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Unraveling the Secret of Digital Malaysia

An interview with

The rise of the digital economy in Malaysia is no surprise, given the foundation that has been laid for the country to enable digital across the everyday lives of its citizens. BRINK Asia spoke to Wei Chuan Beng, commission member of the Malaysian Communications and Multimedia Commission on the role of government, policy, education and businesses in ensuring that the digital revolution in Malaysia is truly inclusive. He further speaks of the role of citizens in pushing digitization and the need for regional cooperation in this area.

BRINK Asia: The digital revolution is an important aspect of Malaysia’s overall economic growth and development. What steps is the government taking to ensure a fully digital economy?

Wei Chuan Beng: When we speak of digital Malaysia—people talk about economic development and trade. This journey started in 1996 with the establishment of the MSC or the Multimedia Super Corridor—a special economic zone in central-southern Selangor state, catering to high-technology businesses. The vision was to move Malaysia to a knowledge economy, to eventually become a fully digital economy.

That being the backdrop, the roots of digital Malaysia are found in acts and regulations pushed by the government through the years. For instance, the Communications and Multimedia Act of 1998 set the tone for regulations in communications and multimedia activities in Malaysia. Similarly the Digital Signature Act and the Personal Data Protection Act, to name a few, have played a part in creating a conducive and trusted environment for the ICT industry. We are reaping the benefits of it today.

Coming to inclusion, 80 percent of government services for citizens and enterprise entities are digitized. When it comes to getting information on government services, 95 percent is available online. Let’s say you want to get a passport issued—the whole process does not take more than a few minutes—my experience has been 15 minutes. The same goes for registering a company online. Similarly, tax returns all happen online and at great speed. It is not without reason that in the World Bank Ease of Doing Business ranking Malaysia is 5th in Asia and 15th globally. We are neck-to-neck with the top four in Asia, but the fifth rank often gets forgotten!

With 87 percent of the population using the Internet, and a broadband penetration rate of 118 percent, the Malaysian government is strongly committed to ensure that this digital journey is inclusive for all. There is now a push to further increase access and coverage, with lowering of prices so that every strata of society can participate in digital Malaysia.

BRINK Asia: What is the role of education in achieving digital inclusion for all? And what steps is Malaysia taking in this regard?

Mr. Wei: We do recognize that education is an enabler for any individual to be digitally ready. Malaysia’s literacy rate is among the highest in the world. Malaysia also has a pretty good culture of entrepreneurship, which takes root from a strong educational foundation. In fact, in Malaysia, 98.5 percent business establishments are SMEs—that is a fabulous statistic and illustrates that a lot of people are entrepreneurs. STEM education is strong, and moreover, Malaysia has seen a lot of citizens studying abroad as well, especially in Western countries.

So it is a combination of strong foundational education, supported by higher education (both public and private) that is also very vibrant—all leading to higher digital adoption. I would use the term “hidden gem” here. Even in the education sector, people always look at the top three, and although Malaysia has consistently ranked high, people tend to forget or overlook it.

It is absolutely critical to enhance innovation and adoption of technology to unlock the potential of the digital economy as a future driver of growth.

BRINK Asia: What is the role businesses play in making Malaysia digitally inclusive?

Mr. Wei: There are two things. One is that Malaysian entities should see that digital inclusion is within and outside Malaysia. I would like to point out Lazada (now taken by Alibaba) and Grab. They had so much business within Malaysia that they expanded abroad. Both are Malaysian companies that used Malaysia as a test bed and then launched their services into ASEAN. The role of digital inclusion for the private sector shows through these two company examples.

Digital services companies from other parts of ASEAN also come to explore the ready-market. We have fantastic regulation and digital infrastructure, making Malaysia a low-hanging fruit for digital services and a proven cash cow for digital services companies.

BRINK Asia: Digital infrastructure, technology and services have been recognized as enablers and equalizers, as you say. Can you explain this?

Mr. Wei: I think it is very hard to find a real rural Malaysia. Smartphone penetration is really high. So it is an enabler and equalizer. But we don’t rest on this laurel and continue working on it. For instance, we have the Universal Service Provision Fund managed by our commission to build infrastructure in digitally underserved areas. On the one hand, we are trying to cover all the fringes; and on the other, we are launching a master plan in the next few months called the National Fiberization and Connectivity Plan—the aim of which is to make Malaysia a digitally advanced country within five years.

BRINK Asia: What are the risks emanating from the weak or poor development of digital infrastructure in Malaysia? And what are the top concerns of not achieving digital inclusion?

Mr. Wei: There is always concern about the digitally underserved pockets of the population. First are the people who are less fortunate in terms of not getting enough education, and second, they may be from an economically deprived background. I think we need to do more to include these sections so that they, too, can reap the digital dividend. If we do not get digital enablement right, the country can fall behind in a time of fast progress in the region. Malaysia is doing a lot to achieve this at the government and policy level.

However, the world will soon be even more interconnected. It is imperative that Malaysia address issues such as the mismatch in the labor market, further improve the quality of education and training, and further diversify its basket of export products and markets. Lastly, given the times we are in, it is absolutely critical to enhance innovation and adoption of technology to unlock the potential of the digital economy as a future driver of growth.

BRINK Asia: In your opinion, what can other countries in the region learn from Malaysia in this space?

Mr. Wei: The Communications and Multimedia Act of 1998 set the ball rolling. It allows you to experiment with digital technologies. It gives you the permission to build the infrastructure once you have the license. This act is technology-neutral and is very enabling. Because it was conceived with public-private cooperation in mind, the digital space in Malaysia is very conducive to innovation and investments from both public and private enterprises. Such policies are what stand Malaysia apart and are an example for countries in the region that want to digitize.

BRINK Asia: Will ICT companies in Malaysia participate to take a piece of the pie or innovate to enlarge the pie?

Mr. Wei: Malaysia has a very vibrant ICT industry. First, if you look at the MSC status companies, there are approximately 3,200 of them. Second, there are more than 3,000 ICT companies, half of which have very strong technical capabilities—they develop, support and integrate. Therefore the competencies have been very strong. I foresee Malaysian ICT companies expanding into Southeast Asia. In short, I see the size of the pie growing.

BRINK Asia: Both digital investments and jobs in the field have been increasing in Malaysia. Yet, challenges remain. What are the biggest ones?

Mr. Wei: I think the biggest challenge in the region is for ASEAN economies to unite and see more commonalities than differences. One day, when people are not only driven by taking care of their own interests, but think of working together by increasing regional cooperation, we can drive investor confidence and investments. Second, I think we must look at the people aspect—citizens of a country must have the desire for continuous progress and learning. It is very important that people are willing to accept the digital way.

Wei Chuan Beng

Commission Member of the Malaysian Communications and Multimedia Commission
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