Malaysia must consider a multifaceted approach to secure its position as an AI hub in SE Asia

IN THE rapidly evolving digital economy landscape, harnessing technological advancements for sustainable and inclusive growth is vital. In my previous article, I delved into the transformative potential of the digital realm, highlighting the many ways it has reshaped industries and empowered businesses.

This time, I want to shift the focus to a subject currently generating waves of excitement and intrigue: Artificial intelligence (AI).

AI is a term that calls to mind a myriad of images and notions. For some, it evokes visions of world-dominating robots, while others might associate it with the fear of machines replacing human workers. However, it is crucial to demystify these preconceived notions and recognise the power of AI that can be harnessed for the greater good.

A McKinsey & Co study predicted that AI could contribute to the global GDP by US$13 trillion (RM62.24 trillion) by 2030, with most of the gains coming from the workforce. The same study also stated that AI will create millions of new jobs, particularly high-skilled ones such as engineering, healthcare and data science.

AI is not about replacing humans. It is about augmenting our capabilities, pushing the boundaries of what is possible and creating new opportunities across various industries. It is the driving force behind innovations that are reshaping businesses and industries, unlocking innovative products and services, and fostering sustainable and inclusive growth.

Across numerous sectors, AI is revolutionising business operations. It enables predictive analytics, personalised customer experiences and data-driven decision-making, enhancing efficiency and productivity.

The Impact of AI on Key Sectors

Finance and banking: AI has disrupted traditional financial services by enabling smarter, data-driven decisions. In Malaysia, banks have deployed AI-driven chatbots for customer service and fraud detection algorithms to enhance security. AI also plays a crucial role in credit scoring and risk assessment, facilitating access to financial services for a broader section of the population.

Healthcare: The healthcare sector has seen significant benefits from AI. Malaysian hospitals have adopted AI-driven diagnostic tools that assist doctors in making more accurate diagnoses and treatment recommendations. Telemedicine platforms, powered by AI, have expanded access to healthcare services, especially in remote areas.

Manufacturing: Malaysia’s manufacturing sector, a vital contributor to our GDP, has embraced AI to improve efficiency and competitiveness. Robotics and AI-powered automation have optimised production lines, leading to higher-quality products and reduced costs. Predictive maintenance powered by AI has also reduced downtime in factories.

Retail and e-commerce: E-commerce platforms in Malaysia have harnessed AI for personalised recommendations, efficient supply chain management and fraud prevention. AI-driven chatbots and virtual shopping assistants have improved customer engagement by tailoring personalised shopping experiences.

Transportation and Logistics: AI is reshaping transportation and logistics in Malaysia, with applications ranging from route optimisation for delivery services to the development of autonomous vehicles. This transformation is not only enhancing efficiency, but is also reducing the environmental impact of transportation.

Tapping New Market Opportunities with AI

AI is not just benefitting major industries. It is also fostering the creation of entirely new ones.

Startups and innovators are leveraging AI to pioneer groundbreaking solutions, from autonomous vehicles and virtual assistants to personalised education platforms and AI-powered creative content. These innovations not only create new economic opportunities but also contribute to a more inclusive digital economy, bridging gaps and expanding access to technology-driven services.

For instance, Malaysian startup eMooVit Technology is developing autonomous vehicle driving solutions. It uses AI-powered software solutions to turn certain vehicles into autonomous systems, which can be deployed in a variety of applications, such as first/last mile transportation, logistic transportation and agriculture solutions.

Naluri Life on the other hand is a digital health company that uses AI to help people improve mental and physical health. The AI platform provides personalised coaching and support to help people reach their health goals.

Malaysia’s Standing Amid Global Competition

With all the vast benefits that AI poses, Malaysians may wonder how their nation fares against others on the global AI stage. Malaysia is currently ranked 44th in the Global AI Index.

While Malaysia’s presence in the AI landscape is certainly notable, we are still falling

behind some of our neighbours. Countries like Singapore (ranked 3rd) and Indonesia (ranked 36th) have forged ahead in their AI endeavours. Although Malaysia’s ranking is not at the forefront, we are steadily making progress in our AI development journey.

