MDeC bullish on attracting investments in 2015
By Goh Thean Eu May 12, 2015
- MSC Malaysia 2014 revenue up 11% compared with 3% growth in 2013
- Planting seeds for new areas for growth, and out to create global heroes
MALAYSIA’S national ICT custodian Multimedia Development Corporation (MDeC) is bullish on the technology sector’s investment climate for this year, saying that foreign and domestic companies continue to show interest in setting up or expanding their presence in the country.
“We feel very good about the investment figures for 2015,” MDeC chief executive officer Yasmin Mahmood told a media conference in Kuala Lumpur on May 11.
However, she did not provide any figures on how much investments the ICT sector has attracted so far this year.
MDeC 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.’
READ ALSO: MDeC announces ‘MSC Malaysia for Startups,’ support from MaGIC
“In the Global Business Services (GBS) cluster [which includes outsourcing], we continue to be in the top three of A.T. Kearney’s Global Locations Index [for the 11th consecutive year],” Yasmin said.
“Even if you look at other benchmarks as well, we are always in the top five. So in the area of being an investment destination, yes, we have achieved global leadership,” she declared at the media briefing on MSC Malaysia’s 2014 performance.
Last year, MSC Malaysia saw RM20.09 billion (US$5.57 billion) in new investments, of which 22% came from direct domestic investments and 45% via foreign direct investments, MDeC said.
Of the new investments, RM17.16 billion was from current investors while RM2.93 billion was from new investors. [RM1 = US$0.28]
Yasmin described the RM17.16 billion worth of investments by existing investors as “a further testament” to investor confidence in Malaysia.
MSC Malaysia is divided into four ‘clusters.’ In terms of investments, the Creative Multimedia cluster attracted RM512.17 million, the Higher Learning and Incubators cluster attracted RM30.31 million, the InfoTech cluster attracted RM1.31 billion, while the GBS cluster attracted RM1.08 billion.
‘Stellar’ 2014 performance
During 2014, MSC Malaysia ICT companies reported total revenue of RM38.52 billion, representing an 11% growth against 2013, and also significantly higher than the 3% growth and 5% growth recorded in 2012 and 2013, respectively.
“Overall, MSC Malaysia has seen a solid performance and consistent growth in 2014,” said Yasmin.
In terms of revenue performance by clusters, Creative Multimedia generated RM7.09 billion, Higher Learning and Incubators generated RM1.53 billion, InfoTech generated RM15.99 billion, and GBS registered RM13.9 billion.
MDeC chief operating officer Ng Wan Peng said that the big jump in revenue “did not happen by chance,” with MDeC playing an active role in helping a number of companies grow their business.
“We put in a lot of effort. It’s not that we did not put in any effort [on growing MSC Malaysia revenue] in the past, but perhaps the focus was more on bringing in investments.
“To help local companies grow their export revenue, we take part in a lot of business missions, we work with them to help them to generate export growth. We take some companies and link them up with potential partners,” said Ng.
“Some of them may need market access, while some may need access to talent ... so we try to help them as much as possible,” she added.
2015 and beyond
While Yasmin (pic) is optimistic that MSC Malaysia will to continue to grow its revenue this year, she said her focus now is more on helping MSC Malaysia achieve sustainable growth in the medium- to long-term.
“In terms of revenue growth, we can’t just rely on our traditional strengths.
“Instead, we need to put in the seeds for new areas for growth. These new growth areas include big data analytics (BDA) and the Internet of Things (IoT).
“Even in the GBS area, there is potential for going up the value chain, such as legal and healthcare,” she said. “In the ICT world, we have to plan three years ahead.”
When it comes to BDA, MDeC launched the National BDA Innovative Network earlier this year, which is aimed at transforming Malaysia into a South-East Asian BDA hub.
The initiative involves partnerships between the private and public sectors to create a “critical mass of resources” to drive BDA adoption and innovation.
According to Yasmin, planting the seeds for future revenue growth is one of the three main strategies MDeC has for 2015.
“The second area we are looking at this year is to create more ‘global heroes.’ It’s not that we don’t have any global heroes, it’s just that we need many more of them,” she said.
She cited as examples Silverlake Axis founder Goh Peng Ooi; MOL Global founder Ganesh Kumar Bangah; Fusionex founder Ivan Teh; and IFCA MSC founder Yong Keang Cheun . The first three are also Digital News Asia Digerati50.
To increase the number of global heroes, MDeC will conduct “aggressive, customised intervention” for selected companies so that they can expand their market presence and revenue, according to Ng (pic).
“For example, if we have a business mission, we will do a ‘buyer fly-in.’ We know about the opportunities available, and we will shortlist the [MSC Malaysia] companies based on the [buyer’s] requirements and also identify the group of companies that can benefit,” she said.
The third area MDeC is looking at is to grow the talent pool in Malaysia. Yasmin said that “good progress” has been made, but there is plenty of room for improvement.
“If you look at the jobs creation that can be derived from the big companies, from the foreign investors especially, we can easily double that ... but the issue is the supply,” she said.
In 2014, MSC Malaysia companies saw a 7% rise in employment with 9,497 net jobs created, increasing the total employment pool of MSC Malaysia to 147,568.
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