Does the 2020 Malaysian budget invest in the country’s digital economy?
MALAYSIA is in a unique position to win big in the digital economy — and the country’s 2020 budget clearly puts the spotlight on “going digital”.
According to a recent report by Google, Bain, and Temasek, Malaysia’s internet economy has continued to rise at a steady 21 percent annualized rate despite economic headwinds, with e-commerce, online travel, and other digital platforms making quick progress.
To help fuel the growth further, the 2020 budget puts an emphasis on driving economic growth in the new economy and digital era and investing in Malaysians to level up human capital.
The National Fiberisation and Connectivity Plan (NFCP), for example, is expected to bring high-speed internet infrastructure to all of Malaysia, including rural areas.
The government aims to invest MYR21.6 billion (US$5.17 billion) with private partners in the country, through public-private partnerships, to achieve its objective over the next five years.
The NFCP is regarded as a great initiative, as building out the infrastructure to help the country go digital is a fundamental step towards bringing more people into the fold of the digital economy.
To further boost connectivity, the government has decided to invest in developing the 5G ecosystem — and made an allocation of MYR50 million (US$11.96 million) to the cause.
Although some experts believe this is too small an investment, the reality is that any support from the government will be seen positively by the industry, who will be the ones driving investments into building out the 5G ecosystem.
5G is expected to be a critical investment in the future, enabling technologies such as smart manufacturing, virtual reality, drones, and even autonomous vehicles.
The 2020 budget shows that the government not only understands the need for innovation in the new and emerging technologies space but also that several of the new-age projects will rely on better connectivity and infrastructure.
It’s why the country has decided to set up an MYR25 million (US$5.98 million) fund to match investments made in pilot projects such as drone delivery, autonomous vehicle, blockchain technology, as well as other products and services that leverage investments in fiber optics and 5G infrastructure.
The country has a few other aces up its sleeves to facilitate innovation using technology such as a MYR550 million (US$131.59 million) grant matching investments made in automating business processes for up to 1,000 manufacturing and 1,000 services companies, and tax incentives for up to 10 years for electric and electronic companies transitioning into the 5G digital economy and industry 4.0.
However, the reality is that the country is betting large on training and upskilling its workforce for the digital era.
The country has just announced a new Digital Social Responsibility (DSR) program to improve digital skills of the future workforce through initiatives such as technology scholarships, training, and upskilling for digital skills, and has made a series of investments in Technical Vocational Education and Training (TVET) in the country.
In fact, the Government and HRDF will disburse up to MYR40 million (US$9.57 million) to encourage working adults to undertake professional certification examinations in fields relating to Industry 4.0.
The 2020 budget is definitely gearing up to help Malaysia go digital — and business owners and professionals in the country have plenty of incentives to surge ahead with pilots and projects in the coming year.
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