Resilience key in ensuring seamless digital economy transition

Malaysia is taking a comprehensive and integrated approach involving multiple stakeholders, including the govt, private sector and academia

by AFIQ HANIF

MALAYSIA has to build a resilient digital infrastructure that could withstand and recover from unexpected disruptions, such as cyber attacks, to support the country’s growing digital economy ecosystem, industry experts told The Malaysian Reserve (TMR).

Developing resilient digital infrastructure is critical to supporting industries such as e-commerce, financial technology (fintech) and online services, and ensuring the continuity of essential services, such as healthcare, education and public safety.

To achieve resilient digital infrastructure, Malaysia takes a comprehensive and integrated approach involving multiple stakeholders, including the government, private sector, academia and civil society.

Among measures taken by the government is to strengthen cyber security by implementing robust security measures such as firewalls, encryption and intrusion detection systems — aided by deploying a cyber security workforce with the necessary skills and expertise.

Malaysia’s other critical step is building a resilient and redundant network infrastructure to ensure essential services and data can be accessed and transmitted even during disruptions.

Malaysia’s digital infrastructure needs to be resilient to support current and future digital developments. Thus, the government must focus on developing digital talent that meets market demands, said BowerGroupAsia associate director Hafidzi Razali.

“Malaysia will need to have up-to-date laws and policies that encourage resilience, as well as sufficient investments and competition from industry players,” Hafidzi told TMR.

“This will require initiatives to develop the skills and capabilities of the workforce, particularly in areas such as big data, artificial intelligence (AI) and the Internet of Things (IoT),” he added.

While access to the Internet is essential, Hafidzi said a solid digital ecosystem also requires robust safeguards concerning cyber security, data privacy and consumer protection.

Malaysia Global Business Forum (MGBF) founding chairman Nordin Abdullah told TMR that Malaysia has the potential to become a significant player in the global digital economy, given that businesses are aware of cyber threats and able to manage the cyber space in which their supply chains actively operate.

He added that companies must manage cyber threats to avoid losing market share. He also said the business ecosystem in Malaysia needs to be more cyber resilient.

“Based on various reports, we estimate that Malaysia needs to allocate resources to train 10,000 to 20,000 individuals to make the country’s business ecosystem sufficiently cyber resilient,” he said.

Nordin warned that a global shortage of two to four million cyber security workers could leave critical infrastructure and organisations vulnerable to targeted attacks.

According to MGBF co-chairman Rizal Kamaruzzaman, Malaysia has the potential to transform into the global digital economy. However, he emphasised the need to make data-driven decisions that tackle community challenges, which he believes will bring in substantial investments and attract a critical mass of consumers.

“The government needs to support the development of a cyber-resilient business ecosystem, including training a sufficient number of cyber security professionals to protect against targeted attacks,” he said.

Dark Fibre the Future Way

Dark fibre is among the ways to develop resilient digital infrastructure through Internet development in Malaysia. Dark fibre refers to unused fibre optic cables with no traffic or service running on them, essentially making them an unlit Point-to-Point connection.

The potential of dark fibre networks has been gaining attention in recent years as businesses seek greater control over their IT estate and the ability to manage capacity and scale as needed.

To access dark fibre, it must be leased or bought from a network owner or telecom provider.

However, unlike ethernet or lit-fibre services, purchasing dark fibre requires deploying and managing the equipment needed to light it.

One of the most significant advantages of dark fibre is its near limitless capacity, making it an attractive option for businesses with large data requirements like media, manufacturing and banks.

Furthermore, dark fibre offers better resilience and security, as businesses will not share the connection with anyone else.

These benefit businesses dealing with sensitive information and those requiring real-time data, such as financial services, retail or healthcare.

The limitless capacity of dark fibre allows businesses to future-proof themselves against the need for greater bandwidth. Companies only need to maintain and upgrade their equipment as and when required.

