National Policy Development On Digital Economy
Publication of Information and Communication Technology Satellite Account (ICTSA) 2020 by Department of Statistic Malaysia (DOSM)
- Digital economy has been identified as one of the Key Economic Growth Area (KEGA) to realise the Shared Prosperity Vision (SPV) 2030, leading Malaysia towards developing sustainably, with fair economic distribution as well as equitable and inclusive growth.
- In supporting the SPV 2030 and leveraging on the opportunities brought about by COVID-19 pandemic, the Government of Malaysia has undertaken conscience actions of streamlining the many key policies and efforts that lead to the ultimate development of digital economy in Malaysia, namely via the MyDigital agenda introduced on 19 February 2021.
(1) The Policy - MyDIGITAL
- The MyDIGITAL Agenda was launched on 19 February 2021, to represent the Government aspiration in continuously transforming Malaysia into a digitally-driven and a high-income nation by 2030.
- In line with SPV 2030, MyDigital agenda signifies the long-standing commitment of the Government in promoting digitalisation for economic prosperity and societal well-being.
- Two guiding documents were developed to support the aspiration of MyDIGITAL, namely:
- the Malaysia Digital Economy Blueprint (MDEB) - launched on 19 February 2021; and
- the National 4IR Policy (N4IRP) - launched on 1 July 2021.
- Main targets set to be realised in 2025 and 2030 in both MDEB and N4IRP include:
The Aspiration of MyDIGITAL
(2) The Governance - Council of Digital Economy and the Fourth Industrial Revolution
- The implementation of the MyDIGITAL is steered by the Council of Digital Economy and the Fourth Industrial Revolution (MED4IRN), under the stewardship of YAB Prime Minister of Malaysia.
- The Council is supported by six (6) clusters to focus on key development in the areas of:
- Economic Competitiveness: spearheaded by the Senior Minister of International Trade and Industry;
- Data and Digital Infrastructure: headed by Minister of Communications and Multimedia
- Emerging Technology: chaired by Minister of Science, Technology and Innovation;
- Digital Talent: chaired by Minister of Human Resources;
- Community Cluster: chaired by Minister of Women, Family and Community Development; and
- The Government Cluster: led by the Chief Secretary to the Government.
- Apart from Cabinet Ministers, the Council also comprises representatives from the private sector, industries and think tank luminaries, who will spearhead efforts to continue the nation development, focusing on intensive digitalisation cutting across all aspects of economy and life.
(3) Roles of MITI in Spearheading Economic Competitiveness under the MED4IRN
- Under the governance structure of MED4IRN, MITI is leading the “whole-of-nations efforts” to boost economic competitiveness through digitalisation (namely via Economy Cluster chaired by YB Senior Minister of MITI).
- Priority areas of the Economy Cluster fall under the following aspects:
- Entrepreneurship: Digital-based business model for businesses (MSMEs, Start-ups, Unicorns);
- Investment: Strategic and quality investment in digitalisation;
- Internationalisation/Trade : digital integration actions at the regional level, to facilitate cross-border trade and investment and lower the operating barriers for businesses.
- Regulatory Approach: Agile regulations for digital economy activities.
- As it is, the Economy Cluster has set pace for digitalisation in entrepreneurship and investment. Flagships in this context that had been endorsed by the MED4IRN on 22 April 2021 were:
a. The Second National e-Commerce Strategic Roadmap, 2021-2025 (NESR 2.0)
- An action plan for the next phase of developing e-commerce ecosystem in Malaysia, in line with MyDigital aspirations. The first NeSR (2016-2020) has transformed the nascent e-commerce industry into an integrated ecosystem from buyer to seller.The NeSR 2.0 includes strategic policy interventions in adoption, market access, integrated ecosystem and agile regulations.Being anchored by MDEC and MITI, NeSR 2.0 envisioned to realise the target of empowering 875,000 businesses adopting e-commerce by 2025.
The Highlights of NESR 1.0 Achievements
Summary of NESR 1.0 Achievements
b. Formation of the Digital Investment Office (DIO)
- DIO is a collaborative effort between the Malaysian Investment Development Authority (MIDA) and Malaysia Digital Economy Corporation (MDEC). The two agencies jointly lead and streamlineinitiatives towards realising the MyDigital target of RM70 billion investment in digitalisation by 2025.In gist, DIO provide investors with:
- End-to-end facilitation covering pre and post project implementation.
