Pushing forward on the digital grid
“We must develop a comprehensive and globally shared view of how technology is affecting our lives and reshaping our economic, social, cultural, and human environments. There has never been a time of greater promise, or greater peril.” Klaus Schwab, World Economic Forum founder and executive chairman
As we enter the early stages the era of the Internet of Things (IoT), or what has now been coined as the ‘Fourth Industrial Revolution’, it is now more imperative for governments of major economic countries and businesses to catch up or risk falling behind this new evolution sweeping through global markets.
The population is shifting, the young generation of tech-savvy Millennials are rapidly moving into their prime spending years.
Governments and businesses now have to re-examine the way they run their economies and businesses to meet the demand of this new breed of consumers and the incoming digitally-apt generations.
According to a report by Goldman Sachs, the Millennials, or Generation Y, is one of the largest generations in history. It pointed out that Millennials have come of age during a time of technological change, globalisation and economic disruption and their impact on the economy will be huge.
Already, governments in major economic countries and conglomerates worldwide are recognising this change by implementing digital tools into their every day operations to meet this new demand.
From simple marketing and advertising on online social medias, to running day-today business matters on a fully digitalised system, this fast-moving digital landscape is now the new norm for today’s economy.
In Southeast Asia, according to a report by Google and Temasek Singapore, the digital economy in Southeast Asia is expected to increase 6.5-folds over the next decade, to reach US$200 billion.
The report also pointed out that Southeast Asia is the world’s fastest growing internet region with an approximate 14 per cent fiveyear compound annual growth rate (CAGR) and this internet population is expected to reach circa 480 million users by 2020, making it fundamental for countries such as Malaysia to tap in to this rich resource.
In Malaysia – while there are still no clear indication of where Malaysia stands in terms of its digital economy against its neighbouring countries in Southeast Asia – the digital growth in the country has been steady but some have viewed it as slow, compared with other leading nations in the region.
According to a Ernst & Young’s (EY) report titled ‘Decoding the Malaysian digital DNA: From smart to savvy’, more than half of Malaysians believe that the country’s digital economy is a work-in-progress as 57 per cent believe Malaysia’s digital economy is ‘less advanced’ than leading nations, 53 per cent are dissatisfied with internet speed, while 51 per cent think the cost of accessing data – whether through fixed or mobile internet or while roaming – is unreasonable.
Nevertheless, EY pointed out in the August 2016 report that Malaysians have kept pace with digital device adoption, with smartphone usage at 91 per cent and daily internet usage at 87 per cent.
Nevertheless, more still needs to be done for Malaysia to improve itself as a digital nation. With the 2020, high-income nation dateline just three years away, and the growing digitally-savvy population taking centre stage in the nation’s economic growth, Malaysia is ramping up its efforts to improve its digital infrastructure and economy. Last year, during the announcement for Malaysia’s Budget 2017, Prime Minister Datuk Seri Najib Tun Razak revealed a slew of initiatives aimed at boosting the digital economy and the digital adoption across various sectors of the economy.
The budget initiatives related to the digital economy includes a commitment to improve the speed of fixed line broadband services with a RM1 billion allocation to the Malaysian Communications and Multimedia Commission (MCMC) to ensure quality coverage and speed of up to a baseline of 20MB per second.
The Budget 2017 measures also builds on various digital inclusivity including the eRezeki, and eUsahawan programme, to improve the human capital in Malaysia.
Aside from that, Najib had also announced that executive chairman of Alibaba Group and internet tycoon Jack Ma has been appointed as the government’s digital economy adviser to help execute measures that could further lift Malaysia’s status in on global digital stage.
Pertinent to that note, Budget 2017 also introduced initiatives to develop more digital hubs in Malaysia including the world’s first Digital Free Trade Zone (DFTZ); a microcosm to support internet companies to trade goods, provide services, innovate and co-create solutions.
“Malaysians have embraced the internet economy and eCommerce in a big way. We are now leading the eCommerce market in the region generating revenue of US$2.3billion in 2015. With the launch of the world’s first Digital Free Trade Zone, Malaysia will serve as a regional eFulfillment center, and also become the regional hub for SMEs, marketplaces and monobrands,” said Najib during the launch of DFTZ last month.
“If we want double-digit growth, I believe the only sector that can bring us towards that direction is the digital sector.
“We must push hard and must make a success of Digital Malaysia,” he said at the National Transformation 2050 (TN50) Townhall Dialogue held recently.
On par with the nation’s race on the digital grid, Sarawak’s government is also looking to push the digital adoption across the state.
BizHive Weekly takes a look at the progress in the state.