However, there is a consensus that more concerted efforts and investments are needed to enable us to harness the full potential of AI for socio-economic growth. In light of Malaysia’s position in the Global AI Index, it is clear that there is still work to be done to bridge the gap with more advanced nations in AI technology and implementation.

Inclusive Digital Economy with AI Upskilling

With the ever-increasing emphasis on AI across diverse industries, it is imperative to ensure that all Malaysians have equal access to job opportunities emerging in fields that demand digital skill sets, particularly in AI.

Fostering an inclusive digital economy is not merely a matter of technological advancement; it is about ensuring that the benefits of this transformation reach every segment of society. To achieve this, it is essential to provide avenues for individuals from various backgrounds to equip themselves with the knowledge and skills necessary to thrive in AI-driven businesses.

This is precisely why investing in the upskilling of our workforce is paramount. By empowering Malaysians with the tools and expertise in AI that can be effectively applied to their respective fields, we not only bridge the digital divide but also bolster the nation’s digital economy.

These efforts will not only create a more competitive and dynamic workforce, but also lay the foundation for sustained economic growth, innovation and societal wellbeing. In a rapidly evolving digital landscape, the upskilling of our workforce is not a luxury, but a strategic imperative that will shape Malaysia’s future in the AI-powered global economy.

Malaysia is actively pursuing efforts designed to cultivate an AI-skilled workforce. The Malaysia Artificial Intelligence Roadmap (AIRmap) outlines the government’s commitment to AI adoption, including initiatives like AI Centres of Excellence and education funding support. The MyDigital Blueprint is steering Malaysia towards becoming a digital economy leader by 2025, with specific measures to bolster the AI ecosystem and support AI startups.

TalentCorp and the Malaysian Digital Economy Corp (MDEC) are actively promoting AI talent and industry growth through various programmes. Furthermore, academic institutions are contributing to the knowledge base by offering AI courses and establishing AI research centres.

Malaysia’s Pursuit of a Thriving AI Hub

To secure our position as an AI hub in SouthEast Asia, we must consider a multifaceted approach. Here are some strategies that can play a pivotal role in achieving this goal:

International collaboration: We must actively seek partnerships and collaborations with other AI research hubs globally. By participating in international AI initiatives, sharing expertise and fostering research collaborations, we can facilitate knowledge exchange, attract global talent and accelerate our AI capabilities. Engaging in joint projects and initiatives can help us tap into a global pool of AI expertise and resources, further strengthening the AI ecosystem.

Startup ecosystem: Nurturing a vibrant startup ecosystem is essential for driving innovation in AI. Malaysia can support startups through funding opportunities, mentorship programmes and incubation initiatives. Providing a conducive environment for AI-driven startups to flourish can lead to groundbreaking innovations and solutions that have the potential to transform industries.

AI in government services: By integrating AI technologies into public sectors like healthcare and education, Malaysia can improve the quality and efficiency of these services. For example, AI-driven healthcare solutions can enhance patient care and diagnostics, while AI-powered educational tools can personalise learning experiences. Such implementations not only benefit citizens but also set an example for AI adoption, encouraging the private sector to follow suit and embrace AI technologies.

AI for sustainable development: By harnessing AI’s capabilities in areas such as environmental monitoring, resource management and climate modelling, Malaysia can make significant contributions to global sustainability efforts. Demonstrating a commitment to using AI for good can enhance Malaysia’s reputation as an AI hub with a focus on responsible and sustainable development.

The potential of AI goes far beyond the dystopian narratives often associated with it. It is a transformative force that, when harnessed responsibly, has the capacity to drive sustainable and inclusive growth in ways that were once unimaginable. AI is not a harbinger of a dystopian future but a beacon of opportunity, propelling industries forward and fostering inclusive growth.

AI has already begun to revolutionise the Malaysian digital economy, creating opportunities for growth and innovation across sectors. The journey has just begun, and the future holds boundless possibilities for Malaysia’s digital transformation through AI.

• Mahadhir Aziz is the CEO of Malaysia Digital Economy Corp (MDEC).

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