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2012/CTI2/MAG/DIA/004
Malaysian ICT Sectoral Outlook: Trends, Challenges and Prospects Submitted by: National ICT Association of Malaysia
Information Technology Agreement Dialogue Singapore 29 March 2012
MALAYSIAN ICT SECTORAL OUTLOOK: Trends , Challenges and Prospects
Shaifubahrim Saleh President The National ICT Association of Malaysia INFORMATION TECHNOLOGY AGREEMENT (ITA) DIALOGUE APEC MARKET ACCESS GROUP (MAG) 2 Marina Bay Sands Exhibition and Convention Centre, Singapore 29 March 2012 PE PER P PERSATUAN ER ER RSAT SA S SAT AT A TU UAN UA AN IIN AN INDUSTRI NDU DU DUS US ST TRI TR RI K RI KO KOMPUTER OMPU MP M PU P UTER TER TE ER DAN DA DAN MULTIMEDIA MU UL ULT LT L TIME IM IMEDIA IM ME EDI DIA DIA IA MALAYSIA MALA MA LAY L A AY YSI SIA S IA IA ASSOCIATION ASS AS A SS S SO SOCI OC OCI CI C CIATI IATI AT A TI T TION ION ON OF OF THE THE TH HE COMPUTER COMPU CO MP M MPUTER PU P U UTER TE T TER ER ER AND AND AN ND MULTIMEDIA MULT MULT UL U ULTIME LTIME LT IME IM MEDIA DIA DI IA INDUSTRY INDUS IN DU D US U USTRY STRY TR T RY R Y MALAYSIA MALAY MALAY MA LA LA LAYSIA AY YS SIA SI IIA A
Membership : 1986-2011
PIKOM Annual Events
Formed in 1986 Commands 80 % of ICT industry PIKOM @26
Wisma PIKOM : 2012 International Affiliations
PIKOM in Brief: Voice of ICT Industry in Malaysia PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
Population : 28.3 millio million on Total Fertility Rate (TFR) : 2 .2 ((b (below beellow ow replacement rep ep pla la ace cceme eme ment nt llevel) evel ev el ) 2.2 Per err C Ca Capita apita income : USD7,760 (RM (RM25,866) (RM25,866 RM M25,86 M 5,86 66 6) Pr rre e-cccrrisis GDP growth e : 5.7 % (2006-2008) (200 06 0 6-2 6 20 2 008 8)) 8 Pre-crisis Revised GDP Growth : 2.0% 0% % (2009-2010) ((200 09 0 9-2 9 20 2 010 0 0) t po World Competitiveness : 10 0th p position osition ositio Unemployment rate Consumer Price Index Literacy
6 % ((l(low ow o w unemployment uneemp plo oym ymeen nt ) : 3.6 : 2.8 % (l((lo (low lo ow w iinflation) nffla ati t io on n) :9 93.1% % (high ((h hiig gh literacy lite lilite tera racy cy )
QUALITY Q UALITY P POPULATION OPULATION THROUGH T HROUGH ICT ICT ¾R Researc Research ch c h ¾D Developmen en ntt n Development ¾ IIn nnovation n Innovation
¾K Knowledge workerr ¾Knowledge ¾ ¾K Kn nowledge Econom Economy my m y Society ¾K Knowledge Societ tty y Innovative Economy ¾ IIn nnovative Econom nom my m ¾D Digital Econom my Economy
About Malaysia PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
2010 GNI per capita:
GNI Per Capita (USD$)
1970
2009
Korea
260
21,530
2009 Household Income:
Malaysia
380
6,760
RM4,025 (USD 1,183)
By 2020 GNI per capita
RM26,420 (USD8,256)
1995 GNI per capita:
RM5406
1980 GNI per capita:
RM1820
1995 Household Income:
2020 Target:
RM2020
USD21,834
RM692
USD14,818
Until late 70’s
Info-structure (ICT), science, R&D, knowledge capital, innovation skills, XY Generations, entrepreneurship and globalization Infrastructure, Capital, Factory, Technical Skills and Semi-skilled Workforce
LOW INCOME – FACTOR DRIVEN ECONOMY
USD12,139 Developed Economy Benchmark:
1980 Household Income:
Land, labour and low skills
10th MP (2011-2015)
Until mid 90’s
MIDDLE INCOME – INVESTMENT DRIVEN ECONOMY
HIGH INCOME – INNOVATION DRIVEN ECONOMY Source: DOSM /10th Plan /PIKOM
New Economy Model Proposition: Higher Value Adding / Higher Income Nation PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
New Transformation Policy
FDI Driven Growth Periods Next Economic Major Thrust: Endogenous Growth through New Transformation Policy PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
1 Malaysia
ETP
GTP
DTP
One Malaysia
Economic Transformation Programme
Government Transformation Programme
Digital Transformation Programme
Preservation and enhancement of unity in diversity
New Economy Model: A High Income, Inclusive & Sustainable Nation
Effective delivery of Government Services
Accelerate the Development of Digital Economy; Improve Quality of life
People First and Performance Now
131 Entry Point Projects; 60 Business Opportunities; 8 Strategic Reform Initiatives (SRI)
6 National Key Result Areas (NKRA)
25 Entry Point Projects; 28 business opportunities;
Tenth Malaysia Plan (10MP : 2011-2015) / Eleventh Malaysia Plan (11MP: 2016-2020)
National Transformation Policy Strategies PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
Rural Transformation Programme (RTP)
Political Transformation Programme (PTP)
VISION2020
An Overview: ICT Policy Strategies in Malaysia PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
Contribution of ICT GDP mainly comes from private consumption of ICT Products PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
KNOWLEDGE BASE ECONOMY
2011 IDE
1994 MSC
KNOWLEDGE WORK FORCE
1970 E&E
INDUSTRIAL ECONOMY
ICT ERA
INDUSTRIAL WORK FORCE
INFLEXION PHASE
ITA Played a Crucial Role in the Transformation of Malaysian ICT Sector PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
Selected tax structure
Malaysian Experience
¾Generally : 10%-30% import tax and 10% sales tax.
