Malaysia: Traversing the Digital Landscape
Country at critical juncture in a new world with fresh rules
A country’s digital transformation is a critical post-pandemic development. The role of government is to provide the necessary direction and resources for this transformation. It is also the government’s responsibility to ensure that all citizens have access to these resources.
Furthermore, the government must create incentives for businesses to invest in digital technologies, besides monitoring the progress of digital transformation and making adjustments along the way.
MyDIGITAL to the fore
The Malaysian government has been proactive in promoting digital transformation with the launch of the MyDIGITAL Corporation. This national strategy aims to transform Malaysia into a high-income nation focused on digitalisation and make the country a regional pioneer in the digital economy.
Fabian Bigar, CEO of MyDIGITAL Corporation, recently said the IR 4.0 Policy will open up new doors of opportunity by giving Malaysians access to edutech’s skill enhancement services, which help them land high-paying jobs with competitive salaries.
The integration of social enterprises with IR 4.0 technology will also allow them to address socioeconomic issues and facilitate digital onboarding for rural-urban communities that are traditionally hard hit by poverty and lack access or knowledge on how new technologies work best in their environment.
Furthermore, the country can further develop industry-led and sectoral-based IR 4.0-powered capacity to help businesses grow in every type of business.
Engagement with the private sector is crucial to accelerate the growth of digital economy in Malaysia, just as it is important to leverage on emerging technologies to drive innovation, Fabian further noted.
MyDIGITAL Catalytic Projects Task Force has also established with the government taking on a more proactive role of facilitator. In doing so, they can enhance an enabling ecosystem for policy and regulatory reforms across ministries or agencies while also working towards key challenges that are slowing innovation.
Laudable ambition
"The MyDIGITAL initiative reflects the country’s ambitions to transform Malaysia into an advanced digital economy. That’s well and good, but now just step back! Set up the environment and pass the regulations, but leave it to the market to drive this.
“Interfering, for example, by setting up an intermediary 5G company to monopolise and control the entire deployment in Malaysia is a mistake. The government has lost billions in income associated with 5G auctions and is now facilitating billions in the outflow of Malaysian funds to build an unnecessary intermediary. This is a double whammy to our bottom line books of the country,” said Michael Warren, CEO of Consulting Board Asia.
Warren cautions that it does not just concern the financials but the overarching story to the world that the government wants to get involved in on-the-ground execution.
Warren ... "Keys to a country’s success in digitalisation are not solely reliant on domestic conditions but also on the influence of the global digital environment."
Build quick, fail fast & rejuvenate faster
Bobby Varanasi, CEO of Matryzel Consulting, is a strong proponent of limited government intervention in the marketplace. He believes businesses should be free to compete without interference from bureaucrats.
Varanasi says: “The government should not be in business. Instead, they should enable through policy, regulations, incentives or FTAs, and then get out of the way. Businesses should instead take direct ownership of building value chains across their sectors in a tangible manner through collaboration amongst players (both organic and inorganic). This would permit entities to build quick, fail fast, and rejuvenate faster.”
Varanasi adds: “The government must regulate, enable transactional and participative equity, and access markets. In my view, it should stop floating many frameworks and taking onus for their success – they don’t know what they will never know.”
Global outlook
Experts say factors such as the global economic order, geopolitical power shifts and social transformation affect the digitalisation progress. Varanasi believes that Malaysian policymakers are considering these factors to forge a path to accelerate digital transformation.
However, he points out that the government’s inadequacy stems from the lack of a strong set of sector-specific advisors that can help steer policy in the right direction while creating legal and otherwise structures for businesses to self-govern and collaborate.
“The over-hyped emphasis on ‘Digital Transformation’ is a misnomer. Instead, the emphasis should be on sectoral, socio-economic and civil transformation, enabled by digital solutions.”
Meanwhile, Warren stresses that the keys to a country’s success in digitalisation are not solely reliant on domestic conditions but also on the influence of the global digital environment. While some countries are progressing well with their digitalisation agendas, they cannot do so in isolation and need to consider the global picture. This is because the world is now more interconnected than ever before, and advances in one country can have a ripple effect worldwide.
