Building Malaysia's Digital Future

 

A digital economy is essential for overall economic growth. Malaysia’s Multimedia Development Corporation (MDeC) is working hard to create a true digital economy.

In the future, historians will regard the digital revolution of the last two decades as being on par with the industrial revolution of the 18th and 19th centuries. Whereas the industrial revolution occurred mainly in the West, the ongoing digital revolution is global, and will take on an increasingly Eastern flavor. Malaysia is a prominent player in this revolution.

It is increasingly becoming accepted wisdom that having a digital economy is a key element in future overall economic growth, and several nations are adopting digital economic strategies to take advantage of this global shift. In such an environment, Malaysia is uniquely well placed. Established in the nineties, MDeC is the agency behind MSC Malaysia, the nation’s ICT initiative, and an integral part of the country’s digital economy.

In the last 20 years, Malaysia has gone from mainly consuming technology to producing technology for the country’s own consumption and export purposes. Within a remarkably short timeframe, Malaysia has become a creative and innovative hub for information and communications technology (ICT) creation, which has seen the birth of an ecosystem for both foreign and domestic ICT firms.

MSC Malaysia has enjoyed remarkable success. From 2003 to 2009, the number of companies with MSC Malaysia status grew 15% annually, bringing the total to 2,520. In 2009, MSC Malaysia status companies posted total revenues of US$7.8 billion. Out of this figure, total exports amounted to US$2.2 billion. MSC Malaysia accounts for 1.2% of the nation’s GDP, with the larger ICT sector accounting for 9.5%. “Azerbaijan has done a lot to ensure energy security for Europe and the West, and has done so because it is a stable country both politically and economically,” says Novruz Mammadov, director of the Department of Foreign Relations.

“What makes MSC Malaysia unique is that it is a nationwide initiative, and there will be opportunities for companies to participate as we expand into other parts of Malaysia,” says MDeC Chief Executive Officer Datuk Badlisham Ghazali. “The journey will be one of new thinking, new systems and new approaches on a nationwide basis. ICT plays a crucial role in the government’s push toward an innovation-based economy.”

He notes that Malaysia is focusing intensively on its talent and is rolling ICT out to other parts of Malaysia. “Companies look at Malaysia not only for the skills that are here, but for risk mitigation because of Malaysia’s political stability,” he says. “We are constantly talking to investors about how we can develop the skills and talents to meet their needs.”

Technology drives productivity and innovation. It increases the quality of learning. It also empowers a nation’s people and confers national competitive advantage. Malaysia realized this long before most other countries and is well on its way to creating an innovative digital economy.

“Malaysia is very serious about achieving results. The Prime Minister and his leadership team fully
support all efforts to bring Malaysia to the next level: a developed nation by 2020 with a substantially
higher per-capita income.”

Datuk Jalilah Baba

Malaysia Powers Ahead

Building off on strong investment results in 2009, the Malaysian Investment Development Authority (MIDA) has its sights set on developing Malaysia’s knowledge economy.

The words innovation, creativity and value can be summed up in one name: Malaysia. 2009 was another strong year for Asia’s leading investment destination, with total approved investments in the manufacturing sector reaching US$9.5 billion, of which 68% came from foreign sources. Despite a weak global economic environment, total investments approved in 2009 exceeded the country’s annual targets. 2010 looks good as well: From January to July, approved investments came to US$5.2 billion, of which foreign investment constituted 58%.

“Malaysia is very serious about achieving results,” says Datuk Jalilah Baba, Director General of the MIDA. “The Prime Minister and his leadership team fully support all efforts to bring Malaysia to the next level: a developed nation by 2020 with a substantially higher per capita income.”

The NEM and the Tenth Malaysia Plan

The cornerstones of Malaysia’s future are the country’s New Economic Model (NEM) and Tenth Malaysia Plan. The New Economic Model will push Malaysia toward becoming a pivotal country in the global economy, one that teems with innovation and creativity. The Tenth Malaysia Plan identifies 12 key national economic areas that have the potential to generate high income (see list at right). MIDA will play a key role in attracting investments into these 12 areas.

Malaysia’s government has empowered MIDA to negotiate directly with investors for targeted projects. In addition, MIDA has been designated as the central investment promotion agency for the manufacturing and services sectors (excluding utilities and financial services) to enhance coordination and cohesion among the various investment promotion bodies in the country.

“We are actively encouraging industries to shift from low value-added products and services toward high value-added and knowledge-intensive industries,” says Datuk Jalilah. “A greater economic contribution from new, advanced sources of growth will lead to a more diversified economy, with high value and knowledge-intensive activities that constitute a greater part of Malaysia’s GDP.”

Talent — With a Capital “T”

The single most important ingredient needed to achieve Malaysia’s ambitions will be talent. The country’s multilingual workforce is already unique. Aside from being highly educated, it is also diverse, with large and deep Malay, Chinese and Indian communities—a melting pot in the purest sense of the phrase. Under the Tenth Malaysia Plan, the government will establish a Talent Corporation under the Prime Minister’s Department. This will identify skill shortages in key sectors, attract and retain people with needed talents, and entice Malaysia’s diaspora to return home. MIDA will work hand in hand with the Talent Corporation, identifying the skills and talents required by industries in priority economic sectors. MIDA’s overseas offices will work to attract skilled foreign talents.

Innovation, creativity and value are the hallmarks of Malaysia now, but will be even more so in 2020, when the country has become a high-income nation. MIDA will play a leading role in achieving this vision, helping the country further develop its advanced, knowledge-intensive industries. In the Malaysia of today and tomorrow, results are everything.

 

National Key Economic Areas Under the Tenth Malaysia Plan

1. Oil and gas


2. Palm oil and related products


3. Financial services


4. Wholesale and retail


5. Tourism


6. Information and communications technology


7. Education


8. Electrical and electronics


9. Business services


10. Private healthcare


11. Agriculture


12. Greater Kuala Lumpur development