MASSA Forthcoming Events

a. 2 December 2021 — Doing Business in ASEAN: Why Malaysia Should Be Your Choice

For more information, please contact the MASSA Secretariat at
mail@massa.net.my / massamssc@gmail.com

2 December 2021: Doing Business in ASEAN: Why Malaysia Should Be Your Choice

A M/S Shearn Delamore & Co. webinar in association with MASSA

DATE: 2 December 2021, Thursday

TIME: 4.00 – 5.30 pm (Malaysia Time, GMT +8)

VENUE: Zoom

REGISTRATION: CLICK HERE 

This webinar will cover the following:

• What makes Malaysia an attractive venue for investment within ASEAN
• Overview of key Corporate, IP and Tax laws for doing business in Malaysia
• How we can assist you in growing your existing business or venturing into new markets

Kindly RSVP before 30th November 2021. We seek your understanding that sign-ups are on a first-come-first-served basis due to the holding capacity on the webinar platform which will be hosted by M/S Shearn Delamore & Co.

A Brief on Trade and Investment Opportunities in Bangladesh

Article by:

Md Rajibul Ahsan,
Counsellor (Commercial),
Bangladesh High Commission, Kuala Lumpur
E-mail: commwing.kl@gmail.com

– The full version of the report can be accessed HERE –

1. Bangladesh: An Emerging Economy

Bangladesh is in the north-eastern part of South Asia. Bangladesh belongs to the largest river delta in the world with a total area of 1,47,570 sq. km. The country is ethnically homogeneous where over 98 percent of the people speak in Bangla. English is widely spoken as well. The country is covered with network of rivers and canals forming a maze of interconnecting channels and rich waterways.

Bangladesh has demonstrated rapid progress since independence; continues to show its resilience through the Asian Financial crisis in the ‘90s, the global financial crisis in 2008, and even COVID-19 pandemic. It has been among the fastest growing economies in the world over the past decade, thanks to demographic dividend, strong ready-made garment (RMG) industry, and stable macroeconomic conditions. 

2021 is a special year for Bangladesh. We are celebrating the birth centenary of our Father of the Nation Bangabandhu Sheikh Mujibur Rahman. This is the year we celebrate the golden jubilee of our independence, built on our innate strength and resilience. The 50^th year of independence also marks the year where Bangladesh has been nominated to graduate from LDC status, a testament to the sustainable growth potential of the country.

2. Bangladesh-Fast Facts

Official Name

People’s Republic of Bangladesh

Capital City

Dhaka

Geographical Location
Latitude between 20°34′ and 26°38′ North
Longitude between 88°01′ and 92°41′ East

Boundaries
North- India (West Bengal and Meghalaya)
West- India (West Bengal)
East- India (Tripura and Assam) and Myanmar
South- Bay of Bengal

Demography

Population:    152 million (Census 2011);  166 million (Estimated 2019)

Life Expectancy (yrs), 2019

72.6

Literacy Rate, 2019

74.4%

Religion
Muslims- 86.6%
Hindus- 12.1%
Others-1.3%

Gross Domestic Product (GDP)

(at current market price, 2020)

BDT 27963.8 Billion

USD 330.54 Billion

GDP growth

5.24 (2020)

8.15 (2019)

GDP per capita

USD 1,970 (2020)

Gross Investment

(at current market price, 2020)

BDT 8879.9 Billion

Private: 6608.4 Billion, Public: 2271.5 Billion

Export

USD 33.7 Billion (2020)

Import

USD 54.8 Billion (2020)

Remittance

USD 18.2 Billion (2020)

Foreign Exchange Reserve

USD 36.04 Billion (2020)

Inflation

5.65% (2020)

Exchange rate (BDT/USD)

84.60 (2020)

Principal Crops

Rice, Jute, Tea, Wheat, Sugarcane, Pulses, Mustard, Potato, Vegetables.

Principal Industries

Garments & Textiles (2^nd largest in the world), Tea, Ceramics, Pharmaceuticals, Cement, Leather, Jute (largest producer in the world), Chemical, Fertilizer, Electrical and Electronics, Agriculture, Fishing, etc.

Principal Exports

Garments, Knitwear, Frozen Shrimps, Tea, Leather and Leather products, Jute and Jute products, Ceramics, Pharmaceuticals, IT Services, etc.

