Experts call for data initiatives to be prioritised 

This article first appeared in The Edge Malaysia Weekly, on March 15, 2021 - March 21, 2021.
Experts call for data initiatives to be prioritised 
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The data initiatives and policies within the Malaysian Digital Economy Blueprint deserve a second look because they are the bedrock on which other digital initiatives will be built upon.

According to PricewaterhouseCoopers (PwC) Malaysia’s chief digital officer Michael Graham, about half of the strategic thrusts in the blueprint required to drive the national digital economy have some sort of reference to or implication on data. 

“These initiatives either rely on data, or propagate an environment for data to be exchanged — to be more open, secure and easily transferred. On one hand, you are dealing with the Malaysian government looking to digitalise its service layer, which requires cloudification, which in turn requires a more transparent use of data,” says Graham.

“On the other hand, there are initiatives in place to allow public-private partnerships and data exchanges to happen. The reason the private sector should pay attention to this is because the data that the government holds will not only affect our day-to-day lives, but also foreign direct investment opportunities, and trigger opportunities around social enterprises and more.”

Graham gives the example of the open data initiative in the UK, where more than 8,000 government datasets were published for private sector use when it first launched in 2015. These included census-related data, voting-related data, and even metrics surrounding Sustainable Development Goals (SDGs).

He points out that industries which provide general consumers with products and services will benefit from having access to open consumer data. Industries that deal with exports, such as manufacturing, agriculture and supply chain, which come in frequent contact with government departments, will also greatly benefit from standardising and exchanging data more effectively.

“If your company works within this realm, it is important to know the legislative protections surrounding data, how it gets published, what is the scope of active management and the consent captured,” he adds.

“PwC once conducted a survey, where 85% of customers surveyed have some form of trust deficit when handing over their personally identifiable data to companies. A lot of that trust deficit stems from not having a clear legislative framework. As open data unlocks the potential for artificial intelligence (AI) technology, anything that affects these data policies, such as encouraging a ‘responsible AI’ framework, will have ripple effects across the private sector.”

Launched on Feb 19, a central theme in MyDIGITAL is to drive digital transformation in the public sector, including improving data sharing capabilities among all related parties. In line with this, the Malaysian Administrative Modernisation and Management Planning Unit (Mampu) has been positioned as the sole agency to drive the transformation.

In addition to requiring all ministries and agencies to use the Malaysian Government Central Data Exchange (MyGDX), the blueprint is looking at ensuring government data is open by default. The target is that by 2025, 50% of the data shared will be machine-readable and accessible through application programming interfaces (APIs).

Through MyDIGITAL, authorities are looking to review existing laws surrounding data protection and its related regulatory framework, including the Personal Data Protection Act (PDPA), Digital Signature Act, Cyber Security Act and Official Secrets Act. The goal is to ensure holistic personal data protection and privacy. They are also aiming to enhance cross-border data transfer mechanisms in both the PDPA and international trade policies.

Malaysia as the REGION’S  data broker

In conjunction with the launch of the blueprint, the government has given conditional approval for Microsoft, Google, Amazon and Telekom Malaysia Bhd (TM) to build and manage hyperscale data centres as well as for the provision of hybrid cloud services.

Graham believes there are plenty of short-term growth opportunities in Malaysia’s aspiration to become Southeast Asia’s data hub. The large number of investments in building hyperscale data centres can bring in a wave of new talent and grow the data industry as a whole.

He cites the example of companies setting up offshore hydrogen-powered data centres that are being trialled across the world, and new business opportunities with the sole purpose of cooling the amount of heat generated in data centres. New business opportunities can emerge from local businesses building data centres for third-party solution providers.

“There is an extraordinary simplicity of provisioning computing power on large cloud service providers such as Amazon Web Services (AWS), which can be done in 15 keystrokes. These services are super customer-centric, and if a local data centre was to match that, it could not be more expensive or slower than these cloud service providers,” says Graham.

“However, what we find is that many of these physical data centres for these cloud service providers, be it Amazon, Google or Microsoft, actually sit in Malaysia because the closer the data centre is to the end-user, the faster the latency. There is also a whole host of other services that sits behind the data centre, such as operating the physical data centre itself, providing service and maintenance and providing cooling or cleaning services.”

However, Graham points out that for Malaysia to maximise the benefits of being the regional data centre hub, it must be followed by a medium- to long-term plan to offer professional data services in order for it to become the international data broker of the region.

He explains that Malaysia has the capacity to build a trusted environment where local companies are able to store, manipulate, transmit and analyse great arrays of data on behalf of international clients and even sovereign data from other countries, provided that Malaysia establishes a safe and secure environment.

“We can’t just build and own the data centres and run them. We have to do more than that by providing a service that yields value on top of just operating data centres. We do have competitive real estate prices and the potential to build great talent. We are not exactly facing a resource problem because we can overcome it by managing different levers such as subsidies and tax incentives,” he adds.

“This is a mindset challenge, and I think that there is a sort of willingness and bravery to try and scale our data hub potential at a policy and enabler level. If we can get this right, and have the right communities established within the private sector, we can come out of this on top.”

The Digital Free Trade Zone (DFTZ) initiative in 2017 is an example of the government’s capacity to introduce speedy and bold changes. Authorities had to effectively repurpose the Malaysia Digital Economy Corporation (MDEC), put together about 70 different stakeholders, from international freight forwarders to customs, coordinate with various government departments that issue various licences, and complete the project within nine months. 

Graham believes the data initiatives within MyDIGITAL have the potential to be just as bold and effective.

