Here’s how Red Hat is helping Malaysia in its digital economy

• Malaysia’s digital economy is one of the fastest growing in the APAC region.
• Red Hat is hoping to help Malaysia overcome hurdles and roadblocks in their digitalization journey.  
• Red Hat is also helping Malaysian businesses reskill and upskill employees. 

The digital economy in Southeast Asia is expected to be worth US$ 1 trillion by 2030, according to a report by Google, Temasek and Bain & Company. While Indonesia is expected to be the biggest contributor to achieving this, the other countries in the region are also expected to support the growth.

In a report by CNBC, six countries within the ASEAN block, comprising Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, are projected to grow 6% annually. While the path has been set, the ASEAN 6 countries still have several hurdles and roadblocks that they will need to overcome.

Looking specifically at Malaysia, the country’s digital economy growth remains positive, contributing 22.6% to GDP, and is expected to rise to 25.5% by 2025. Yet, the nation still needs to over hurdles such as using the right technology as well as having a sufficient, skilled workforce.

While there are numerous technology providers in the region partnering with businesses and organizations in their digital transformation journey, the lack of skills remains a roadblock for many. Growing the digital economy can be challenging if these issues are not addressed, especially given the competition between the ASEAN 6 countries in developing and hiring talents.

Singapore remains a popular destination for tech talents, given the strength of the currency. But other countries in the region are aware of this and are working to provide better opportunities not just for talent, but for businesses as well.

As such, in the first half of 2023 alone, Malaysia has made significant strides towards its digital economy goals through various government initiatives, and up-and-coming foreign investments.

As part of this, the government is currently focused on transforming the public sector, increasing the competitiveness and resilience of Malaysian SMBs, and promoting the country as a strategic destination for quality investments through the enhancement of digital adoption across industries.

Following this trajectory, the term “Asian Digital Tiger” has been used by Malaysia’s Communications and Digital Minister Fahmi Fadzil in reference to the country’s potential to be a leader in the digital economy in Asia, to drive growth and innovation in the region. To achieve this, Malaysian businesses should understand that there is a collective responsibility to help the country develop an ecosystem that includes strong digital infrastructure, supportive policies, and a skilled workforce.

Embracing digital disruption for the benefit of the economy

According to Tammy Tan, country manager of Red Hat Malaysia, Malaysia’s digital transformation continues to evolve and expand, with new opportunities and challenges emerging in equal measure. According to 2022 data by IDC, a high proportion of organizations in Asia-Pacific overall are still lagging in digital agility.

In 2 years, 18% of APAC organizations have made the leap to become agility leaders, where technology adoption is integrated and guided by an enterprise strategy and roadmap. However, the majority are still lagging in digital agility with 62% in the slow or tactical stages (i.e., agility followers).

Looking forward, Tan believes it is now an opportune time for leaders across their respective industries to shift their mindsets to view technology adoption as not just an added cost, but a business driver that can reshape IT and operational gaps, and support digital transformation.

“At Red Hat, we have seen a diverse range of organizations and enterprises across industries in the region undergo transformation by automating manual processes, in order to free up human capital for more strategic and innovative tasks. A good example is Malaysia’s Petronas Dagangan (PDB), a subsidiary of Petronas, which faced challenges in reducing errors for software processes such as patching and configuration management at its 1,076 petrol stations. With Red Hat, PDB was able to automate its IT operations and run timely patch updates, which led to increased efficiency, scalability, and security,” said Tan.

Another example highlighted by Tan was Red Hat’s partnership with Bank Muamalat Malaysia Berhad. A pioneer in Islamic banking with 68 branches nationwide, the bank worked with Red Hat to adapt to the evolving fintech landscape. To better meet market demands, the bank created a cloud-native platform that facilitates seamless interaction between software applications and provides access to third-party services. This transformation has positioned Bank Muamalat at the forefront of innovation, ensuring they remain competitive and agile in the digital banking landscape.

Increasing competitiveness starts with the right skills

While skills shortage remains a global problem, most countries in the region continue to train and upskill their current workforce to meet the demands. At the same time, some organizations are collaborating with tech companies and universities to produce skills that can fill the gap.

Tan explained that amid a rapidly evolving and competitive business environment, organizations must carefully evaluate their preparedness for transformation, which involves considerations in their workforce capabilities.

“With the emergence of cutting-edge technologies, investing in adequate training should be a priority. This is in line with the Malaysian government’s goal to reach its RM70 billion target for digital investments, while also encouraging multinational corporations and organizations to further invest in upskilling, reskilling and cross-skilling. For 2023 and beyond, it is time to consider models that not only include investing in digital solutions but also in training and skilling to support greater productivity amid ongoing disruption and evolving industry needs,” added Tan.

Tan said that Red Hat holds itself to the principle of fostering a culture of learning and growth. As such, the company gives employees opportunities to upskill and reskill, and also expands the open learning culture to its customers and partners through various learning resources such as courses, workshops, certifications, and residency programs like Red Hat Open Innovation Labs.

“Ambank Group, a leading financial services group, engaged Red Hat Open Innovation Labs for a five-week program to learn how to successfully adopt open source practices and Red Hat technologies to maintain its competitive edge, reducing the complexity of processes and automating tasks such as onboarding, minimizing visits to physical branches, and ultimately improving overall business agility,” mentioned Tan.

With digital skill investments of paramount importance today, Tan also highlighted the role of the Red Hat Academy in providing open-source training and certifications. The open learning initiative partners with academic institutions by equipping individuals and organizations with the necessary skills to thrive in the digital landscape.

“We lay the foundation for a brighter future filled with innovation. This surge of innovation not only benefits businesses but can also contribute to the overall growth and prosperity of Malaysia, positioning it as a dynamic hub of technological advancement. This is also the intention behind our latest strategic collaboration with APU in accelerating open-source education. This collaboration could have a multiplier effect on knowledge-sharing and solving real-world problems – providing opportunities for individuals to acquire in-demand digital skills,” said Tan.

Accelerating the future of Malaysia with digital transformation

With the government making clear its ambition to convert Malaysia’s digital economy’s GDP contribution to 25.5% by 2025, there is a big task ahead for all participants in the technology ecosystem – whether it be private organizations, the public sector, tech partners, students, academics, or other players.

Tan believes that there continues to be great progress towards digital upskilling and embracing open source technologies to date, as Red Hat’s customers and partners across various sectors have taken up the reins to pilot hybrid cloud and open source to achieve their business goals.

These are practical examples of how digital transformation is taking place in Malaysia, and supporting the country’s national objectives by broadening access, accelerating development of new applications, and supporting professional development – all through technology.

“Through our dedicated efforts in digital upskilling and training across our customers, partners, and employees, our ultimate goal is to unleash the full potential of the cloud, enable accelerated business growth, foster innovation, and boost productivity – in line with Malaysia’s goal of achieving the ‘Asian Digital Tiger’ status,” said Tan.

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