Why investors are bullish on Malaysia’s Digital Economy
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.
- 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.
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.
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.
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.
- Dato' Ng Wan Peng is the Chief Operating Officer, at Malaysia Digital Economy Corporation (MDEC)