The barriers to digitalisation

The government introduced the Malaysian Digital Economy Blueprint early this year and set its sights on the Malaysian Digital Project (MyDigital) to create 500,000 jobs by 2025 and to contribute 22.6 percent to the country’s Gross Domestic Product or GDP.

This is in line to be the leader in the regional digital economy. But Malaysian companies are slow in adopting digitalisation including mastering high-tech research and development (R&D) capabilities and applications.

This is evident as World Bank data in 2018 showed that Malaysian enterprises were lagging behind the global average in terms of the pace of digitalisation. In a June 2021 report,
the World Bank stated that only a third of Malaysian enterprises have gone digital.

According to a joint survey by Huawei and the Malaysian government in 2018, only 46.1 percent of SMEs adopted electronic finance and accounting systems. Only 14 percent had electronic inventory management and 11 percent had order fulfillment software.

Only a small number of SMEs adopted advanced digital technologies that can significantly improve their business performance. As an example, only 44 percent and 54 percent of SMEs use cloud computing and data analysis respectively.

The biggest challenge facing SMEs in the country from going digital was the lack of financing and workers’ skills – with about 50 percent of them listing capital as their main setback, while 60 percent had no idea about any relevant financing methods.

Another major barrier was Malaysia’s Internet speed and price, where 44 percent of the SMEs stated it deterred them from using cloud services. SMEs also stated that about 48 percent of their employees lacked the skills required to go digital.




This site uses Akismet to reduce spam. Learn how your comment data is processed.