malaysia to grow the country’s digital ecosystem
- Beyondsoft officially launching its first office in Malaysia to help local talent and businesses build a healthy ecosystem, which includes a KL innovation hub for retail solutions
- Just recently, an agreement was signed with National Development Reform Commission – International Cooperation Centre (NDRC- ICC) – enabling us to work closely to facilitate China’s digital tech companies entry into Malaysia
Let me return to discussing the ASEAN opportunity. The region’s combination of strong and vibrant economy, youthful demographics, rapid urbanization and ongoing economic integration makes it a very attractive market for business expansion. And let’s not forget the other factors: the region’s combined GDP of USD$2.5 trillion; 628 million people (~10% of world population), with about 40% of citizens under 30 and are digital natives; and a literacy rate 94%
Malaysia is strategically located in the heart of ASEAN, with a population of 31 million, 68% internet users, 65% smartphone users; 82% broadband penetration, 31% of internet users use mobile to purchase. From Greater KL, major cities in the region can be reached within 8 hours by flights.
In addition to Malaysia being the best springboard to ASEAN, I believe other factors such as being a hub for Asian languages, a rich culturally diverse workforce, which is buoyed by highly skilled and growing talent pipeline, strengthened by business-friendly government policies.
Malaysia Digital Economy Corporation (MDEC) is a government agency entrusted to lead Malaysia’s digital economy and drive shared prosperity for all. As a one stop centre, we at MDEC are well versed in facilitating and easing the entry of companies into Malaysia. These programmes include our Digital Hubs strategy, talent development pipeline, and the Malaysia Tech Entrepreneur Programme, which are focused on helping companies make the right decisions, ensure high speed growth, connecting companies with the local business ecosystem and to provide fast insights into the market landscape.
Furthermore, MDEC is also an investment promotion specialist for the digital economy and is able to help investors connect the dots in the ecosystem.
These ingredients will help to encourage knowledge sharing, which is vital to successfully fuel rapid growth for our mutual prosperity. Recently, the Maritime Silk Road Legend Concert celebrated the 45th anniversary of diplomatic relations between Malaysia and the People’s Republic of China. Indeed, Malaysia was the first country in the region to establish diplomatic ties with China when the second Prime Minister, Tun Abdul Razak Hussein, visited the Republic in 1974.
Today, the Digital Silk Road is connecting every country and all people: and Malaysia’s role, both hub and gateway to Asean, has become even more significant. New horizons are opening up for companies from China, and indeed for all of us!