EX­PLO­SIVE GROWTH

Re­gion rapidly mov­ing up value chain

New Straits Times - - Business - GOPI GANESALINGAM

ZAIDI ISHAM IS­MAIL KUALA LUMPUR bt me­di­aprima.com.my

THE As­so­ci­a­tion of South­east Asian Na­tions (Asean), with a pop­u­la­tion of 622 mil­lion and a pro­jected gross do­mes­tic prod­uct (GDP) of US$2.5 tril­lion (RM10.7 tril­lion) last year, is the sev­enth largest global econ­omy.

The re­gion is rapidly mov­ing up the value chain with sig­nif­i­cant growth in the use of dig­i­tal and In­ter­net tech­nolo­gies.

Ac­cord­ing to the Malaysia Dig­i­tal Econ­omy

Corp (MDEC) vice-pres­i­dent

(en­ter­prise devel­op­ment) Gopi Ganesalingam, South­east Asia is the fourth­largest In­ter­net mar­ket in the world, with a base of 260 mil­lion users.

“Asean’s In­ter­net econ­omy is ex­pected to grow to US$200 bil­lion over the next decade, and In­ter­net users will al­most dou­ble to 480 mil­lion by 2020. That’s great news for B2C (busi­ness-to-con­sumer) play­ers. These es­ti­mates of­ten in­di­cate trends; in this case, busi­ness done on the In­ter­net is go­ing to ex­plode across South­east Asia.”

The chal­lenge for busi­nesses try­ing to gain mar­ket ac­cess was the het­ero­gene­ity of Asean, added Gopi.

Gopi pointed out that un­like the Euro­pean Union, Asean was es­sen­tially a loose po­lit­i­cal as­so­ci­a­tion with lit­tle in the way of a com­mon set of reg­u­la­tions al­low­ing firms to op­er­ate freely across bor­ders.

“Un­like most Asean coun­tries, both the cus­tomer base and hu­man re­sources are eas­ily ac­ces­si­ble within Malaysia.”

Many in­ter­na­tion­ally-recog­nised semi-con­duc­tor man­u­fac­tur­ers and sup­port com­pa­nies have es­tab­lished them­selves in var­i­ous free zones through­out the na­tion. The an­i­ma­tion in­dus­try has also found it con­ve­nient to op­er­ate from Malaysia.

“Pinewood Stu­dios is a world-class fa­cil­ity lo­cated in Iskandar Malaysia, where the Marco Polo TV se­ries is be­ing filmed. We also have Les Copaque of Upin & Ipin fame and KRU Stu­dios, as well as sev­eral other an­i­ma­tion com­pa­nies op­er­at­ing in Cy­ber­jaya, in­clud­ing An­i­ma­sia Stu­dio, An­i­mon­sta Stu­dios, Gig­gle Garage, and many oth­ers.” Gopi noted that Malaysia hosts sev­eral hun­dred tech­nol­ogy and ser­vice com­pa­nies out of Cy­ber­jaya.

“Many such firms serve clients around the world. Sci­com, with over 1,800 Kuala Lumpur-based call-cen­tre staff, serves 18 coun­tries in 19 lan­guages and di­alects apart from English and Ba­hasa Malaysia.

These firms and oth­ers like them were com­fort­able op­er­at­ing in the frag­mented reg­u­la­tory en­vi­ron­ment that made up Asean, said Gopi.

“In re­cent times, we have firms such as CXS from Nor­way, spe­cial­is­ing in pro­fil­ing an­a­lyt­ics, re-domi­cil­ing their op­er­a­tions to Malaysia. This makes it a nat­u­ral part­ner for “one-size-fits-all” global com­pa­nies that are seek­ing to tap the re­gion’s po­ten­tial.”

Malaysia’s re­gional ex­pe­ri­ence has led to sev­eral merger and ac­qui­si­tion ex­er­cises, as in­ter­na­tional firms seek to build up their Asean pres­ence.

Gopi pointed out that, in 2010, Face­book ac­quired lo­cal de­vel­oper Oc­tazen So­lu­tions.

He added that Malaysia, via MDEC, will in­tro­duce sev­eral new pro­grammes to at­tract re­gional tal­ent and en­trepreneurs.

Asean’s In­ter­net econ­omy is ex­pected to grow to US$200 bil­lion over the next decade.

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