Digital leap: MDEC shows SMEs ‘how’

Digital leap: MDEC shows SMEs ‘how’

By Ayisy Yusof – June 24, 2020 @ 8:55am
New Straits Times

CYBERJAYA: The digital economy is expected to contribute around 20 per cent to Malaysia’s gross domestic product this year, according to Malaysia Digital Economy Corp (MDEC).

MDEC chief executive officer Surina Shukri said the digital economy had been growing steadily over the last two years with an overall RM270 billion contribution, or 18.5 per cent, recorded at the end of 2018.

“We expect continued growth in the digital economy. We want micro-entrepreneurs and small and medium enterprises (SMEs) to propel the economy forward, leveraging digital technology for a wider reach, enhancing productivity and saving costs,” she told the New Straits Times in an interview yesterday.

She said most businesses transformed digitally “by default” due to the pressures exerted by the Covid-19 pandemic and restrictions in movement.

“Businesses are now no longer asking why they need to transform digitally, but rather focusing on how to adopt digitally. This is a big change for local businesses as the momentum is very encouraging.

“For us (MDEC) and our partners, we are scrambling to ensure we can provide the how. Hence the accelerator training programme like e-usahawan is meant to help provide the how.

“We capitalise on the momentum to accelerate/enable the digital adoption. SMEs need to dedicate their time and resources to adopt digitally and make this switch.”

She said e-commerce was a big part of the digital economy and predicted the GDP contribution from the platform would reach RM170 billion this year.

Surina said the digital adoption in business was a broad journey involving online presence, e-commerce, digital operations (goods and services), digital process and adoption of advanced technology.

“We focus on onboarding SMEs on the digital platform where business operators can market their goods and services online to reach wider markets.

“We see a healthy trend among local micro-entrepreneurs and SMEs embarking on this digital transformation,” she said, adding that this platform was less capital extensive.

Surina said MDEC had seen a 40 per cent spike in fast-moving consumer goods via the e-commerce platform in the last three months.

“During the Movement Control Order people had limited access to physical stores as most malls/shops were closed.

“This business-to-consumer market is expected to triple in the next four to five years,” she said.

MDEC said Malaysia’s cross-border e-commerce exports within the Southeast Asia region for products and services totalled RM500 million since 2017.

Surina said roughly 44 per cent of more than 900,000 local SMEs had adopted digital technology via e-commerce since 2018.

Prime Minister Tan Sri Muhyiddin Yassin recently unveiled the short-term Economic Recovery Plan (Penjana) with 40 initiatives worth RM35 billion, focusing on three main components: empower the people, propel businesses and stimulate the economy.

The bulk of the allocation was aimed at job security, in particular for those in the gig economy, reskilling and easing cash flow for businesses, with a strong emphasis on accelerating the growth of the digital economy.

“Digital technology transformation highlighted in Penjana is all about helping businesses to be better, faster and cheaper.

“There is also a capability-building programme under Penjana to help SMEs go on this digital journey.”

The government has entrusted MDEC to spearhead the onboarding of micro-entrepreneurs and SMEs to participate in e-commerce with a RM140 million matching grant.

The grant will be used for training sessions, vendor subsidies and sales assistance.

Additionally, a RM2 billion fund will be dedicated to reskilling and upskilling programmes for 200,000 youth
and unemployed workers to enhance employability.

Participating agencies include MDEC, the Human Resources Ministry, Entrepreneur Development and Cooperatives Ministry, Agriculture Ministry, Higher Education Ministry, Malaysian Investment Development Authority, Majlis Amanah Rakyat and Khazanah Nasional Bhd.

MDEC has also been allocated RM35 million to spur the digital creative content industry and another RM25 million for the Global Online Workforce (GLOW) programme. GLOW is aimed at training Malaysians to earn an income as freelancers in the global digital economy.

It is also a sub-programme under MDEC’s eRezeki initiative, which provides training, coaching and mentoring to individuals with skills in certain areas such as programming, creative design, business and administrative support, and language-based tasks.

She said the GLOW programme would be launched in August. It is expected to benefit 10,000 individuals (freelancers), guiding them to market their services globally.

“This helps the group to generate higher online revenue while reaching international customers.

“To date, the programme has received nearly 53,000 participants with an overall revenue of over RM168 million.

“Through this programme, we want to support the growth of the gig economy and the welfare of workers in the sector by providing new job opportunities,” she said.

The gig economy has been a growing segment of the economy, especially among the younger generation.

The growth is also expected to continue this year due to the rising unemployment rate.

The three-month training programme will be available online following the government’s mandate to encourage the adoption of e-commerce by micro-entrepreneurs and SMEs.