Accelerating Digital Transformation Could Create Up To MYR257.2 Billion In Annual Economic Value By 2030

AlphaBeta report reveals why digital transformation is the route to economic recovery post-COVID-19.

Accelerating Digital Transformation Could Create Up To MYR257.2 Billion In Annual Economic Value By 2030
Photo by Mimi Thian on Unsplash

The COVID-19 pandemic has amplified the importance of digital transformation in expediting short-term economic recovery and boosting long-term economic resilience. In a new report, titled “Positioning Malaysia as a Regional Leader in the Digital Economy”, AlphaBeta revealed that the digital transformation of Malaysia could generate up to MYR257.2 billion in annual economic value by 2030, equivalent to about 17% of the country’s gross domestic product (GDP) in 2020. 

Of this opportunity, a substantial 72% - amounting to MYR184 billion - could be driven by technologies that help businesses and workers mitigate the economic impacts of COVID-19. Beyond managing the immediate impacts of the pandemic, digital transformation will also be important to boost resilience in the post-pandemic future and support Malaysia’s heavily-impacted export sector. 

Speaking at the virtual Grow with Google event today, Datuk Seri Mustapa Mohamed, Minister in the Prime Minister’s Department (Economy) said, “We must capture this digital economy opportunity. It will not only be critical for Malaysia as we forge ahead with our economic recovery efforts, but also to secure Malaysia’s future economic resilience. We are therefore committed to achieving this with the MyDIGITAL initiative, which sets its sights on transforming Malaysia into a technologically advanced, digitally-driven nation and a regional digital economy leader by 2030. We aim to create a better, more inclusive digital economy future for every Malaysian.” 

The report notes that digital adoption in Malaysia remains low and uneven across business sectors and sizes, especially among SMEs. Malaysia Digital Economy Corporation (MDEC) cites the digital skills shortage and the perceived high cost of investment in digital tools as the key reasons for the low digital adoption rate.  

In order to fully leverage the opportunities presented by digital transformation, the report identified 

three main pillars of action Malaysia could take: facilitate digitalisation in both the public and private sectors, build the nation’s digital talent, and promote digital trade opportunities. 

Commenting on Google’s contributions to each pillar, Marc Woo, Managing Director, Google Malaysia said, “This past year, many Malaysians have shown great resilience in facing the pandemic, and demonstrated the courage and readiness to innovate. Coupled with the fact that Malaysians are spending more time online and intend to continue using digital services in the post-pandemic future, digital adoption is crucial for businesses. This has motivated us at Google to continue offering free workshops and easy-to-use tools to help micro SMEs digitalize and reach more customers online. We have also collaborated with esteemed partners to launch programmes such as airasia academy (formerly known as Redbeat Academy) and ‘Wanita Cukup Berani’ by Nestle, alongside our own Mahir Digital Bersama Google program, to help businesses of all sizes and professionals of all backgrounds build their businesses and careers.” 

Marc added, “To promote digital trade opportunities, YouTube serves as an important platform for local content creators to expand their presence globally and provides an alternative source of income, particularly during the economic downturn due to the COVID-19 pandemic. For example, Malaysian content creators like Sugu Pavithra and Les’ Copaque have succeeded in leveraging YouTube  to reach a global audience.” 

Dr. Fraser Thompson, Founder and Managing Director, AlphaBeta said, “The report estimates that Google’s products bring about a total annual business and consumer benefit of around MYR40 billion in economic value, which is equivalent to the annual gross output of Malaysia’s real estate industry. By enabling businesses to unlock new revenue streams and expand their businesses through the use of advertising platforms, Google indirectly supports over 31,000 jobs locally.” 

Local businesses have successfully adapted to the challenges of COVID-19 by proactively embracing digital opportunities. For example, Dough By Sara Bakery, a home-based bakery in Selangor, experienced a 70% decline in sales at the start of the MCO. But after the owner, Sara, attended Mahir Digital Bersama Google workshops and learned to create a free online Business Profile, she managed to recover and double her sales.  

“When the pandemic hit Malaysia, my monthly sales orders fell. However, platforms such as Google’s Business Profile has helped me stay connected to my customers, and at the same time building more awareness and customer trust towards my bakery. As a result, this has allowed me to set up a physical bakery store without any loan and I can now give back to the community through job opportunities for single mothers and persons with disabilities,” said Nur Sara Dina, owner of Dough by Sara Bakery. 

To help more businesses like Sara’s, Google has launched Local Opportunity Finder to provide personalized tips for business owners to make the most out of their Business Profile on Google Search and Maps.