Malaysia continues to draw strong ICT investments: MDEC

• MSC Malaysia companies’ 2015 revenue up 9% from 2014
• Total investments inflow stood at US$5bil

 
MALAYSIA’S national ICT custodian Malaysia Digital Economy Corporation (MDEC) is confident that Malaysia will continue to be an attractive investment destination for foreign and domestic companies.
 
“2016 will continue to be a challenging year but even local companies are realising the potential of digital and ICT for their businesses,” said MDEC chief executive officer Yasmin Mahmood (pic above).
 
“Hence, we feel good about the momentum although it has been less than four months into 2016,” she told a media briefing in Kuala Lumpur on April 11, which also happened to be the agency’s 20th anniversary.
 
MDEC was formerly known as Multimedia Development Corporation or MDeC (or MDC when it was first formed).
 
It manages the Multimedia Super Corridor (MSC Malaysia) project, which seeks to boost the ICT sector in the country; and is also the lead agency for the Digital Malaysia programme, which seeks to transform Malaysia into a ‘digital economy.’
 
The name change reflects its increasing focus on growing the national digital economy contribution to Malaysia’s total gross domestic product (GDP), the agency said in an official statement.
 
Despite 2015 being a challenging year for the global economy, MSC Malaysia saw a high increase in terms of investments from MSC Malaysia companies, according to Yasmin.
 
Last year, MSC Malaysia saw RM19.8 billion (US$5.09 billion) in new investments, with RM15.2 billion (US$3.91 billion) coming from existing investors, while RM4.57 billion (US$1.18 billion) came from new investors – the highest since its establishment in 1996.
 
Of the new investments, 87% came from foreign direct investments while the rest were via direct domestic investments.
 
“This is a testimony to the fact that Malaysia is being recognised as an attractive investment destination,” declared Yasmin, adding that Malaysia remains in the top three of A.T. Kearney’s Global Locations Index for the 12th consecutive year.
 
MSC Malaysia is divided into four ‘clusters.’ In terms of investments, the Creative Content and Technologies (formerly Creative Multimedia) cluster attracted RM230 million; the Higher Learning and Incubators cluster attracted RM70 million; the InfoTech cluster attracted RM1.64 billion; and the Global Business Services (GBS) cluster attracted RM2.64 billion.
 
[RM1 = US$0.26 at current rates]
 
‘Strong’ growth in 2015
 

 
In 2015, MSC Malaysia companies reported total revenue of RM42.1 billion, up 9% from 2014, slightly lower than the 11% growth in 2014 over 2013 but still higher than the 3% and 5% growth in 2012 and 2013, respectively.
 
The Creative Content and Technologies cluster generated RM7.24 billion in revenue; Higher Learning and Incubators generated RM1.56 billion; InfoTech generated RM16.47 billion; and GBS generated RM16.83 billion.
 
MSC Malaysia also recorded RM16.2 billion in export sales, representing an 18% increase over 2014, and contributing RM15.3 billion to the national Gross Domestic Product (GDP), up 11% from 2014.
 
“The GBS cluster contributed the most (69%) to the overall export sales. We are also proud to share this is the highest increase in overall export sales since 2010,” said Yasmin.
 
The four focus areas of MDEC – the Internet of Things (IoT); cloud and data centres; big data analytics (BDA); and e-commerce – contributed about 10% (RM1.65 billion) of total export sales in 2015.
 
“These focus areas are extremely important to us because they are the ones driving innovation in Malaysia,” said Yasmin.
 
“In 2015, investments into these four areas grew by five times. And we will continue this momentum to attract investments from companies with cutting-edge technologies in these areas,” she added, without giving specifics.
 
Meanwhile, the animation sector recorded a 52% growth in exports sales.
 
Talent shortage
 
A total of 10,981 new jobs were created in MSC Malaysia last year, a 16% jump from 2014, bringing the total number of jobs in 2015 to 158,549. Of these jobs, 87% comprised Malaysian knowledge workers.
 
“These are high-income jobs that are more than 2.5 times’ the national average,” said Yasmin, adding that the average salary of these high-income jobs is about RM6,000.
 
She however admitted that the talent pool remains a challenge for MSC Malaysia, with the country as a whole experiencing an IT talent shortage.
 
“For the next few years the shortage will come up to about 17,000. It is very important that we encourage the younger generation to venture into IT-related fields,” she said.
 
Digital inclusivity
 
Yasmin said that seven local MSC Malaysia companies crossed the RM100-million revenue mark under its Global Acceleration and Innovation Network (GAIN) programme, which aims to help local MSC Malaysia companies go global.
 
“For 2016, GAIN will create another six companies that cross the RM100-million (US$25.7-million) revenue mark,” she added, declining to identify the seven companies above.
 
MDEC will also continue its efforts to build local technology ‘champions,’ with big data analytics company Fusionex and financial solutions provider Silverlake Axis cited as examples.
 
The founders of both companies are inaugural DNA Digerati50.
 
“Globalisation is very important. For local companies to become big, they have to go global,” said Yasmin.
 
Two more areas that MDEC will focus on in 2016 are “catalysing digital innovation ecosystems” – such as BDA, the IoT and e-commerce – and increasing “digital inclusivity.”
 
“The digital economy has the ability to impact every aspect of society, and it is very important that we have an inclusive agenda when it comes to growing the digital economy,” she said.
 
“We want every single Malaysian citizen, including the ones who live in villages, to embrace the digital economy,” she said.
 
Citing its programmes such as eUsahawan and eRezeki, Yasmin said MDEC will scale both in 2016.
 
The two programmes are targeted at the Bottom 40 (B40) group, or those in the lower 40% of the income pyramid.
 
“There is a strong mandate by the Government to scale both these programmes as widely as possible,” said Yasmin.
 
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