MIDA on track to secure RM70 bil target for digital investments
09 Feb 2023
The Malaysian Investment Development Authority (MIDA) is on track to achieve its RM70 billion target for digital-related investments in line with the Malaysia Digital Blueprint’s (MyDIGITAL) strategies.
With robust strategies in place to ensure that digital-related investments remain competitive in the country, the Digital Investment Office (DIO), a collaborative platform between MIDA and the Malaysia Digital Economy Corporation (MDEC), has successfully facilitated a total of RM66.47 billion investments as of September 2022, which is over 99% of the target under the MyDIGITAL initiative.
Notable data centre and data hosting projects approved, including the People’s Republic of China’s Bridge Data Centres Malaysia III Sdn Bhd and ByteDance System Sdn Bhd, as well as Malaysian public-listed company YTL Power International Bhd, is a testament to Malaysia’s readiness to host more digital investments projects.
MIDA executive director (services development) Zuaida Abdullah said digital adoption among businesses in the country is accelerating, although it is still low among small and medium enterprises (SMEs) due to barriers such as technology costs and the absence of digital strategies.
“Digitalisation by businesses is more common today. Although the journey can be challenging for SMEs, they should embrace technological advancements such as artificial intelligence (AI), Internet of Things (IoT) and Big Data.
“To this end, MIDA is facilitating industry players in their digital transformation journey in order to reduce the digital divide between Malaysian SMEs and multinational companies (MNCs) in Malaysia,” she told Bernama in an exclusive interview recently.
MIDA collaborated with the Malaysia Productivity Corporation (MPC) and Intel Malaysia to launch the ‘AI for SMEs (AI4S) Programme’ proof of concept project compilation booklet on June 22, 2022, which featured 31 completed pilot projects.
A total of 100 SMEs were selected to participate in the AI4S programme whereby they underwent a comprehensive technology-enabling process and training to implement personalised pilot projects for their businesses to jump-start their AI technology adoption journey.
Setting up of MIDA’s Digital Investment Office (DIO) and Domestic Investment Coordination Platform (DICP)
MIDA and MDEC had set up the DIO in 2021 to attract, coordinate, promote and facilitate all digital investments in Malaysia, in addition to strengthening coordination among all investment promotion agencies (IPAs) in the country.
The move was endorsed by the National Council of Digital Economy and the Fourth Industrial Revolution (MED4IR).
According to Zuaida, the setting up of the DIO was timely and in line with the global investment shift towards digitalisation and Industrial Revolution 4.0 (IR4.0), creating unique and interesting value propositions to attract more digital-related projects.
“The DIO engages and collaborates with the federal and state governments, service providers, IPAs, technical agencies and other related departments.
“It leverages MIDA’s global network of 21 offices overseas and 12 regional offices throughout Malaysia to meet investors on the ground and assist them with the implementation of their projects,” she added.
Meanwhile, the DICP was set up in 2018 to assist and facilitate local companies, especially SMEs, in bridging financial and technology gaps as well as gaining market access through strategic collaborations or joint ventures with potential partners.
Its scope includes technology business matching, project financing, capital raising (debt and equity), merger and acquisition, divestments and takeover and initial public offerings (IPOs).
“Currently, the DICP unit, which comes under the purview of MIDA’s Domestic Investment Division, oversees three main initiatives — establishing greater connections with existing banking sectors, linking up with alternative financing funders and engaging with companies that are ready for IPO,” said Zuaida.
Strategies to encourage digital investment
Zuaida said Malaysia is always ready to welcome quality investments and encourage companies to embrace new and advanced technologies to strengthen the industry ecosystem by raising productivity levels, increasing efficiency and enhancing local capabilities.
“As digitalisation is a fast-evolving segment and becoming a new norm, we also welcome new technologies that can enhance Malaysia’s capability as a digital nation.
“In the wake of IR4.0, businesses are keener to acquire the knowledge and expertise they need,” she said.
Key strategies outlined by MIDA to encourage digital investments include Industry4WRD: National Policy on Industry 4.0; Industry4Wrd Intervention Fund and the Automation Capital Allowance.
Zuaida also noted that the government’s initiative in expediting the 5G network rollout via Digital Nasional Bhd will be a key driver of Malaysia’s economic growth.
“The adoption of 5G technologies is projected to increase Malaysia’s gross domestic product by 5% or RM122 billion and create 750,000 high-skilled jobs by 2030; driving efficiencies, increasing productivity and creating new opportunities for Malaysia’s economy,” added Zuaida.
As of December 2022, Malaysia’s 5G rollout has achieved almost 50% coverage of populated areas nationwide.
MIDA will continue its promotions and execute its action plans to further enhance the adoption of digitalisation in businesses, with more focus on the environmental, social and governance (ESG) agenda in the project pipeline.
Zuaida said that bridging the ESG agenda and digital transformation is vital, noting that now is the time for businesses and technology to come together to plan a sustainable future.
“The data centre companies, for example, have corporate targets to reduce their carbon footprint and set ambitious goals to achieve net zero carbon emissions over the next 20 to 30 years.
“Ultimately, forward-looking ESG practices matter as it benefits the environment and society. By taking a proactive role in promoting and implementing sustainability initiatives, the data centre industry will be best positioned to serve its essential role in connecting the global economy,” she said.
Additionally, MIDA has urged the MNCs to invest in upskilling, reskilling and cross-skilling their talents in order to bridge the skills gap as part of the social elements of ESG.
Citing Microsoft as an example, she said the technology giant has announced its commitment to upskill one million Malaysians by the end of 2023 through the ‘Bersama Malaysia’ initiative.
“As of August 2022, Microsoft has achieved over 60% of its skilling target or 600,000 talents,” added Zuaida.