Opportunities in digital there to be seized, speed is of essence: Page 3 of 3
By Karamjit Singh August 14, 2017
Azwan: What are biggest trends in digital for Malaysia and how do you see corporates needing to respond?
Madius: I think they are responding and mainly because everyone is looking to be more productive and digital definitely helps here. Even my ministry is focused on the future. We know we must be driven by technology with a focus on STEM (Science, Technology, Engineering, Math) and talent development. We are looking at how we can help drive the New Economy in Malaysia using innovation, using technology because we feel change from the Digital Economy will happen faster than we think and there will be job losses.
And coming back to a point I made earlier, we are starting by getting internal buy-in first before we push this out externally.
Azwan: Sharil, do you feel Malaysian companies, its GLCs are moving fast enough to adopt digital?
Shahril: I think Malaysian corporates are a bit slow in understanding the amount of disruption coming their way. Many sectors are protected by licensing and APs (Applied Permits) and we are periphery to the global giants wanting to come in. But, at the same time we are seeing disruption coming in. Ride sharing is the clear example. Once one guy starts, globally the other competitors have to come in. In Malaysia, Grab started in end 2011, then Uber came in or it risked losing a potential key market to a competitor.
I think will see same thing in retail. Now that Alibaba is in via Lazada, Amazon has no choice but to enter the market. Before long will see a big Amazon presence in SEA otherwise they are effectively surrendering the market to Alibaba. That will disrupt retail. The competition between them will give consumers better deals and accelerate the hollowing out of existing businesses. [Note: The discussion took place before Amazon’s entry into Singapore was made public.]
In this vein, I think banking will be an interesting space as well. Once a major player makes a move, other players will be forced to come in. Sure regulation is there but some parts are not regulated. Example being P2P lending, P2P payments, foreign exchange transfers. You can play within the rules and offer better, different services or be more aggressive and stretch the rules a bit. It is just a matter of how soon a global player wants the Malaysian market.
Azwan: In terms of the role of government, is there any new initiative you are undertaking?
Madius: Well the Digital Free Trade Zones are an example. I think this initiative will catalyse the whole process of change and drive home the realization that digital disruption is happening.
Somehow we have to make it happen. Things are changing so fast that we better be prepared to seize the opportunities rather than be fearful of the threats. Which is why, for us, other than the governance question, talent is a big part of the equation. What happens when job loss due to automation is upon us?
One way of tackling this is to get our universities prepared by getting their curriculum updated for the needs of Industry4.0.
Azwan: Governments can play a strategic role to increase the country’s competitiveness in this era of digital transformation. What do you think is the role of government in enabling digital innovation?
Azmil: Definitely governments have a role to play. Yet we also see them struggling to keep up. But if Malaysia does it right, we can help things along. The idea is to build your disruptive digital companies in Malaysia but for that we need the right attitude, relevant skills sets and world class infrastructure. If we don’t get there, our neighbours will. But I believe digital is a great opportunity for Malaysia but we need to do more!
Shahril: I think their key role should be to regulate a fair playing field that allows newcomers and existing players to compete. They should also enforce the rules fairly and remove barriers to adoption. You do not want to create a digital monopoly as consumers suffer then. And I think the example of ride sharing shows that the government is quite supportive of digital players and are not averse to dropping barriers despite the protests of the traditional players.