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Drive towards digital economy

Drive towards digital economy

27 Nov 2021

Funding under Budget 2022 will help businesses tap new opportunities

WITH huge potential still untapped in the digital space, the Malaysia Digital Economy Corp (MDEC) is doubling down on efforts to help SMES transition to the digital economy. And MDEC chief executive officer Mahadhir Aziz is pleased that the government has shown continued commitment in this regard with substantial funding provided under next year’s budget.

This includes an injection of Rm250mil to MDEC’S Shop Malaysia Online and Go-ecommerce Onboarding campaigns, which has impacted more than 500,000 local entrepreneurs since its introduction in 2020.

Additionally, there is also a further allocation of Rm100mil for the Smart Automation Grant (SAG) for services and manufacturing companies to help them further automate their operations.

Mahadhir notes that the measures announced in Budget 2022 is a clear indicator of the government’s focus on the digital economy as the country gears up for economic recovery following the effects of the Covid-19 pandemic.

“Budget 2022 has clearly indicated the importance of the digital economy in driving economic recovery in the short-term and eventually contributing 25.5% of gross domestic product by 2025.

“MDEC stands with the government and is committed to Budget 2022’s focus towards the recovery, resilience and reform of Malaysia. We will ensure that we deliver on the trust and mandate placed upon us to improve the livelihoods of people,” he says.

Mahadhir adds that many of its schemes offered are well taken up, which shows that SMES are eager to take advantage of available assistance to automate and digitalise their businesses.

For example, some 106 SMES and mid-tier companies have been awarded the SAG through MDEC, involving a total amount of Rm15.6mil, from January to November this year.

The grant aims to drive these businesses towards kickstarting the implementation of digital processes and the use of technology tools that will automate their business operations.

To increase digital adoption among SMES, the government will also enhance the SME Digitisation Grant Scheme initiative. For 2022, the total funding for this scheme has been increased to Rm200mil with Rm50mil dedicated towards bumiputera micro-entrepreneurs in rural areas.

MDEC has also seen good uptake in its digital skills-related programmes. This includes the Global Online Workforce programme, which was launched in August 2018 to assist people to leverage crowdsourcing platforms to generate digital revenue.

Mahadhir says the programme helps equip those with skills and know-how to become successful digital freelancers.

To date, over 30 global platform partners have been formed while 8,500 of B40 freelancers have been trained and have generated Rm232mil of income.

To further ensure skills enhancement, the government has allocated a total of Rm1.1bil under Budget 2022 to assist 220,000 trainees to undergo various upskilling and reskilling programmes.

“Prior to Budget 2022, MDEC has been running programmes geared towards increasing digital adoption and talent upskilling. For example, MDEC’S Mydigitalworkforce Work in Tech (MYWIT) was introduced under Kumpulan Wang Covid-19 in 2020 that involved Rm100mil fund to support MDEC’S #Mydigitalworkforce Movement.

“It aims to incentivise employers to hire unemployed Malaysians through training and salary subsidies. To date, there are over 47,000 job applications via various initiatives under #Mydigitalworkforce Movement,” Mahadhir shares.

MYWIT is targeting companies that are offering digital tech and services roles, in line with the national goal of creating 500,000 new jobs by 2025 as outlined in the MYDIGITAL blueprint.

He says MDEC has been enhancing the incentive structure by simplifying the eligibility criteria and processes, allowing companies to have a faster approval timeframe and greater inclusivity via less restrictive requirements.

The new structure allows eligible companies to receive up to RM23,600 per person for hiring unemployed Malaysians for digital jobs.

Aside from MYWIT, MDEC also offers the Digital Skills Training Directory, an initiative to guide Malaysians in their digital upskilling journey, particularly in the areas of fintech, data science, cybersecurity, software development, game development, animation and digital global business services.

Mahadhir also notes that the extension of tax relief will help maintain existing investments and attract even more for next year, especially for technology companies, which will not only boost jobs in the sector but also enable more technology and knowledge transfer that would benefit local small businesses.

MDEC has been driving digital investments into the country through the Digital Investment Office, a collaborative platform between MDEC and Malaysia Investment Development Authority (MIDA) to facilitate digital investments into the country.

“Driving our efforts is the ‘Digital Investments Future5’ (DIF5) Strategy, a five-year plan focusing on five key thrusts aimed at attracting investments and advancing Malaysia’s digital economy.

“The strategy targets to achieve Rm50bil investments in the digital economy by 2025, focuses on key industry sectors, attract 50 Fortune500 tech companies to land and expand in Malaysia, establish five unicorn companies and create 50,000 high-value jobs,” he says.

The key industry sectors identified by the agency as key drivers are Agtech, Healthtech, Islamic Digital Economy and fintech, Cleantech and Edutech.

Mahadhir also stresses that the DIF5 Strategy is aligned to the National Investment Aspirations, which sets out to increase economic complexity, develop sophisticated products and services, create high value jobs, extend domestic linkages, increase the breadth and depth of domestic supply chains and develop high productivity sectors, among other things.

MDEC has attracted 2,794 active Msc-status companies and brought in Rm384bil worth of investments via MSC Malaysia since 1996.

These total up to Rm588bil in revenue generated and Rm212bil in exports generated, as of December 2020.

“MDEC welcomes the allocation of Rm2bil for strategic investments, which includes efforts to attract strategic foreign investments especially multinationals that are valuable to existing industry and to push the development of skilled workers and developing local SMES.”

Source: The Star