Selangor takes it to the next level with Sidec
By Karamjit Singh May 25, 2021
- Aims to be leading Smart State in SEA by 2025
- Will require strong ecosystem, collaborating together
Taking it to the next level is how best to describe what the Selangor State Government is doing in its efforts to help businesses in the state strengthen their competitiveness.
And it’s all through the adoption of technology and digitalisation which the state is driving with the recent incorporation of the Selangor Information Technology & Digital Economy Corporation (Sidec) as a state GLC (government linked company) with Yong Kai Ping, as CEO.
Teng Chang Khim, State Executive Councillor for Industry and Trade recaps the journey.
“We started by launching the Selangor Information Technology and E-commerce Council (Sitec) in 2015 which focused on capacity building for brick-and-mortar merchants through various e-commerce training programmes.” (Sitec staff were absorbed into Sidec)
E-commerce was not as popular then as it is today, but the state government felt it was going to be an important aspect of doing business, hence the focus.
With an annual budget of RM3 million, Teng points out that 650 merchants have been trained in various aspects of doing business through e-commerce.
Add to this, more than 9,000 individuals have learned to make online sales through its E-Commerce Class, Master Class, Online 100 and Brands 100 programmes.
The onset of the pandemic in March 2020 and the shock this delivered to small and micro businesses that depend on face to face transactions also triggered the state government to accelerate its e-commerce drive to the merchant community, both small and micro SMEs, through the introduction of its e-Bazar series of voucher promotions.
It worked better than expected.
“We allocated RM5 million for this, yet it resulted in RM79 million in direct sales,” Teng said. Even more impressive was the multiplier effect from this initiative which is estimated at RM2.003 billion throughout the value chain.
“There were even some merchants who saw sales shoot up from RM2,000-RM3,000 a month to RM12,000 to RM30,000 thanks to the e-vouchers we launched,” said Teng.
This success in turn helped motivate more merchants, who previously didn’t feel they needed it, to adopt e-commerce.
But the state did not get carried away by this success. Having been involved in helping its SMEs adopt e-commerce since 2015, the state government also knew that just adding an online sales channel was not enough to strengthen the competitiveness of its SME community.
“The broader picture is the digital economy. E-commerce is just one part of the picture,” Teng points out.
This broader strategy started taking shape in 2018 with the launch of the Selangor Accelerator Programme which focuses on picking promising startups from Selangor and giving them the support to accelerate their growth.
90 startups have gone through the programme from three batches which included a 2019 visit to the Alibaba Campus in China and with a small group even taken on a trip to the Silicon Valley in early 2020 before the pandemic hit.
This broader focus on the Digital Economy has now taken yet another step forward with the incorporation of Sidec with a mission of further driving adoption of the digital economy in the state through focusing on the business community, which includes startups.
“We know that everything in a business has to be digitised for it to be competitive,” notes Teng.
This is where its recently introduced RM5 million Selangor SME Digitalisation Matching Grant comes into the picture.
To further spur the digitalisation of SMEs, a 50% matching grant or a maximum of RM5,000 is being offered to SMEs that subscribe to an accredited digital service provider, of which there are 100 such companies approved by the state government.
Expected to benefit 1,000 Selangor-based SMEs, the matching grant is specifically targeted at five areas of business – E-Commerce, HR and Payroll System, Cloud Accounting, Digital Marketing and Electronic Point of Sale (E-PoS) System and Payment Gateway.
SMEs may choose to subscribe to up to three of these services. Details can be obtained here with the application deadline on 15 June.
Bold vision, bolder target for Sidec
Teng’s vision for Sidec is bold.
“We want to see Sidec become the leading government agency at all levels in driving digitalisation and innovation.”
The stated target is bolder.
“We want to see Selangor become the leading smart state in Southeast Asia.”
And, pointing to the recently announced MyDigital blueprint, he shares that one of Sidec’s target is to help create unicorns. Well, at least one.
But the state government knows it cannot achieve this on its own.
“This will require a strong ecosystem, collaborating together,” says Yong, adding that expanding the ecosystem and strengthening the links between the various parties, including federal and state agencies, angel clubs, venture capitalists and various business groups, will be a key principle of how Sidec operates.
“Just look at the MyDigital roadmap and its ambitous targets. You cannot just leave it to the Federal Government to drive this forward.”
He acknowledges that State Governments need to do more and increase their commitments driving digital adoption and supporting startups.
“At Sidec, we also need to pull in the private sector and this is why we are working with the Malaysian Business Angels Network (MBAN).”
Sidec plans to leverage the existing investor education initiatives driven by MBAN and encourage business owners from large and mid-sized companies to attend the sessions to open their minds to investing in software assets instead of the typical property investment.
In fact he is ambitiously hoping that Sidec can help change society’s thinking. Explaining what he means, he points out that society is very comfortable to spend RM20 million for an overhead bridge, “but when you talk about spending RM20 million for digital programmes, they are still not used to it and there is hesitancy.”
With an increased allocation of RM365 million from the State Development Fund for 2021 allocated to Digital Economy initiatives, a 33% rise over 2000, no one can say Selangor is not doing its part.
Apart from the new SME digitalisation grant, there is also a proposed Selangor Innovation Ecosystem Alliance, a new initiative with experienced company builders, serial entrepreneurs and investors to create market-leading companies that will rise as Southeast Asia’s tech icons.
As Yong states, “We want to create high-impact entrepreneurs as highlighted in the World Economic Forum report - “The Bold Ones” - by applying entrepreneurial and operational experience from our ecosystem partners to accelerate company building.
Both Teng and Yong will have their hands full in achieving the mission of Sidec but one suspects they are relishing the challenge of uplifting Selangor and its companies into becoming digital economy leaders.