Why Digital Transformation Forms The Backbone Of Malaysia’s Economic Recovery

By KT Ong, Country Manager – Malaysia, Dell Technologies.

As global governments seek to lead the way in building back stronger, more resilient and interconnected economies, facilitating accelerated digitalisation for business will be mission critical. The pace of evolution as necessitated by the events of 2020 provided a glimpse of what is possible – we now stand at a critical juncture, with the available tools to truly revitalise and reimagine vital industries.

The building blocks laid today must supplement and support the ability to ‘work from anywhere’, empower data innovation, and realise the mass potential of multi-cloud flexibility. The opportunity to deliver a digital-first recovery and build a pathway towards the future of work is here. Technology stands poised and ready to meet these ambitious objectives.

Understanding the DNA of local economies is key to the enablement and provision of optimum support for what is an increasingly diverse business environment, spanning large entities as well as small and medium enterprises (SMEs). According to the World Bank, formal SMEs contribute up to 40% of national income (GDP) in emerging economies – and these numbers are significantly higher when informal SMEs are included. It is fair to say they are the backbone of the global economy. Malaysia is no different – SMEs account for 98.5% of businesses and employ around 66% of the workforce, forming a critical facet of our economic ecosystem.

Traditionally, smaller businesses have been slower to digitise than larger counterparts, however, according to the OECD, 70% of SMEs significantly intensified their use of digital technologies due to 2020’s global crisis. That said, it is not surprising to hear of SMEs concerned about having enough resources to “keep the lights on” in the business before they would even think about digitalisation. To help alleviate the burden on local businesses during this time, the government has provided a number of support measures for SMEs to help cushion the economic impact – to the tune of RM2.1 billion under the “Pemerkasa Plus” stimulus package so digitalisation efforts are not totally off the table. It is vitally important that this segment of the economy is supported in its quest to thrive in the digital era – and this means matching their ambitions with speedy, connected and personalised services.

The same is true for large businesses which are often motivated by a desire to improve or expand existing technologies when determining locations for Foreign Direct Investment (FDI)3. With access to tech a key driver in attracting global FDI, digital transformation will prove to be a key determinant in laying the infrastructure to sustain and enable economic growth in the future3. With the share of FDI stock in global GDP increasing from 22% to 35% between 2000 and 2019, it is imperative that digital infrastructure can meet growing demand and support evolving economies in the years ahead.

Building an environment for businesses to thrive

Context is everything. For a business of any size to thrive it must exist within an environment that supports its growth, as survival is about more than individual resources or capabilities. Malaysia Digital Economy Corporation (MDEC) has embarked on a mission to establish Malaysia as the “Heart of Digital Asean” – a regional digital powerhouse and industry trailblazer.

That journey however begins at home, where the agency is focused on driving economic recovery by preparing the nation for a digital-first environment. When we examine the future of work, we can see that professions such as healthcare workers, software developers, and green energy professionals will be in great demand, with technology underpinning the foundations of all these jobs.

It is critical that the digital foundations to enable these professions to flourish and meet their full potential are in place, and accessible in all locations. As sectors such as science, sustainability and manufacturing progress, so too must the infrastructures which enable their evolution.

There are a variety of steps to take on this journey towards a thriving and interconnected digital ecosystem. Through transforming procurement processes with the provision of transparent and easy-to-use digital portals on hybrid cloud applications, modern high-growth industries can be empowered while becoming resilient to cyberattacks. Streamlining these processes will future-proof, protect and boost accessibility to essential procurement services, which are already an essential part of many global business operations.

The prioritisation of digital transformations to boost efficiencies in supply chains and establish eCommerce platforms with the provision of end-to-end customer experience will also be imperative, with 5G and edge computing infrastructure key.
As product-led businesses evolve and pivot towards a digital-first economy, the framework to support their business journey must be central to any future vision. Realising this digital-first aspiration has never been more evident following the pandemic which has massively disrupted economies globally.

Malaysia recognises the significance of this – the launch of the Malaysia Digital Economy Blueprint is key to driving new engines of economic growth to ensure that the country is not left behind.

We know that economic recovery requires a nuanced approach with both long-term and short-term strategies. Reinforcing the private sector with digital infrastructure will provide fertile ground for increased innovation and support continued transformation across all industries. As the largest subset of business, SME needs must be at the heart of any digital strategy. Amazing work is already being done by governments around the world to support vital business sectors – and with a reinvigorated sense of purpose, we are well positioned to build back better societies and economies for good.

Levelling the playing field and turbocharging digitalisation for businesses will not only boost SMEs and larger employers who rely on rapid connectivity and communications, but also the communities they serve. If harnessed effectively, technology can be an enabler and an equaliser, supporting new and agile ways of working, customer interaction, and data innovation. It can facilitate growth potential right across the board and create a better future with an infrastructure to serve all of us.

An article by BusinessToday – 
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