GBS: Malaysia Reinvents to Stay Ahead in ASEAN

The global business services (GBS) industry has undergone a massive transformation over the past few years. This upheaval can be attributed to the fourth industrial revolution, which has brought about technology disruptions on a global scale.

Malaysia has been proactively adapting to the ever-evolving GBS landscape, and to remain competitive, the country has implemented solid strategies that will provide an attractive and appealing option to multinationals and investors.

While Malaysia is not alone in the GBS space, it has what it takes to be the pivotal GBS location, especially in ASEAN.

Today, there are currently 567 active GBS companies operating within MSC Malaysia, with 58% being foreign-owned companies across various segments such as business process outsourcing, IT outsourcing, knowledge process outsourcing, shared services, nearshoring and offshoring.

Many MNCs have invested and continue to invest in Malaysia and operate in various industries and key sectors.

Malaysia is also ranked first in the INSEAD Global Talent Competitiveness Index 2022 - global ranking in the upper middle-income group, second in ASEAN in the IMD World Digital Competitiveness Ranking 2022, and third in the Kearney Global Services Location Index 2021, a position held since the inception of the report in 2004.

Malaysia’s next move
To continue its pursuit of GBS investments, MDEC has unveiled their ambitious plan for 2021-2025 – the “Malaysia Digital Investment Strategy” – aiming to attract RM50 billion (US$ 11.16 billion) worth of investments and create 50,000 jobs, among others.

Raymond Siva, MDEC Senior Vice President, Digital Investment, said that this strategy would help elevate the country as a digitally enabled nation with promising economic prospects.

“The government is committed to improving digital infrastructure and providing a pipeline of talent to make Malaysia the preferred destination for high-value GBS such as data and analytics, AI and automation, as well as cybersecurity,” Siva said.

In July 2022, Malaysia Digital was officially launched – ushering the nation into a new era of digital innovation and growth. This strategic initiative is designed to drive economic expansion through impactful projects, sustainable investments and progressive policies – positioning Malaysia as one of ASEAN's leading hubs for innovative technology advancement.

Conducive environment
Malaysia is proving to be remarkable in the face of global economic turmoil. With its robust digital infrastructure, forward-looking public and private initiatives, as well as 1.21 million skilled talents contributing towards an ever-growing digital economy, Malaysia remains a competitive player on the global business stage.

Siva said these developments have become their ace up the sleeve due to government efforts such as reskilling programs for existing sectors and training new talented minds along with it – all while adapting swiftly to meet any challenges this pandemic could throw at them.

Malaysia’s long history of attracting major GBS players has also developed its local GBS talents.

“The availability of these experienced talents and leaders is also one of the attractive hallmarks for many GBS players when choosing a destination to set up their operations,” he added.

Location-specific incentives
Besides incentives provided under Malaysia Digital, there are also other location-specific incentives that are designed for GBS players, such as GBS Iskandar in the southern state of Johor and GBS@Ipoh in the northern state of Perak.

The Malaysian government also looks to enhance investors’ business strategy by introducing the Digital Investment Office in 2021. MDEC helps facilitate a streamlined entrance for companies to take advantage of Malaysia's burgeoning high-impact digital investments sector through the fully-digital platform.

“MDEC will continue to lead the nation's digital economy transformation towards the aspiration of Malaysia Digital, making Malaysia the preferred hub for world-class digital businesses and talents.

“As the national digital investment promotion agency, we welcome GBS companies to land and expand in Malaysia and make Malaysia the launchpad into ASEAN,” Siva concluded.