Malaysia’s Digital Transformation Potency

Covid-19 and lockdown measures globally, have successfully forced humanity to go digital. Conferences are now webinars, company client meetings are done on Zoom, church services are online and even Eid al-Fitr family gatherings are now virtual.

Despite the jump in streaming services such as Netflix (+195%) and Dimsum (+140%), is Malaysia ready for a complete digital transformation? Do we have the infrastructure to do so?

According to an article in Starbizweek dated 16 May, Malaysia ranks 37^th in Asia for average download speed (78.82 Mbps) whereas Singapore comes first with 194.09Mbps. Furthermore, Malaysia ranks 84th with 22.52Mbps for the mobile broadband download speed. The mobile download speeds of our Southeast Asian counterparts are better. Singapore ranks at 11^th place (with 52.96Mbps), Laos at 63^rd place (with 28.49Mbps), Vietnam at 64^th place (with 26.50 Mbps) and Thailand at 80^th place (with 23.43Mbps). These markers are not the hallmarks for a country’s digital infrastructure development. Nonetheless, they provide insights into how Malaysia is doing compared to our Asian counterparts, to say the least.

So how did other Asian countries get “there”?

From 2013-2018, the Republic of Korea was ranked within the top 3 in the world for ITU’S Global Information and Communication Technology (ICT) Development Index. It also garnered the title ‘Most Innovative Economy’ on the Bloomberg Index. This country was not always ahead of the curve. Almost 70 years ago, the country emerged from the Korean War as one of the poorest countries in the world. The stunning transformation boils down to three major factors: an advanced education system, cultural characteristics and government support.

The Korean attitude towards education launched them out of post war poverty. Their focus on ‘traditional’ subjects like Mathematics and Science has produced a new generation that is technically savvy. Apart from that, their education incorporates the latest technological advances. Schools in the republic use electronic boards, VR headsets, tablets, PCs and digital textbooks to “foster 21^st century learners”. Their education system focuses on critical thinking and problem solving, collaboration, character development and communication. All key components needed for the 4^th Industrialisation.

Besides that, Koreans have an efficient attitude in welcoming new technological development. In order to overcome the rural and urban technological divide, the Korean government rolled out the Broadband Convergence Network (BCN) in 2004. This scheme was intended to connect the most remote of areas. The attitude of the Korean government was to execute the plan as quickly as possible and then improve pitfalls in the scheme in due course.

Lastly, the South Korean government was forward thinking with ICT implementation. In the early 90s, investments were made when the Internet was at its initial stages. Later in the decade, the Korean Agency for Digital Opportunity and Promotion (KADO) was established to increase internet access and digital literacy training up to 10 million people. The government also annually spends 5% of its GDP to Research and Development projects. This is approximately USD 91 billion, making it the second country after Israel to spend on R&D. In a bid to prepare for the next Industrialisation wave, the country is investing in the smart city technologies and next generation wireless connectivity, 5G. The attitude in the republic, does not only stop at development alone. They are willing to share their knowledge with both developed and underdeveloped nations. Perhaps, Malaysia should foster technological ties with Korean companies to transfer skills to Malaysians.

Closer to home, Singapore has been ahead of the technology development game just like the Republic of Korea for similar reasons. According to Singapore’s Economic Development Board, Singapore is enroute to becoming Asia’s digital capital and plans to become the globe’s first Smart Nation. McKinsey’s Global Institute report explains that Singapore’s technological success is due to its methods of attracting global talent, relaxed immigration policies, prestigious universities, largest network of trade agreements in Asia and its billion-dollar R&D initiatives.

Singapore’s billion-dollar research initiatives have attracted the likes of Grab Taxi and Google. Grab Taxi has invested USD$100 million to a local R&D centre. Google, on the other hand, has established its engineering pool, Next Billion Users, in Singapore as it plans to continue to tap into Southeast Asia. In terms of labour force, Singapore has 32,000 research engineers and scientists as of 2015.

Public and private sectors are also responsible for pushing the city state forward in the digital race. The government in 2016, merged the media and the technology departments, to form the Info-Communications Media Development Authority (IMDA). This department is responsible for projects such as providing free wireless broadband throughout the island. This includes hawker centres and bus stands. It is also responsible in laying the foundation for the government’s pursuit to turn the country into a Smart Nation. The private sector on the other hand comprises the likes of IBM, Apple, Twitter and Adobe. IBM opened IBM studios Singapore which has the IBM Interactive Experience (IBM iX). IBM aims to bring digital solutions to start-ups in the city state.

Furthermore, the Lion city has its world class infrastructure to thank for. Whether it is the efficient mass transit system connecting the island or the fast transmission of internet speeds, Singapore has an impressive infrastructure that can attract the right talent pool. For instance, employment company, LinkedIn, opened its first data centre outside the United States in 2016, due to the country’s infrastructure.

Lastly, the attitudes of Singaporeans on keeping an open mind to disruption helps. Like the Korean mindset on adapting to technological change, the leadership in Singapore welcomes tech disruption. Prime Minister Lee Hsien Loong, during the opening of the new Google office, mentioned that “Tech is disruptive and [a technology company’s] objective is to disrupt the world. We expect to be disrupted, but at the same time, we want to make sure we come out on the right side of the disruption, and we depend on [partnerships] with you [technology companies] to help us to do that.” 

Malaysia is not completely far behind. But there is a lot more to be done. Although the current economic situation is of doom and gloom, Malaysia can harness local tech talent to start with. Partnerships with private telecommunication companies and internet providers could be a steppingstone in supporting the internet speed network. We have the local talent, but we need to use that talent wisely.

References

1.     Ramping Up Digital Infrastructure by Lee Heng Guie, Starbizweek, Star Newspaper, 16 May 2020.

2.     How the Republic of Korea Became a World ICT Leader, ITU News, 12 February 2018. (Link: https://news.itu.int/republic-korea-leader-information-communication-technologies/)

3.     Singapore is fast tracking to become Asia’s digital capital, Singapore Economic Development Board, 7 Jun 2017. (Link: https://www.edb.gov.sg/en/news-and-events/insights/innovation/singapore-fast-tracking-to-become-asia-s-digital-capital-.html)