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CxO Perspective: Why PIKOM remains bullish about Digital Malaysia

AvantiKumar | Nov. 27, 2017
As well as forecasting a 5.3% GDP growth for 2017, Malaysia’s National ICT Association, PIKOM, has announced new agreements - with CyberSecurity Malaysia, MATTA, and Fusionex - to help securely boost the national digital economy.

Mou PIKOM and Cybersecurity Malaysia - done

Photo: (From left) PIKOM Councillor Alex Liew, PIKOM Chairman Chin Chee Seong, Minister of Transport Dato' Sri Liow Tiong Lai and Cybersecurity Malaysia Chief Executive Officer Dato' Dr. Haji Amirudin Bin Abdul Wahab.

 

  In addition to forecasting a 5.3 percent GDP (gross domestic product) growth for 2017, Malaysia's National ICT Association, PIKOM, has signed new agreements - with CyberSecurity Malaysia, MATTA, and Fusionex - to help securely boost the national digital economy.

PIKOM chairman at the time, Chin Chee Seong, explained some of the expected outcomes from the signing of the memorandums of agreement (MOUs) during the ninth PIKOM Leadership Summit (PLS) on 23 November 2017.

"These initiatives will certainly help in expanding opportunities for small and medium enterprises SMEs in their respective sectors and we need to keep up and embrace changes in the rapid convergence between the physical and digital world," said Chin.

He added that, "Malaysia needs to keep up and embrace changes in the rapid world of information technology. Just a few years ago, we were at the same PLS summit, where the buzzwords were mobile, social media, cloud. Today, IoT, Industry 4.0, data economy and eCommerce are transforming industry into digital businesses."

Chin said the agreement with Fusionex will equip ICT professionals with the right skills and training in Big Data, in line with the Government's target of achieving 20,000 data professionals by 2020.  (See - MDEC Big Data Week 2016: National goal increases to 18,000 data professionals)

PIKOM's agreement with digital security specialist agency Cybersecurity Malaysia (CSM) is to further increase cybersecurity awareness, while the agreement with the Malaysian Association of Tour and Travel Agents (MATTA) should drive more digital platform adoption by the travel industry in preparation for Visit Malaysia Year in 2020.

A mock cheque presentation was also held at the Summit (see below) with PIKOM and Fusionex each donating RM20,000 to the Malaysian Red Crescent Society (MRCS) in aid of the victims of the recent devastating Penang floods.

MRCS cheque presentation

Photo (from left) PIKOM Chairman Chin Chee Seong, Malaysian Red Crescent Secretary General Dato' Sayed A. Rahman bin Sayed Mohd, Minister of Transport Dato' Seri Liow Tiong Lai, PIKOM Leadership Summit 2017 Organising Chairman and Fusionex Managing Director and Chief Executive Officer Dato' Seri Ivan Teh and Malaysian Red Crescent Logistics and Supplies Officer, Mohammad Faodzi B. Mat Nawi

Intertwining of eCommerce, logistics and retail

"A new era of change is upon us where our nation is rapidly embracing digital economy and implementing Industrial 4.0," noted the minister of Transport, YB Dato' Sri Liow Tiong Lai during the launch of the summit.
 
"I foresee that PIKOM has a vital role to drive Malaysia successfully into the new era," said Liow, singling out some key catalytic initiatives. "eCommerce is the fastest growing facet of trade across the world. We are seeing more and more cross-border eCommerce trading. Malaysia has taken the leadership role in this region to capitalise on the exponential growth of the internet economy. By 2025, Malaysia will handle and move up to US$65 billion worth of goods around the ASEAN region."

"The logistics industry and digital economy are intertwining to form a critical backbone to the supply chain and is playing a major role in stimulating trade and further economic growth," continued the minister.   (Also see - eCommerce Tracker: How PIKOM's new Asean alliance will tap Malaysia's 'incredible growth')

"Cross border logistics is now the life blood of Malaysia supply chain and expected to be more efficient with innovative ICT applications," he said, pointing to the activation of the first phase of the Digital Free Trade Zone (DFTZ) in Malaysia. (See - Malaysia's Digital Free Trade Zone goes live: Here's a Deep Dive on the ROIs)

"Our vision to position Malaysia as the regional e-fulfilment hub for ASEAN consumers has received endorsement from Jack Ma," Liow said. "Cainiao and MAHB [Malaysia Airports Holdings Berhad] will develop a 24-hectare e-fulfilment hub in Phase 2 of DFTZ, which is slated to be operational by 2020."

"ICT can equip SMEs to win opportunities with and to the global market," he said. "No one can imagine that Alibaba was able garnered a sales record of US$25 billion (RM104.86 billion) during its Singles' Day sale. Such a humongous sale, must be accompanied by the ability to deliver the products purchased by the customs within the acceptable delivery window. As many as 60,000 international brands and merchants had joined the promotion event where 167 merchants have generated more than 100 million yuan ($15.1 million) in sales, 17 surpassed 500 million yuan ($75.4 million), and six merchants surpassed 1 billion ($150.9 million)."

(Also see an exclusive with MDEC's vice president, Enterprise Development, Gopi Ganesalingam - Why Malaysian companies must expand into ASEAN's US$48 billion pie: MDEC exclusive)

"By capitalizing on the lucrative eCommerce market, we are targeting to increase our air cargo volume in KLIA [Kuala Lumpur International Airport] by 2.5 million to 3 million tonnes by 2050 from the current 726,000 tonnes," said the minister. "With such a vast increase in the volume of cargo, KLIA can play be an important eCommerce hub for Southeast Asia."

Some local companies have also seen significant growth.  "I noted that the recently-held Single Day's Sale by our eCommerce operators also showed impressive sales," said Liow. "Lazada experienced an 'explosive growth' in Malaysia and across the region, racking up US$23 million (RM96.4 million) in sales through the 6.5 million items ordered by shoppers. I foresee a huge potential for our logistics service providers to perform the last mile delivery."

Collaboration across sectors

Liow also reiterated the importance of collaboration across industry, public and academic sectors in Malaysia. PIKOM's MoUs affirm efforts by lead agencies such as Malaysia Digital Economy Corporation (MDEC), MIMOS, CyberSecurity Malaysia, and NanoMalaysia.

"In today's economic climate, collaboration between organisations remains one of the best strategies to achieve objectives," he said.  "For example, this morning's MoU exchange between PIKOM and the Malaysian Association of Tour and Travel Agents (MATTA) will bring travel and tour agents on-board the digital platform. The Services industry should take the opportunity to market their services online. This is a step in the right direction in embracing digital economy."

Turning to PIKOM's latest edition of its annual industry review, Liow said: "PIKOM's ICT Strategic Review 2017/2018 Report highlights the continuing convergence of the digital and physical worlds, which include Big Data and Digital Transformation. Such a development is a major movement towards the Fourth Industrial Revolution (4IR)."

PIKOM Research Committee chair, Woon Tai Hai, said Strategic Review 2017/2018 contains 11 chapters and a special edition on cybersecurity has also been unveiled.

Woon said the report noted the impact of the convergence of the physical and digital environments, and the resulting disruptions of business models, consumer behaviours, devices, and some traditional brick and mortar jobs.
 
However, PIKOM's report points to a bullish outlook, said Woon.  "PIKOM has forecasted a 5.3 percent GDP growth for 2017, a range of 4.8 to 5 percent in 2018 and 4.5 to 4.8 in 2019. The contribution of the ICT industry to GDP in 2016 was RM224 billion with a year-on-year growth rate of 18.2 percent and PIKOM is hopeful that the 20 percent targeted for 2020 will be achieved in 2017."

 

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