Structural Changes in ICT Sector
¾Electrical circuit boards, integrated circuits and integrated circuit boards dutiable at 30% import tax and 10% sales tax. ¾ICs 10% sales tax only. For use in PCs, no duties chargeable. ¾Except CD ROMs which are for computer use, video CDs and other CDs are charged 10% sales tax. ¾Computer cables are dutiable at 30% import tax and 10% sales tax. Modems require an approved permit from Telecom Malaysia.
Expanded trade volume
ITA Impacts
New jobs created New ICT industries emerged Demands for new ICT products and services emerged
Fosters new R&D in ICT sector
ITA Benefits to Malaysia PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
Year 2000
Year 2010
Trend # 1: Structural changes in ICT Sector PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
Trend # 2: ICT Trade grew during industrial era , now declining PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
600.0
563.5 550.0
529.6
497.7 500.0
Average annual growth rate of ICT workforce 6.4%
467.8
450.0
439.7
413.2 400.0
388.4 365.0
350.0 2005
2006
2007
2008
2009
2010
2011
2012
Trend # 3: Share of Computer Professionals are increasing in the ICT workforce PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
120,000
108,255 95,375
100,000
Number Employed
62,010 60,000
84,311
75,062
80,000
67,629
56,049 56,220
58,208
40,000
20,000
Number Employed in ICT Sector
2000
2001
2002
2003
2004
2005
2006
2007
2008
56,049
56,220
58,208
62,010
67,629
75,062
84,311
95,375
108,255
Trend # 4: 3 out of 4 ICT Graduates employed in ICT User Industries PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
Trend # 5: Professional workforce at 13% poised to expand PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
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 PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
121.3%
27.2%
Trend # 7: Shifts in mobile communication sector towards cellular products PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
Trend # 8: Demand for Internet digital media products growing PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
Trend # 9: Significant Expansion in e-Government Services PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
Nanotechnology
MEMS Technology
Semantic Technology
Grid Computing
Wireless Technology
Biotechnology
Convergence : 4G
ICT Road Map
Cyber security Cyber Laws Open Source
Trend # 10: R&D micro-electronics sector poised to introduce new ICT products and services in the market PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
Key Challenge # 1: Supply of quality ICT graduates declining PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
Key Challenge 2 # ICT Remuneration still low PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
Key Challenge 4 # Highly skewed broadband provision PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
SSouth o Korea Ja Japan
QUALITY LEADERS
BROADBAND LEADERS
Latvia Sw wed e Sweden
Bulgaria
BQS (Scaled)
Romania Lithuania
Finland
Ne N Netherlands Hong Kong Ho H
Portugal Germany Czech Republic Tunisia Thailand Costa Rica Brazil Ukraine
South Africa India
Belgium
Denmark
USA
Hungary Poland
Russia F.
ud Arabia biaa Saudi
Estonia eece Greece
Switzerland Singapore Luxemburg Lu
UK
Ireland Ire d
Slovenia Malta M
Turkey Israel Mexico
Pakistan
Nigeria
Norway N y
France
Chile
Ghana
Cyprus C
Argentina
Indonesia
China Malaysia Peru Colombia Vietnam Jordan Algeria Morocco Egypt
LOW PENETRATION / QUALITY
Kenya
Angola
IIceland ce
Slovakia
Spain
Australia
New Zealand Italy Austria
United Arab Emirates U Bahrain B Canada Taiwan
PENETRATION LEADERS
Philippines
Household Penetration Challenge # 4: Lack global competitive edge in broadband leadership PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
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 PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
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, nanotechnology, 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 PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA
PERSATUAN INDUSTRI KOMPUTER DAN MULTIMEDIA MALAYSIA ASSOCIATION OF THE COMPUTER AND MULTIMEDIA INDUSTRY MALAYSIA