What new Initiatives is PIKOM currently involved in?
SALEH: PIKOM has been around for the last 25 years. We put together a lot of events and exhibitions such as the PC Fair, Digital Lifestyle Expo, and the World Cyber Games. One of our key initiatives is centered on thought leadership. Every year we host the Thought Leadership Event, SME Business Success with ICT Series, and many more workshop seminar conferences. Another initiative that PIKOM is involved in focused towards CSR. We hold charity golf events, charity runs, and the EDM dinner. Also, on May 26th, we launched the ICT Mall at Cap Square. Furthermore, we will bring our flagship PC Fair to be replicated regionally outside of Malaysia. More specifically, we are planning to place a Malaysian company somewhere else in the region or abroad, such as Sri Lanka and the Middle East. Therefore, the PC Fair International is something new that we have announced that we are doing this year. The second part of the new initiative is becoming involved in some EPPs (Entry Point Projects) that have been brought forth by the government in order to lower our carbon footprint and boost the e-ways industry. We are trying to carry out the green initiative or develop green ICT. Lastly, we are now collaborating with MSPC Malaysia (Malaysia Service Providers Confederation), which has been newly formed to take care of the e-services industry and to look at how to utilize technology to increase effectiveness and efficiency in running their businesses. We would then collaborate with MSPC to go into services, research, and policy advocacy.
What is the ICT’s sector’s contribution to the overall GDP of Malaysia? How do you see this evolving over the next 2-5 years?
SALEH: The ICT sector has been growing by more than double digits at roughly 15%-20%. We have been growing about 8%-10% per annum. This year we are also anticipating an 8%-10% growth in the ICT industry. We are still credible and contributing faster than the country is growing. We are trying to make sure that we are contributing to the EPPs (Entry Point Projects) of the Economic Transformation Programme (ETP). Our goal is to contribute up to 15% of the country’s GDP by 2020.
How does Malaysia’s technological competency and capability compare to that of its regional neighbors? Which areas of the sector require more focus in order to improve the country’s ICT infrastructure and to position Malaysia as a global ICT hub?
SALEH: Many studies have indicated that Malaysia is one of the most attractive countries to invest in ICT. However, there are some areas in the ICT sector here that are facing challenges. More specifically, I would like to highlight broadband. Although we are growing, we need to look at broadband adoption. We have to consider how broadband is being utilized and implemented. Furthermore, we have to look at the pricing of it coupled with its overall quality. By doing this, we would drive the growth of the real usage and the real GDP. Every 10% adoption on broadband will contribute 1% of the total GDP. As a result, we are currently focusing on this area. Secondly, human capital is another big challenge. While our graduates are being sought after, there is still a shortage of selective skills to meet industry requirements that are being put in place by these new initiatives. There is a mismatch. We need to really look at the readiness of fresh graduates as they enter into the market place.
PIKOM recently released a report forecasting the average salary of ICT professionals in Malaysia to be RM 6,800 ($2,155) in 2012. Although this number has increased over the past 2 years, what actions or incentives are being implemented to prevent loss of talent to regional neighbors such as Hong Kong and Singapore where the average salary in their ICT sectors is almost 3 times greater than that in Malaysia?
SALEH: It is inevitable that higher salaries will attract talent. We just released the survey and although it is healthy, we are not as good as some of the other developed countries in the region. That being said, the average salary increased by 10.8% last year and we are anticipating this number to grow by another 9% this year. We do have a brain drain challenge, where talent will start going to the other English speaking and more developed countries. The positive part is that our growth of 8%-10% in the ICT sector will probably retain some of this talent. This is a good sign considering that some of the other developed nations are only growing by 1%-2% per year. Our role is to make sure that our policy and working relationship with the government creates job opportunities and an environment for entrepreneurs. We have to set the real environment for entrepreneurs to grow. Furthermore, we want entrepreneurs to not just be able to create a local business but also a regional and global business. This is a challenge where the government and the private sector need to collaborate on. Having said that, PIKOM is working very closely with MOSTI and the road map it has laid out for the ICT sector through 2020. We are also working with the newly formed ICT satellite account. We are comparing ourselves by looking at all of the benchmarks that are put into place. Hopefully we can learn from our lessons. We now have statistics to go by and now know what areas we must invest in. We are taking notes from countries like Australia, Chile, and Germany that already have formed an ICT satellite account.
How has the current state of the ICT infrastructure in Malaysia affected the climate for entrepreneurs and business communities?
SALEH: I think we need to look beyond just infrastructure. We need to look at the applications and content that spur real growth and what people need to have in terms of collaboration. R&D and commercialization are extremely important. We have to show that Malaysia is a good gateway into China, India, and the Islamic world. Islamic financing and the Halal hub present a lot of potential for the technology sector. I believe the government is still not spending enough on R&D. We have problems with producing scientists and researchers. However, I think the multinationals can help contribute and solve this issue. They need to collaborate with research within the government and create a formula for a base in Malaysia. We also need to grow our broadband and improve its implementation. Multinationals can also help us with this situation. We are one of the biggest social media users in the region and we need to take advantage of that. Foreigners can establish their offices here in Malaysia and focus on R&D with no restrictions. There have been a lot of acts and incentives put into place to help stimulate growth for entrepreneurs and business communities. PIKOM is right in the mix of this because we are representing more than 40 council communities. We are working together with the services industry that currently contributes 57.7%, according to PEMANDU (Performance Management and Delivery Unit). This 57.7% needs to grow to 65% by 2015 or 2020.
The ICT industry last year was valued at MYR 52.3bn ($16.5bn). It was comprised of a mixture of telecommunications, hardware, software, and services. We are hoping that the industry will grow to MYR 80bn ($25.3bn) in an 8-10 year timeframe.
Which segments or niches in the ICT industry present the best opportunities for growth and investment?
SALEH: We believe that we produce the state of the industry every year. We release an annual strategic report on the ICT sector. Last year’s report shows that there are 6 major areas that present great opportunities for growth and development. They are, cloud computing, unified computing, tablet PCs, green technology, social media, and e-commerce. This year is quite similar. There is more involvement in how to do cloud computing. More specifically, we are directing our attention to the virtualization of the private cloud. Furthermore, social media and e-commerce are the main key areas that we are suggesting to our members to focus on. PIKOM is involved in two of the EPPs (Entry Point Projects) that have been put into place by the government. We are taking the lead with Outsourcing Malaysia. Outsourcing in Malaysia has experienced growth upwards of 20%. It is indeed growing very fast. The last one is e-commerce. I believe that e-commerce has been growing even more than outsourcing, at 20%-30% within the 8%-10% growth of the ICT sector. The ICT industry last year was valued at MYR 52.3bn ($16.5bn). It was comprised of a mixture of telecommunications, hardware, software, and services. We are hoping that the industry will grow to MYR 80bn ($25.3bn) in an 8-10 year timeframe. With regards to the ICT industry, PIKOM has been really focusing on e-commerce, social media, and the mobile space. We would like to spur a lot of collaboration and we can see that these are niches in the industry that are growing really fast. We understand that going regional and global is going to be key. In other words, we should not just look at the market here in Malaysia, but also the rest of Asia. We need to have more of a global mindset. The government has done well with its new initiatives but the next step focused towards implementation. We are now a knowledge economy. We need more skilled workers to meet the requirements of these initiatives and the universities will play a huge role in providing that.