Digital transformation to contribute RM39b to GDP by 2021

By KEVIN WONG / Pic By MUHD AMIN NAHARUL

THE digital transformation initiatives, which are currently taking place, are expected to add an estimated US$10 billion (RM39.1 billion) to Malaysia’s gross domestic product (GDP) by 2021.

A joint study between Microsoft Corp and International Data Corp Asia-Pacific also reveals that the contribution would subsequently grow by 0.6% annually.

The study also predicted a dramatic acceleration in the pace of digital transformation across Asia’s economies.

Last year, about 7% of the country’s GDP was derived from digital products and services, created directly through the use of digital technologies, such as mobility, cloud, the Internet of Things and artificial intelligence (AI).

“Malaysia is clearly on the digital transformation fast track,” Microsoft Malaysia MD K Raman (picture) said.

He added that within the next four years, 45% of Malaysia’s GDP are expected to come from digital products and services.

“At the same time, organisations in Asia Pacific are increasingly deploying emerging technologies such as AI as part of their digital transformation initiatives, and that will accelerate growth even further,” he said.

The study indicated 85% of organisations in Malaysia are in the middle of their digital transformation journey. However, only 7% in the entire region can be classified as leaders.

Raman said that these organisations have either full or progressing digital transformation strategies, with at least a third of their revenue deriving from digital products and services.

“In addition, these companies are seeing between 20% and 30% improvement in benefits across various business areas from their initiatives,” he added.

He said digital transformation will also bring many benefits to the country.

“It will definitely provide new opportunities as the people can leverage on the digital platform to increase their individual income. Many entrepreneurs use the digital platform to market their products and services, as well as skills online.

“In addition to that, we have seen that through digital transformation, it has created future high-value jobs for individuals. So, in the next three years, 96% of jobs in Malaysia will be transformed,” Raman said.

Respondents from the study also believe that as they move towards digital transformation, the job landscape will definitely change.

“From the data, this means a lot of workers will need to be retrained and upskilled. Meanwhile, new roles will be created.

However, this should not be seen as a job replacement, but as a job transformation. “And if you look at the numbers of new roles being created, it somewhat balances off the jobs that will either be outsourced or automated,” Raman said.

He added that the rise of digital transformation in Asia- Pacific economies will affect the labour market where many types of jobs will evolve and change.

“What is encouraging is that 76% of the study’s respondents are confident that their young professionals already have future-ready skills that will help them transition to new roles.

“At the same time, governments and organisations should still focus on reskilling and upskilling because continuous learning will be important in ensuring a successful workforce transformation for the digital age,” Raman said.

He added that with the current digital platform, there has been a greater accessibility to more education and training online.

“Today, anyone can get access to online education or training anytime and anywhere, where they can increase their skills and be prepared for future work in the age of digital transformation,” he said.

The study also revealed that more than half of the jobs in the market today will be redeployed to higher value roles, or reskilled to meet the needs of the digital age.

The survey was conducted among 1,560 business decision makers in mid- and largesized organisations across 15 economies, which include 100 respondents from Malaysia.