MALAYSIAN ICT SECTORAL OUTLOOK - World … ICT SECTORAL OUTLOOK: Trends , Challenges and Prospects The Experience of a New Participant Shaifubahrim Saleh President, The National ICT

PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA

ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA



WTO ITA Symposium Geneva, Switzerland

14 -15 May 2012

MALAYSIAN ICT SECTORAL OUTLOOK: Trends , Challenges and Prospects

The Experience of a New Participant

Shaifubahrim Saleh President, The National ICT Association of Malaysia



Formed in 1986

Commands 80 % of ICT industry

International Affiliations

PIKOM Annual Events Membership : 1986-2011

Wisma PIKOM : 2012

PIKOM @26

PIKOM in Brief: Voice of ICT Industry in Malaysia



Population : 28.3 million Total Fertility Rate (TFR) : 2.2 (below replacement level)

Per Capita income : USD7,760 (RM25,866) Pre-crisis GDP growth : 5.7 % (2006-2008) Revised GDP Growth : 2.0% (2009-2010) World Competitiveness : 10th position

Unemployment rate : 3.6 % (low unemployment )

Consumer Price Index : 2.8 % (low inflation)

Literacy : 93.1% (high literacy )

About Malaysia

QUALITY POPULATION

THROUGH ICT

Research

Development

Innovation

Knowledge worker

Knowledge Economy

Knowledge Society

Innovative Economy

Digital Economy



LOW INCOME – FACTOR DRIVEN ECONOMY

MIDDLE INCOME – INVESTMENT DRIVEN

ECONOMY

HIGH INCOME – INNOVATION DRIVEN

ECONOMY

Until late 70’s

Until mid 90’s

By 2020 GNI per capita

Land, labour and low

skills

Infrastructure, Capital, Factory,

Technical Skills and Semi-skilled

Workforce

Info-structure (ICT), science, R&D, knowledge

capital, innovation skills, XY Generations,

entrepreneurship and globalization

1980 GNI per capita:

RM1820

1980 Household Income:

RM692


RM2020


RM4,025 (USD 1,183)


RM5406


RM26,420 (USD8,256)

2020 Target:

USD21,834

10th MP (2011-2015)

USD12,139

Developed Economy

Benchmark:

USD14,818

GNI Per Capita (USD$)

1970 2009

Korea 260 21,530

Malaysia 380 6,760

Source: DOSM /10th Plan /PIKOM

New Economy Model Proposition: Higher Value Adding / Higher Income Nation

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FD

I Driv

en

Gro

wth

Pe

riod

s

Next Economic Major Thrust: Endogenous Growth through New Transformation Policy

New

Transformation

Policy



VISION2020

1 Malaysia ETP GTP

Po

liti

cal

Tra

nsfo

rmati

on

Pro

gra

mm

e (

PT

P)

Ru

ral T

ran

sfo

rmatio

n P

rog

ram

me (R

TP

)

Tenth Malaysia Plan (10MP : 2011-2015) /

Eleventh Malaysia Plan (11MP: 2016-2020)

DTP

Preservation

and

enhancement of

unity in

diversity

People First

and

Performance

Now

One

Malaysia

New Economy Model:

A High Income,

Inclusive &

Sustainable Nation

131 Entry Point

Projects;

60 Business

Opportunities;

8 Strategic Reform

Initiatives (SRI)

Economic

Transformation

Programme

Effective delivery of

Government Services

6 National Key Result

Areas (NKRA)

Government

Transformation

Programme

Accelerate the

Development of

Digital Economy;

Improve Quality of life

25 Entry Point

Projects;

28 business

opportunities;

Digital

Transformation

Programme

National Transformation Policy Strategies



An Overview: ICT Policy Strategies in Malaysia



Contribution of ICT GDP mainly comes from private consumption of ICT Products



ITA Played a Crucial Role in the Transformation of Malaysian ICT Sector

1970 E&E

KNOWLEDGE

WORK FORCE

KN

OW

LE

DG

E

BA

SE

EC

ON

OM

Y

1994 MSC

2011 IDE

ICT ERA INFLEXION PHASE

INDUSTRIAL

ECONOMY

INDUSTRIAL

WORK FORCE



Generally : 10%-30% import tax and

10% sales tax.

Electrical circuit boards, integrated

circuits and integrated circuit boards

dutiable at 30% import tax and 10%

sales tax.

ICs 10% sales tax only. For use in

PCs, no duties chargeable.

Except CD ROMs which are for

computer use, video CDs and other

CDs are charged 10% sales tax.

Computer cables are dutiable at 30%

import tax and 10% sales tax. Modems

require an approved permit from

Telecom Malaysia.

