On July 19, 2021, MDEC announced a five-year plan geared towards enhancing Malaysia’s digital economy, Digital Investments Future 5 (DIF5).
This plan is in line with the objectives of the MyDIGITAL blueprint to attract RM70 billion worth of investments by 2025. For five years, this initiative is geared towards:
- Securing RM50 billion in investments;
- Focusing on 5 key industry sectors, 5 focus technologies, 5 emerging technologies, and digital global business services;
- Attracting 50 Fortune500 tech companies to land and expand in Malaysia;
- Establishing 5 unicorns; and
- Creating 50,000 high-value jobs in MSC Malaysia (formerly known as the Multimedia Super Corridor).
Focusing on 5 key industry sectors:
In other words, agritech (agriculture + technology). It’s the use of scientific techniques to enhance the agriculture sector such as using automated irrigation systems to reduce labour when farming.
As of the latest Department of Statistics Malaysia (DOSM) report in 2019, the agriculture sector is the third-highest GDP contributor (7.1%, which is RM101.5 billion) to the country, standing next to the mining and quarrying sector.
The global agriculture industry was worth over US$9.6 trillion in 2020. Despite the pandemic, the industry is also expected to increase with a compound annual growth rate of 6% in 2021, a collaborative report by Deloitte and MaGIC shared.
With the MoU contributing to the growing use of technology in agriculture, it’s estimated that there will be a 30% increase in job opportunities created by 2025 in this sector, including the youth.
They’re technology like AI, medical devices, IT systems, algorithms, cloud and blockchain, etc. designed to support the healthcare industry.
By 2027, our local healthcare sector is forecasted to grow to RM127 billion. Moreover, over 90% of locally-manufactured medical devices are exported, and Malaysia supplies 60% of the world market for medical gloves and 80% for catheters. In fact, the global market for this sector alone in healthcare is expected to reach US$33 billion in 2021.
3) Islamic Digital Economy (IDE) and FinTech
The IDE is a catalyst for Islamic finance and the halal industry. Islamic FinTech includes insuretech/Takaful, and Islamic social finance like zakat, waqaf, etc.
Global Islamic finance assets are projected to grow close to US$4 trillion by 2024, and locally, FIKRA Islamic Fintech Accelerator Programme already plans to nurture hopeful startups in this sector.
Malaysia has a strong footing in Islamic fintech, boasting the most number of providers in the world and a ranking of being the number one Islamic economy globally by the State of the Global Islamic Economy Report 2020/2021.
It is synonymous with green technology, which includes renewable energy sources, new methods of recycling, and other technologies used to improve environmental sustainability. Globally, this industry is forecasted to generate a revenue of US$57.8 billion in 2030.
Malaysia has also pledged to reduce its greenhouse gas emissions by 45% in relation to the country’s 2005 gross domestic product under the Paris Agreement in 2016, hence the urgency for public and private sectors to get more involved.
EduTech refers to the implementation of technologies for educational purposes, inside and outside of the physical classroom. It’s a sector that’s seen the growth of various educational apps, sites for online classes, and more.
By 2025, the global edutech market will reach US$404 billion in total expenditure, market intelligence HolonIQ shared. Locally, Malaysia’s e-learning market was already seeing a compound annual growth rate (CAGR) of 16.4% in 2019.
The Malaysian online learning market is now expected to exceed US$2 billion by 2023, thanks to the rising demand of edutech, smart classes, etc, particularly during the pandemic.
The 5 focus technologies to aid the sectors’ growth:
- Cloud computing: The delivery of different services through the Internet like data storage, servers, databases, networking, and software. A popular example of cloud computing that most of us use is Google Drive.
- Data centre: A physical facility that organisations use to house their critical applications and data, and they look almost like shelves in a library.
- Artificial intelligence: Technologies that mimic the problem-solving and decision-making capabilities of the human mind.
- Cybersecurity: The protection of networks, devices, and data from unauthorised access or criminal use and the practice of ensuring confidentiality, integrity, and availability of information.
- Digital content tools: Sites and programmes used in the creation or consumption of digital content.
Growing 5 emerging technologies:
- Blockchain: A decentralised ledger of all transactions across a peer-to-peer network.
- DroneTech: Technology that powers unmanned aircraft that are remotely or autonomously controlled using built-in software.
- Edge computing: A distributed computing framework that brings enterprise applications closer to data sources such as IoT devices or local edge servers.
- Extended reality: Also known as XR, which is the umbrella term for virtual reality (VR), augmented reality (AR), and mixed reality (MR)—basically all things virtual environment-related.
- Advanced robotics: Unlike conventional robotics which you may have run into in your school days, advanced robotics are able to act autonomously.
According to MDEC, these will “increase the economic complexity of the nation and help develop new and existing economic clusters which in turn creates high-value job opportunities and extended domestic economic links”, which is in line with Malaysia’s National Investment Aspirations (NIA).
Moreover, besides contributing to the national digital economy plan we have, these technologies will also tie in with MDEC’s upcoming Global Testbed Initiative, which will enable Malaysia to be a testbed for up-and-coming technology investments.
Additionally, they will be developing the nation’s intellectual property and talent pool in future technologies as this initiative will collaborate with institutes of higher learning and think tanks.
The bigger picture
Besides developing and attracting new technologies for the DIF5, MDEC will be also be increasing efforts to grow the Digital Global Business Services. This is so they can promote the use of robotic process automation and data analytics as well as Knowledge Engineering.
Dictionary Time: Knowledge Engineering is a field of artificial intelligence (AI) that develops rules that are applied to data in order to imitate the thought process of a human that is an expert on a specific topic.
To kickstart DIF5, MDEC brought back Malaysia Tech Month for 2021 (which debuted last year) on July 29, 2021, and this virtual event entails workshops, discussion panels, and business-matching sessions which are all free to attend.
- You can learn more about MDEC’s DIF5 Strategy here.
- You can read more MyDIGITAL articles we’ve written here.
Featured Image Credit: Open Gov Asia (left) and Surina Shukri, CEO of MDEC (right)