“We have seen how the whole blockchain and crypto markets exploded onto the world stages, how crypto mining created whole new national businesses for some countries and how bitcoin manipulation by billionaires has recently wiped trillions of dollars of the global digital markets.”
The emergence of Web 3.0 and the Metaverse will continue to shape many aspects of our local and global markets. Therefore, we need to understand these technologies and how they will affect our daily businesses and global plans.
The potential for a completely immersive, integrated, online world is immense, and we must be prepared for the technologies’ changes.
Wait-and-see
As new technologies become widespread, we must understand how they work and how they’ll continue to shape our world. “In the past half-decade, we have seen huge business opportunities emerge around the US-China trade wars. While we set up task forces to monitor and study, we missed numerous sizable investment opportunities to solidify local and regional engagements with China, our largest trading partner over the past decade,” says Warren.
Furthermore, the ongoing Russia-Ukraine war is breaking many European global supply chains, and all that business is now swinging through Asia. He laments that the opportunities are turning up in Malaysia “weekly, but the Malaysian government and companies are again adopting a wait-and-see attitude” instead of embracing the possibilities.
“In the digital space, billions of dollars of blockchain investments flow into neighbouring countries over the past five years, but we are only starting to try to grasp this. We should already have a national strategic policy group to look, study and implement national action plans for Web 3.0 and the Metaverse. These are not just sexy topics.
Varanasi ... “The government must regulate, enable transactional and participative equity, and access markets."
“There are many more emerging global digital ecosystems and not just isolated to cloud or 5G or DeFi (Decentralized Finance) and others, buts it’s a whole integrated ecosystem. So this is a clear area in which the government should fund and empower an organisation like Malaysia Digital Economy Corporation (MDEC) to be responsible and form the basis of MyDIGITAL 2.0.”
Talent: Achilles Heels
As the world continues to digitise, countries face increasing pressure to keep up with the changing landscape. In this regard, talent is one of the biggest challenges to succeeding in the digital age. Countries must have a workforce with the appropriate skills, which can be challenging.
There is often a mismatch between the skills employers are looking for and the possessed skills. As a result, many companies struggle to find the talent they need to implement their digital transformation strategies.
Talent has always been one of the critical ingredients for economic success, and this will continue to be the case in the digital age. As a result, countries attracting and retaining top talent will be better positioned to succeed in the coming years.
The MyDIGITAL initiative reflects the country’s ambitions to transform Malaysia into an advanced digital economy.
“Changes to national talent strategies will be among the most valuable moves to improve performance through digital transformation. The Triple Helix theoretical model of innovation is still the best model out there for the country, in my mind,” says Warren.
The Triple Helix innovation model is a framework for creating an environment conducive to economic growth. It asserts that there is a symbiotic relationship between academia, industry and government and that each plays a role in driving innovation.
In this model, academia provides the foundation for new technologies. The industry then commercialises them, bringing them to market and creating jobs. Finally, the government provides the policy framework and infrastructure to support innovation. This model has been successful in many countries.
He says: “We are only now beginning to realise what needs to happen next to facilitate this transformation better. Apart from talent, the challenges we see today around digital transformation are the same as we have seen in the past.”
Aerial view vital
Perhaps the most crucial change to digital transformation is the speed at which the COVID-19 pandemic
forced ad-hoc changes to how businesses operate
and, in turn, the adoption rate of digital processes.
The challenges are daunting, but the way governments and the industry approach the entire
gamut of IT, business operations, security and digital
transformation should change, too.
Warren adds: “Even as the pandemic abruptly
forced digital transformation upon industries, the
change should be viewed as a comprehensive, continuing and evolving process. ‘Comprehensive’ because
digital transformation involves analytics and workflow
and encompasses networking, IT, communications
and cybersecurity — the entire network now becomes
interactive.
“Digital transformation is ‘continuing’ because it
requires maintenance, and many industries in the
country likely need to account for the technical debt
they had accrued as systems were put in place to
provide immediate protection.”
Suppose Malaysia can traverse the COVID-19 pandemic, its social shakeups and economic reverberations with relative safety – then the next generation of
digital transformation must “evolve” into something
truly immersive, including augmented reality and new,
unthought-of applications and technologies.