With the untapped potential of dark fibre, businesses are exploring this option to gain greater control and flexibility over their networks. As a result, the demand for dark fibre will increase in the coming years as businesses seek a reliable and secure network infrastructure.

High Cost of Passive Infrastructure

Former Jaring Communications Sdn Bhd CEO Dr Mohamed Awang Lah told TMR that there is a need to address the high cost of passive infrastructure, including dark fibre and towers, to improve the quality of telecom services and reduce the existing pseudo monopolies in the sector.

“While discussing issues related to Digital Nasional Bhd (DNB) governance and monopoly, the government needs to know that the most fundamental problem related to dropcalls and slow broadband was the high cost of passive infrastructure, which had led to cherry picking in many areas,” he said.

According to Mohamed, DNB could focus on building and leading passive infrastructure to reach all populated areas, including providing open access to dark fibre.

“The existing DNB’s 5G equipment could be auctioned out to let telecommunication companies (telcos) do 5G on their own, which could improve competition and quality of services,” he said.

He said open access dark fibre in all areas could future-proof backhaul costs, reduce the barrier of entry for telcos, improve competition and reduce end-user prices.

“Denying leasing of dark fibre is very inefficient and continues to create pseudo monopolies for fibre,” he said.

He added that dark fibre is a necessary monopoly to enable sharing of the most expensive part of telecom infrastructure, similar to roads and highways for transport services.

“It should be owned and operated by a government entity on a not-for-profit basis, as it uses government roads. This would reduce road damages and speed up the approval process,” he said.

MyDigital Corp CEO Fabian Bigar told TMR that five “needle-movers” will be vital in achieving the agency’s goals to transform Malaysia into a digitally-driven, high income nation and a regional leader in the digital economy.

Among the movers include public sector data sharing and services, digital transformation of the public sector, enabling data-driven decision making and modernising service delivery.

Additionally, private sector data flows will generate more economic value than traditional trade, and building enabling digital infrastructure is fundamental in advancing the digital economy.

“MyDigital also aims to increase the adoption of e-payments as it moves towards a cashless society, which will catalyse digital society and e-commerce.

“Digital ID and digital signatures will facilitate efficient and secure digital transactions, improving Malaysia’s digital adoption,” he said.

The Institute for Democracy and Economic Affairs (IDEAS) said that strengthening Malaysia’s skill supply will prepare the services and manufacturing sectors for Industrial Revolution 4.0 (IR4.0).

The policy recommendations include encouraging greater collaboration between the private sector and training institutions, focusing on upskilling and reskilling people already in the workforce, and streamlining Malaysia’s current Technical and Vocational Education and Training (TVET) programmes.

Significant Drivers

Both manufacturing and services represent significant drivers of employment in Malaysia. However, the services sector currently represents the largest employer in Malaysia’s labour market in the third quarter of 2022 (3Q22), with 81% of formal workers employed in the sector.

The second biggest employer is the manufacturing sector, with about 12% of the formal workers based within this sector.

Breaking down the skill-sets needed across the economy, it was found that semi-skilled workers represented 62.3% of the Malaysian workforce, while skilled workers represented about a quarter.

IDEAS CEO Dr Tricia Yeoh said as an upper middle-income country, a sizeable semiskilled workforce backed by a growing skilled workforce is seen as a healthy sign.

“Nevertheless, as Malaysia is expected to become an aging society in the next decade, with already more than 7% of Malaysia’s population aged 65 and above as of 2020, there is an urgency to develop our skilled workforce before we enter into the aged society status, where the trend would be irreversible,” she said.

As observed by IDEAS, one major factor hindering Malaysia’s ongoing development is the need for more skilled workers.

Given that skills today are both emerging and becoming redundant rapidly, Malaysia’s ability to identify and create those skills must be just as fast.

Besides focusing on technical skills, the Malaysian education system should shift towards a more holistic model that imparts necessary soft skills such as communications, marketing, teamwork and leadership.


  • This article first appeared in The Malaysian Reserve weekly print edition