Principal Imports

Wheat, Fertilizer, Electrical and Electronics, Petroleum goods, Cotton, Edible Oil, etc.

Export Processing Zones (EPZs)

Total- 8, Chittagong EPZ, Dhaka EPZ, Mongla EPZ, Ishwardi EPZ, Comilla EPZ, Uttara EPZ, Adamjee EPZ, Karnaphuli EPZ

Economic Zones (approved)

Total: 98

Public: 69

Private: 29

3. Global Ranks of Bangladesh

• – Bangladesh is 2nd largest garments exporter in the world.
• – 8th largest country in the world in terms of population.
• – 4th largest Muslim country in the world in terms of population.
• – Bangladesh is the world’s fourth biggest rice producer.
• – Bangladesh ranks 3^rd in inland fish production.
• – Bangladesh ranks 3^rd in global vegetable production.
• – Cox’s Bazaar is the longest natural sea beach in the world.
• – Largest producer of Jute fibre in the world.
• – Sundarbans (hosted by both Bangladesh and India) is the largest mangrove forest in the world.

4. Making strides in growth and development

Despite the pandemic, the government of Bangladesh has been able to maintain the growth pace by achieving the real GDP growth of 5.2 percent which is the highest in Asia. In the last 12 years, the average growth of GDP was 6.6 percent which was above 7 percent in FY2017-2018, 2017-2018 and 2018-2019 and exceeded 8 percent in FY2018-2019.

Figure 1: Growth in South Asian Countries in FY19 (Source: IMF)

Figure 2: Growth in South Asian Countries in FY20 (Source: IMF)

Like elsewhere, the global COVID-19 pandemic has adversely affected the economy of Bangladesh. Growth in export and import in FY2019-20 experienced negative. However, remittance inflows grew by 10.87 percent that contributed to reduce the current account deficit. Foreign exchange reserves have increased significantly. As of June 30, 2020 the foreign exchange reserve stood at US$ 36.04 billion, the highest ever. To keep the country’s economy afloat in the face of the ongoing COVID-19 pandemic, the government has already announced a financial package of abut Tk. 1.2 lakh crore for economic recovery.

5. Bangladesh- Malaysia Bilateral relations

Both Malaysia and Bangladesh have come a long way to consolidate their bilateral relation since the establishment of diplomatic ties between the two countries after Malaysia recognized Bangladesh on 31 January 1972. Besides, location of Bangladesh and Malaysia in the South and the Southeast Asia respectively have brought these two countries closer. Mutual respect, fraternity and co-operation particularly on development activities are increasing with the passage of time.

Malaysia and Bangladesh share common views on a wide range of international issues, as both are being the members of organizations like D-8, G-77, OIC, and Commonwealth. More importantly, Malaysia has stood by Bangladesh as a tested friend throughout the outbreak of the Rohingya crisis particularly in setting up a field hospital in Cox’s Bazar.

As a testament of strong bilateral relations both Bangladesh and Malaysia have agreed to sign a bilateral Free Trade Agreement (FTA) that would encourage trade and cross border investment between the two friendly nations. At the moment, both sides are ready to start FTA negotiation at a mutually convenient time. Besides, a recent Memorandum of Understanding (MoU) signed between Bangladesh and Malaysia on 13 July 2021 to supply Liquefied Natural Gas (LNG) to Bangladesh will pave the way for further economic engagement between Bangladesh and Malaysia.

6. Bilateral Trade between Bangladesh and Malaysia

In South Asia Bangladesh is the second largest trading partner for Malaysia, after India. Although the balance of trade is heavily tilted towards Malaysia, the total trade between Bangladesh and Malaysia has increased to a significant level and our export to Malaysia is also increasing in recent years.

Bilateral Trade between Bangladesh and Malaysia (in million USD)
(Source: Bangladesh Bank)

Malaysian market for Bangladeshi products is not widely diversified. Readymade Garments (knit wear and woven garments) is the main export item that account for more than 70 percent of our total export earnings. The other exportable items are vegetables, potato, food and beverage, footwear, spices etc.

In 2018-19, just before the COVID-19 pandemic, goods exports to Malaysia reached to USD 277 million with a growth of 19 percent. But when the pandemic began in early 2020 the Malaysian economy faced significant challenges coupled with the collapse of the global oil prices and US-China trade war. This impacted Bangladesh’s exports to Malaysia by declining it to USD 236 million in 2019-20. Again, in FY 2020-21 exports picked up and reached an all-time high of USD 306.57 million.