- Engagement with relevant stakeholders to assist in facilitating the project at the federal and state levels.
- The ‘one-stop’ digital portal branded as Malaysia as the Heart of Digital ASEAN (MHODA) has gone live under the establishment of DIO to serve its purpose in allowing swift decision making in handling investors’ needs and assuring investors to firm-up investment plans and proceed on the project implementation. The portal is accessible via https://www.heartofdigitalasean.my
Leading Transformation: Economy Cluster Under MED4IRN
1. Governance Structure
- MITI is leading the Economy Cluster of MED4IRN to ensure the success implementation of the initiatives under the Thrust 2 of MDEB i.e. Boost Economic Competitiveness through Digitalisation.
- Since the MDEB’s inception, MITI has been working closely with other Ministries, agencies, and representatives from private sector and academia to finalise the initiatives under the Economy Cluster and ensure the success of the initiatives’ implementation.
- The roles and functions of MITI as the Economy Cluster lead is crucial to undertake the policy development of digital economy and 4IR, specific to areas related and may bring impact to the economy. MITI also responsible to:
- Oversee the implementation of the Malaysia Digital Economy Blueprint and National 4IR Policy initiatives corresponding to the scope of Economy Cluster;
- Address issues related to the digital economy and 4IR within the scope of this Cluster; and
- Facilitate and strengthen the cooperation and coordination between Ministries, agencies and industry through the Cluster’s Initiative Working Groups (IWGs) to ensure the effective implementation of programmes and projects at the national and sectoral levels.
- Besides being the lead of Economy Cluster, MITI is also the Programme Lead for two initiatives focusing on the area of digital entrepreneurship and internationalisation.
2. Facilitation of digital investment to Malaysia through the Digital Investment Office
- Digital Investment Office (DIO), which was officially launched on 2 August 2021 is a collaborative effort between the Malaysian Investment Development Authority (MIDA) and MDEC which entrusted to spearhead digital investment in Malaysia.
- Tech companies that intend to establish their operations in Malaysia as well as existing companies that may wish to further expand digital/tech related operations in the country, DIO will streamline and expedite investment strategy among the respective stakeholders to suggest value proposition, best location decision, availability of tax incentive package and other matters on digital investments.
- DIO provides end-to-end facilitation covering pre and post project implementation. This includes providing information on the opportunities of digital investments, until the implementation of the project. DIO will also assist to identify the relevant stakeholders to assist in facilitating the project by leveraging on the existing resources/committee/task force.
Press release on the establishment of DIO:
3. ASEAN Online Sales Day (AOSD)
- The ASEAN Online Sale Day (AOSD) initiative is a collaboration of all ten ASEAN member states under the ambit of ASEAN Coordinating Committee on e-Commerce (ACCEC), implementing the aspiration of ASEAN e-Commerce Agreement which was signed in 2019.
- The Committee was established to coordinate ASEAN responses in developing the e-commerce agenda of each country as well as capitalising on the collective e-commerce potential of the region. The ACCEC aims to have this event an annual ASEAN-wide e-commerce agenda involving e-commerce businesses and platforms.
- The AOSD is in line with the initiative under MDEB in integrating MSMEs into the regional trade.
- During the first AOSD in 2020, Malaysian businesses that participated in the campaign enjoyed 608,696 transactions with 46,127,027 products from various categories marketed. Over RM101,595,462 in sales turnovers was generated throughout the one-day event
- The AOSD 2021 marked another success story for Malaysian businesses during the three-days event from 8 to 10 August 2021. With the participation from 54 local e-commerce platforms, the AOSD 2021 recorded Gross Merchandise Value (GMV) of RM82.5 million with export value recorded at RM13.8 million. The event attracted participation from 63,434 SMEs and 873,329 total transactions recorded.
ASEAN Online Sale Day Portal: https://onlineasean.com
Press release on Malaysia’s participation in AOSD 2021:
- Malaysia Digital Economy Blueprint: https://www.epu.gov.my/sites/default/files/2021-02/malaysia-digital-economy-blueprint.pdf
- Malaysia, Heart of Digital ASEAN: Digital Investment Office: https://www.heartofdigitalasean.my
- SME Digital Accelerator: https://mdec.my/digital-economy-initiatives/
- Soft Financing Scheme for Digital and Technology: http://www.midf.com.my/index.php/en/what-we-do-en/sme-financing
- Go-eCommerce Portal: https://mdec.my/go-ecommerce/