Digital transformation to contribute US$10b to Malaysia GDP by 2021

KUALA LUMPUR: Digital transformation will add about US$10 billion (US$1 = RM3.90) to Malaysia's gross domestic product (GDP) and increase the economic growth rate by 0.6% annually by 2021, according to a business study released today.
Microsoft Malaysia Managing Director, K. Raman, said in 2017 alone, about 7% of Malaysia's GDP was derived from digital products and services created directly through the use of digital technologies, such as mobility, cloud, Internet of Things and artificial intelligence (AI).
"Malaysia is clearly on the digital transformation fast track and within the next four years, we expect to see approximately 45% of its GDP derived from digital products and services," he told reporters at the release of the findings of the business study here today.
The study, 'Unlocking the Economic Impact of Digital Transformation in Asia-Pacific', was produced by Microsoft in partnership with IDC Asia/Pacific.
It was based on a survey which involved 1,560 business decision-makers in mid- and large-sized organisations across 15 economies in the region, including 100 respondents from Malaysia.
The study highlighted the rapid impact and widespread disruption on traditional business models following digital transformations, and predicted a dramatic acceleration in the pace of digital transformation across Asia's economies.
Raman said at the same time, organisations in Asia-Pacific were increasingly deploying emerging technologies, such as AI, as part of their digital transformation initiatives, and that will accelerate growth even further.
The study identified five key benefits to their bottom lines from digital transformation — greater productivity; higher profit margins; cost reduction; increased revenue from new products and services; and, improved customer advocacy, he said.
"These benefits will also improve by at least 20% within three years," said he said.
He said the study revealed that many believed that digital transformation would bring changes to the society, including a potential rise in personal income through freelance and digital work, high-value job creation, increased educational and training opportunities, and smarter, safer and more efficient cities.
The study said the rise of digital transformation in Asia-Pacific economies would affect the labour market where many types of jobs would evolve and change.
"This was firmly supported by the Malaysian respondents, who projected that 96% of jobs would be transformed in the next three years through digital transformation, and that more than half of the workforce in the market today would be redeployed to higher value roles or reskilled to meet the needs of the digital age," he said.
Raman said what was encouraging was that 76% of the respondents were confident that their young professionals already had future-ready skills that would help them transition to new roles.
The governments and organisations should still focus on re-skilling and up-skilling, as continuous learning was important to ensure a successful workforce transformation for the digital age, he said.
"The digital free trade zone, online e-commerce and digital blueprints by the government will benefit the society and consumers at large.
"We strongly endorse and encourage the Malaysian government's efforts in promoting digital transformation adoption," he said. — Bernama