Open data policy needs to be addressed 

EY’s Asean data and analytics leader Adrian Chew believes the government has taken a commendable step to set a target to digitally transform itself by 2030. He says the first phase of the blueprint is really about interdepartmental or inter-agency government data sharing, and it is setting a good example for the private sector to take similar steps, with the end goal being data sharing among private businesses and the government.

As a data practitioner who does data analytics consulting for clients, Chew points out that open government data is perhaps the single most important policy he is paying attention to. 

“There are several challenges with the way data is structured and accessed when it comes to our open data portal, from its accessibility to its lack of granularity. This really impedes a lot of good work that would otherwise come out from having access to good-quality open data,” he says.

He notes that one of the major points that need to be addressed is the standardisation of the data collected and released through the open government data portal. Common elements, such as the name of the state “Penang” or “Pulau Pinang”, need to be predefined in order to generate meaningful analytics when going through the data, he adds.

Metadata tagging, that is, how the data is interpreted and defined, is an important element in open data that is not adequately addressed, he explains. Chew cites the example of the term “high-speed broadband” used in open data, which could either mean a 25Mbps or 100Mbps connection, depending on where you live, but it is problematic when not properly defined.

“There are also other issues surrounding open data. Today, some of the data is in Bahasa Melayu while some is in English, which makes it difficult for an international audience to use this data properly,” says Chew.

“If you go down another level, you would notice that this open data is divided into clusters, which are organised by separate ministries and agencies. So it is difficult to find the right data for your analysis unless you know the right agency that generates the open data you are looking for.”

Chew calls on authorities to focus more on the quality of the open data that is available rather than solely on the quantity. He recommends having a feedback system on the open data portal for individuals and the private sector to request for unavailable data in order to create a data-rich ecosystem.

His second recommendation is for authorities to work with specific sectors and ecosystems to collect and make available certain types of data that are specific to that sector alone. Representatives from the private sector are able to voice their actual needs, and both parties are able to collect data that match the demand from the industry.

Data initiatives require more third-party Involvement

President of the FinTech Association of Malaysia (FAOM), Mohammad Ridzuan Abdul Aziz, tells Digital Edge that he was excited about MyDIGITAL when it was launched, and that the idea and awareness of the digital economy is taken seriously by the government. 

However, based on FAOM’s earlier participation in neighbouring countries’ digital economy and comparing that with what is proposed in MyDIGITAL, Ridzuan believes there are gaps that need to be addressed in making the blueprint more comprehensive, especially in identifying relevant stakeholders, and specific action plans that follow.

“What we saw missing in this blueprint is there is no mention of the role of the state governments, government-linked companies (GLCs) and government-linked investment companies (GLICs),” says Ridzuan.

“Although Mampu has been assigned as the central coordinator for the digitalisation initiatives, authorities need to remember that economic activities do not happen just because of coordination. The state governments drive a lot of economic activities; GLCs and GLICs facilitate investments from corporate and capital markets respectively; and the private sector relies on a combination of federal and state policies that enable or prohibit them from running their businesses. 

“The missing element that we have identified is how these initiatives will cascade effectively into each state government’s policies, the strategic objectives of GLCs and GLICs and, eventually, to private businesses. This disconnect will be one of the potential hindrances in terms of creating an effective plan on how MyDIGITAL is going to be implemented.”

Ridzuan points out that the fintech industry is one of the best-prepared industries to take advantage of open data policies. He says although FAOM was involved in the discussions prior to the launch of the blueprint, it was brought in at the tail end of the discussions. He is worried that the blueprint does not address the concerns that it and many other players within the private sector are facing.

“[The fintech industry] has been advocating the sharing of behavioural data among organisations, be it in the private or public sector, because behavioural data is not deemed as private data, as long as it cannot be used to identify the individual who generated the data. The ability to analyse and share this data will give many stakeholders the ability to understand what the key issue statements are and how these issues can be resolved without compromising the requirements of the PDPA. This is why we highlight the importance of federated data,” says Ridzuan.

According to him, federated data is where all behavioural private and government data is captured, kept and managed centrally — with Mampu playing the custodian role to ensure the data’s security, interoperability and relevancy.

The federated data platform would enable authorised stakeholders from both the private and public sectors to effectively share and exchange data — to be used to drive digital economic policies, activities and reporting at multiple levels, including federal, state, corporate, and at higher learning institutions and small and medium enterprises.

He explains that for any company to succeed in the fintech industry, it is important to have the right amount and type of data as well as data that is interoperable (that is, data that computer systems or software can make use of or exchange).

“Data sharing is very important when you want to expand and scale your business in the fintech industry. That is why, if the government wants to have a digital economy, it is important to have federated data — not just any ordinary data,” he adds.

Ridzuan says the focus now is on the implementation of the action plan regarding the data initiatives in the blueprint. He says FAOM is open to having discussions with Mampu on the best practices of implementation.

He also highlights the importance of putting the “economy” first in the “digital economy” — to give clear emphasis on economic performance. Once the specific economic sectors and key drivers have been identified, it is easier to decide on the action plan given the clarity of the parameters and the desired outcome. 

The federated data structure would facilitate information sharing between various key stakeholders on what is needed without much delay, identity the needs of the right stakeholders, as well as identify existing solution providers quickly.

If the economic drivers are not determined beforehand, Ridzuan fears we will return to asking the same age-old questions of “what” and “how”, despite the meticulously crafted blueprint.

“To come up with an effective action plan, the basic question to ask is, which economic drivers are you planning to empower? After that, how do you plan to do so — will it be at the state government level, entity level, or at the Mampu level?” he says.

“In terms of economic drivers, Malaysia needs to play to its strengths. It is good at outsourcing and providing global business services. Large players such as Shell and HSBC have set up data centres here, and in terms of Malaysia providing middle- and back-office capabilities digitally, this is the low-hanging fruit we can pursue.”