Major import items from Malaysia are mineral fuels and oils, vegetable fats and oils, machinery and mechanical appliances, plastics, chemicals, cotton, rubber, electrical and electronics etc.

7. Malaysian Investment in Bangladesh

Malaysia is the 9^th largest investor for Bangladesh. Total FDI stock of Malaysia in Bangladesh is 825.14 million USD as on end of June 2020. Telecommunication sector (508.69 million) dominates the FDI inflow followed by computer software and IT (244.11 million), construction sector, and textile and wearing sector etc. Too many Malaysian companies have shown their interest to invest in the newly-built Special Economic Zones (SEZs) of Bangladesh. Sector-wise investment statistics are stated below:

Malaysian Investment in Bangladesh, June 2020
(Source: Bangladesh Bank)

To date, a total of 123 Malaysian companies are registered under the Bangladesh Investment Development Authority (BIDA). Some of them are as follows:

8. Investment Opportunities in Bangladesh

Currently the FDI stock of the country is growing very rapidly because of its large population and impressive economic growth over the recent years that is matched by liberal investment policies. Bangladesh is potentially a significant market, especially with access to South Asia and South-East Asia. It presents a rare opportunity for investment. Initiatives to establish 100 Special Economic Zones (SEZs) by 2030 also gave FDI a great boost. Besides, in line with this the government is also implementing some mega infra-structure projects like Padma Bridge, Rooppur Nuclear Power Plant, Dhaka Metro-rail Project, etc.

Investment Areas: Foreign investment is welcome in all areas of the economy with the exception of the four reserved sectors (arms and ammunition, forest plantations, nuclear energy, and security printing). Such investments can be made either independently or through venture on mutually beneficial terms and conditions.

Legal Protection for FDI: In Bangladesh the policy framework for foreign investment is based on ‘The Foreign Private Investment (Promotion & Protection) Act. 1980,’ which ensures legal protection to foreign investment in Bangladesh against nationalization and expropriation. It also guarantees non-discriminatory treatment between foreign and local investment and repatriation of proceeds from sales of shares and profit.

Bilateral Agreements: To invest in Bangladesh Malaysian investors enjoy two existing bilateral agreements, one is for the avoidance of double taxation (April 1983) and the other one is the investment treaty for promotion and protection of investment (October 1994).

Tax Holiday and Tax Exemption:

– 5 to 10 years of Tax Holiday and reduced tax.

– 100% tax exemption on income and capital gain for certain projects under Public Private Partnership (PPP) for 10 years.

– 100% tax exemption from software development, telecommunication and information technology enabled services.

– 50% of income derived from export is exempted from tax.

– Tax exemption on royalties, technical knowhow and technical assistance fees and facilities for their repatriation.

– Tax exemption on interest paid on foreign loan.

Accelerated Depreciation: Industrial undertakings not enjoying tax holiday will enjoy accelerated depreciation allowance. Such allowance is available at the rate of 100 per cent of the cost of the machinery or plant if the industrial undertaking is set up in the areas falling within the cities of Dhaka, Narayangonj, Chittagong and Khulna and areas within a radius of 10 miles from the municipal limits of those cities. If the industrial undertaking is set up elsewhere in the country, accelerated depreciation is allowed at the rate of 80 per cent in the first year and 20 per cent in the second year.

Exemption on Import Duties: Exemption of customs duties on capital machineries and exemption of import duties on raw materials used for producing goods for export.

Bonded warehousing Facilities: For export-oriented industries.

Ownership: 100% ownership is allowed with unrestricted exit policy.

Work Permit: Multiple entry visa will be issued to prospective foreign investors for 3 years. In case of experts, multiple entry visa will be issued for the whole tenure of their assignments.

Repatriation of invested capital and dividend: Full repatriation of capital invested is allowed. Similarly, profits and dividend accruing can be transferred in full. If foreign investors reinvest their dividends and/or retained earnings, those will be treated as new investment.

Others

– No restrictions on issuance of work permits to project related foreign nationals and employees.

– Provision of transfer of shares held by foreign shareholders to local investors.

– 100% FDI, Joint Ventures, Partnerships, PPPs, Non-equity mode (technology transfer, licensing franchising, contracting etc.), and Foreign Lending are allowed.

