GrowingChampions: Driving Malaysia’s national digital transformation

This article first appeared in Forum, The Edge Financial Daily, on September 3, 2018.
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Digital opportunities are changing our world but in a changing Malaysia, how do we unlock the potential of digital to keep pace? A consistent lesson from The Boston Consulting Group’s (BCG) work with governments and businesses is that digital transformations are built on leadership that inspires from the top.

Malaysia is well positioned to take advantage of digital transformation. It has one of the highest rates of internet penetration in the region, making it a fertile ground for digital opportunity.

A successful transformation strategy must be based on a nimble approach that empowers true digital transformation. That means taking the initiative to inspire from the top while supporting infrastructure to deliver on the ground.

 

Inspiring from the top

BCG research estimates that e-government programmes have the potential to deliver efficiency benefits of up to US$50 billion a year globally by 2020. This opportunity is not without challenges with up to 80% of public sector digital transformations failing outright or achieving disappointingly limited success.

We need to be inspired in adopting digital as a nation and that inspiration must come from the top. Recent comments by Minister of Communications and Multimedia Gobind Singh Deo show the ambitions of travelling in this direction.

“With the rapid speed of change in technology, we need to keep up with the latest developments or risk being left behind,” Gobind said at the Wild Digital Conference in Kuala Lumpur in July.

This is an opportunity that is inspiring in its potential, which means aspiring to embrace it should be a priority for the nation.

 

Engaging on the ground with critical platforms

Leaders should begin by defining a unified vision for digital transformation, then establish a set of broad goals and specific outcomes to drive alignment with national priorities. Crucially, they must then engage with digital stakeholders in public and private sectors to execute the transformation on the ground.

Digital platforms for citizens present one such opportunity. Digital ID, such as that used by Australia Post, offers a great example — providing an efficient, digitalised ID for citizens. Digital citizen services are certainly an opportunity that Malaysia is primed for with growing internet penetration, alongside ambitious broadband expansion goals. The MyKad, with its smart card functionalities, already offers a template of how digital functionality can enhance essential public services. With biometrics technology on our smart devices, it is time to take the next leap to create a National Digital ID.

Open data platforms represent another opportunity for digital transformation. In Ivory Coast, open source telecoms data was used to map commuter travel across public transport networks to help improve the efficiency of public transport. Anyone who has travelled through KL on public buses will tell you how welcome that kind of innovation will be.

In Amsterdam, city-wide open data is forming the foundation for a variety of initiatives. This framework allows access to data such as census, traffic and even electricity usage, allowing developers to craft smart-city applications that help enhance the lives of citizens.

 

Supporting digitally enabled industry

The benefits of digital transformation, while enabled by government, are not limited to public services. Malaysia’s ICT sector contributed to 18.2% of the economy in 2016, up from 15.9% in 2012, and growing digital opportunities are set to further unlock value.

Technology is an important business enabler, a realisation that is gaining traction in government.

To quote Prime Minister Tun Dr Mahathir Mohamad: “I want to help small businesses, create more jobs for young people with simple, cheap and easy-to-use technology.”

Established industries using more traditional methods are also opening up to the possibility of digital. Agriculture is just one example where digital transformation could unlock significant opportunity. Looking at the wider connected nature of Industry 4.0, manufacturing, healthcare, logistics, telecoms and a wide range of other sectors are equally likely to benefit.

In truth, there is no industry that digital transformation could not enhance in some way. That is a fact that truly defines the scope of opportunity inherent in engaging on the ground.

 

Digital transformation empowers Malaysia

Unlocking the enormous possibility of digital opportunities for Malaysia is essential. When it comes to public services, digital transformation goes beyond simple monetary value. It is a way for the government to enhance citizens’ lives, a point highlighted by Mahathir in recent discussion with Alibaba founder Jack Ma.

In a connected digital world, nations that fail to keep up may find themselves falling behind. Governments that embrace the opportunities of digital transformation may be able to improve the lives of their citizens while continuing to empower economic growth.

Embracing digital transformation means adopting a flexible approach to the possibilities of digitalisation. Governments need to inspire from the top in order to deliver on the ground. Malaysia’s sustained growth over recent decades makes one thing clear — this is not a nation afraid to make the most  of new opportunities. When it comes to digital transformation, this is the spirit that will ensure that we continue to deliver national success.


Ching Fong Ong is senior partner and managing director at BCG Kuala Lumpur

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