Selected tax structure

Structural Changes in ICT Sector

Expanded trade volume

New jobs created

New ICT industries emerged

Demands for new ICT products and services emerged

Fosters new R&D in ICT sector

ITA Impacts

ITA Benefits to Malaysia

Malaysian Experience



Year 2010 Year 2000

Trend # 1: Structural changes in ICT Sector



Trend # 2: ICT Trade grew during industrial era , now declining



365.0

388.4

413.2

439.7

467.8

497.7

529.6

563.5

350.0

400.0

450.0

500.0

550.0

600.0

2005 2006 2007 2008 2009 2010 2011 2012

Average annual growth rate of ICT workforce

6.4%

Trend # 3: Share of Computer Professionals are increasing in

the ICT workforce



2000 2001 2002 2003 2004 2005 2006 2007 2008

Number Employed in ICT Sector 56,049 56,220 58,208 62,010 67,629 75,062 84,311 95,375 108,255

56,049

56,220 58,208

62,010 67,629

75,062 84,311

95,375

108,255

-

20,000

40,000

60,000

80,000

100,000

120,000

Nu

mb

er

Emp

loye

d

Trend # 4: 3 out of 4 ICT Graduates employed in ICT User

Industries



Trend # 5: Professional workforce at 13% poised to expand



Digital

contents can

be created or

captured or

manipulated

in various

devices

Digital

processes

requiring

shorter frame

of time, cost

effective and

ease handling

Digital storage

requires less

physical

storage, ease of

storage and

retrieval and

longer shelf-life

Digital

distribution

easily done,

cost effective,

globally

sharable and

targeted mass

Trend # 6: New ICT Products are emerging in line with IDE



Trend # 7: Shifts in mobile communication sector towards

cellular products

121.3% 27.2%



Trend # 8: Demand for Internet digital media products

growing



Trend # 9: Significant Expansion in e-Government Services



Nanotechnology MEMS Technology Semantic Technology Convergence : 4G

Wireless Technology Biotechnology ICT Road Map Grid Computing

Trend # 10: R&D micro-electronics sector poised to introduce new ICT

products and services in the market

Cyber security

Open Source

Cyber Laws



Key Challenge # 1: Supply of quality ICT graduates declining



Key Challenge 2 # ICT Remuneration still low



Key Challenge 4 # Highly skewed broadband provision



PENETRATION LEADERS

QUALITY LEADERS

South Korea

Hong Kong

Iceland

Luxemburg

Malta

United Arab Emirates

Netherlands

Japan

Latvia

Sweden

Switzerland Norway

Ireland

Bahrain

Singapore

Denmark

Finland

USA Germany

Canada

Slovenia

Lithuania Romania

Bulgaria

Cyprus

UK Turkey

Mexico

Poland

Italy

New Zealand

Hungary

Portugal Czech Republic

Slovakia

Taiwan

Israel

Australia

Greece

Austria

Spain

Ukraine

Argentina

Chile

Russia F.

China

Saudi Arabia

Malaysia

Angola

Nigeria

Kenya

Brazil

Peru

Vietnam

Colombia

Jordan

BROADBAND LEADERS

Algeria Egypt

Costa Rica

Tunisia

Pakistan

Ghana

Philippines

Morocco

India

Indonesia

Estonia

Belgium

France

BQ

S (S

cale

d)

Household Penetration

South Africa

Thailand

LOW PENETRATION

/ QUALITY

Challenge # 4: Lack global competitive edge in broadband

leadership



A number of parameters are in place in order for the nation to move up not through infrastructure alone but also through building human capital

and harnessing the demands of YZ technology savvy generation

Challenge #5 : Meeting ICT demands of YZ technology savvy

generation generation



1. To increase ICT contribution to 17% by 2020;

2. To increase the contribution of ICT Services in trade;

3. To nurture high value adding research, development and

innovation activities in ICT segments in micro-electronics, nano-

technology, MEMS, bio-informatics, cyber security, cloud

computing and mobile commerce;

4. To increase scope and coverage of broadband ubiquity;

5. To expand the scope and coverage of pervasive computing in

all spheres of life;

6. To create competent workforce;

7. To create competent and vibrant ICT industry;

8. To create adequate top-notch ICT jobs;

9. To promote green ICT across all sectors of economy;

10. To be globally competitive

Top 10 Aspirations for Malaysia as a member in Information Technology Agreement



Documents

MALAYSIAN ICT SECTORAL OUTLOOK - World … ICT SECTORAL OUTLOOK: Trends , Challenges and Prospects The Experience of a New Participant Shaifubahrim Saleh President, The National ICT