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 The 2018 Budget has quite a few incentives that will boost the digital economy in Malaysia. FILE PIC
The 2018 Budget has quite a few incentives that will boost the digital economy in Malaysia. FILE PIC

DESPITE murmurs from the local information and communications technology (ICT) fraternity, the 2018 Budget tabled last Friday by Prime Minister Datuk Seri Najib Razak has quite a few incentives to spur the industry and boost digital economy in the coming year.

Although there were no measures to lower the rate of broadband services, or Goods and Services Tax exemptions on ICT products and services to encourage more purchase, as suggested by industry observers in their wish list, it is still a tech-friendly budget overall, which reflects the government’s continued commitment to help the sector grow further.

A key touch point of the budget is the effort to fortify the digital economy with the implementation of the Malaysia Digital Policy to foster growth. This further complements the prime minister’s recent announcement of a Cloud First strategy, as part of the initiatives to the national agenda, beginning with the public sector. He had said then that Malaysia would develop its own National Artificial Intelligence (AI) Framework, which would be an expansion of the National Big Data Analytics Framework. Its development would be led by the Malaysia Digital Economy Corporation (MDEC).

Najib also said that in a hyper-connected world, AI would be the defining force of the fourth industrial revolution (4IR), and it could well be the game-changer in improving the lives of Malaysians.

All these are certainly steps in the right direction to bolster the country’s strategic ICT thrust, and a very exciting future for Malaysia. A growing digital economy needs a strong support structure and ecosystem to thrive. As businesses in Malaysia look for better and faster ways to leverage on 4IR and transform themselves, modern technologies such as cloud computing will have a crucial role to play.

The budget pays attention to the upgrading of ICT equipment and communications systems, which would be crucial for a strong digital infrastructure for businesses. Additionally, rebate on purchase of ICT equipment and software development will lower the entry barrier for adoption of digital technology among small- and medium-sized enterprises (SMEs) and corporations.

The government is also placing more emphasis on human capital development next year, especially on coding in schools; STEM education, with RM250 million for teachers’ training and RM190 million to upgrade 2,000 classes into a 21st century smart classrooms to boost creative-based learning and innovative thinking.

This is certainly a wise and forward-looking move. Empowering education, skill and talent development in the country is in line with the government’s recent announcement on its plan to transform the nation to become a key player in 4IR through technology innovation and digitisation as well as AI.

Another notable announcement is the allocation of RM200 million for training programmes, grants and soft loans for SMEs. Considered the backbone of the nation’s economy, it is hoped that industry players will make full use of the allocations to boost their capabilities and competitiveness, especially in the area of digital technology and innovation. To compete with the bigger boys and on the global scene, local SMEs will need to look beyond traditional methods to succeed.

Industry players also welcomed measures introduced by the government to expand digital initiatives under MDEC. The development of the Digital Free Trade Zone (DFTZ) hub at the Kuala Lumpur International Airport (KLIA), for example, is poised to help Malaysia edge closer to its digital economy vision, while improving the livelihood of Malaysians through growing job and entrepreneurship opportunities. 

All said, as far as tech incentives are concerned, the 2018 Budget is aimed at boosting and transforming the economy, while creating more income sources for the people through new ways of doing things. They also emphasise the government’s commitment to make digital economy a key engine of growth for Malaysia.

But, there’s always room for improvement and there are areas that need looking into, such as expanding broadband coverage beyond major urban and suburban centres to rural locations, lowering the rates, and, GST exemption on ICT products and services. The 2018 Budget may not please every one, but it has what it takes to spearhead the nation towards a better digital future.

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Ahmad Kushairi is editor of BOTs, the weekly tech section in Life&Times. Trained in Maths, he has since traded his problem-solving skills with writing about how tech has helped to transform the world for the better.

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