– 100% FDI or Joint Venture FDIs are allowed to participate in the primary and secondary stock markets.

– Foreign Investors are allowed to have access to local banks for working capital requirements.

– Citizenship by investing a minimum of USD 500,000/- or by transferring USD 1,000,000/- to any recognized financial institution and permanent residency by investing a minimum of USD 75,000/-.

– Special facilities and venture capital support are provided to export-oriented industries under “Thrust sectors”. Thrust Sectors include agro-based industries, artificial flower-making, computer software and information technology, electronics, frozen food, floriculture, gift items, jute goods, jewelry, leather, sericulture and silk industry, stuffed toys, etc.

– Intellectual Property right is protected by law.

– Duty free market access to EU & most developed countries.

9. Reasons of recent surge in Foreign Direct Investment in Bangladesh

Bangladesh is now one of the most promising emerging markets in the world and foreign investors are recognizing it as a potential market to keep an eye on. Bangladesh has been hailed by The Economist as the ‘New Asian Tiger’. And foreign investors’ focus in recent times reflects this. A few of reasons of why foreign investors consider investing in Bangladesh are stated below:

Strategic Location: The geographic location of the country is ideal for global trade with its strategic location, regional connectivity, and worldwide access.

Greater Integration: Greater integration with regional and sub-regional blocs such as the South Asian Association for Regional Cooperation (SAARC), the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), the Association of South-East Asian Nations (ASEAN) is facilitating regional cooperation on a new level.

Big Consumer Market: With a population of just over 166 million, the country has a strong consumer demand and the consumer goods market, ranging from white goods and clothes to fintech, is growing fast. In Bangladesh, the Middle & Affluent Class (MAC) represents 19 million population in 2020 and will reach to 33 million in 2025.

One-Stop Service (OSS): The One-Stop Service (OSS) puts all investment facilitation mechanisms under a single window. Currently, 21 services of 7 agencies are delivered from OSS. 150 services of 34 agencies will be offered through OSS soon.

Young Workforce: Highly adaptive and industrious workforce with the competitive wages and salaries are available in Bangladesh. About 57.3% of the population is under 25, providing a youthful group for engagement to meet global standards.

Fast Scaling Infrastructure: World-class Facilities are available in Bangladesh Export Processing Zones, Bangladesh Economic Zones and High-tech Parks.

Significant Cost Arbitrage: Bangladesh provides 10-60 lower cost compared to its peers in terms of utility cost as well as labour wage.  

Figure 3: Competitive Factor Cost (Water and Electricity) among the Peer Cities
(Source: 27th Investment Cost Survey, JETRO 2017)

Figure 4: Competitive Factor Cost (Wages and Salaries) among the Peer Cities
(Source: 27th Investment Cost Survey, JETRO 2017)

At present, Bangladesh is the 41^st largest economy in the world. According to the Center for Economic and Business Research (CEBR), a British economic research organisation, Bangladesh will become the 25th largest economy in the world by 2035. The extraordinary pace of development of Bangladesh has stunned the world today. The Wall Street Journal has published an article on 3^rd March 2021 titled “Bangladesh is Becoming South Asia’s Economic Bull Case”. The New York Times published an op-ed article on 10^th March 2021 titled “What Can Biden’s Plan do for Poverty? Look at Bangladesh”. Thus, Bangladesh is now a wonder of the wonders.

– The full version of the report can be accessed HERE –

Greetings from MASSA!

As we cross the first half of 2021, Malaysia is beginning to see a faint light at the end of the pandemic tunnel when the vaccine rollout began in earnest in May 2021. We thank our Government for their efforts to provide the much-needed vaccinations for everyone residing in the country with the choice to be vaccinated. Despite the quickening pace of vaccinations, the continuing high rates of COVID infections still pose a serious threat to the economy as many businesses have to remain in lockdown. In these difficult circumstances, MASSA continues to leverage on its myriad platforms and sources to keep members informed and updated on relevant business and economic issues across the South nations.  

In this August newsletter, we would like to thank all our contributors. They include Dr Sumitra Nair, Vice-President of Talent Development and Digital Entrepreneurship at Malaysia Digital Economy Corporation (MDEC) for her insightful article on the increased prospects of digital-talent related jobs in the marketplace. We also thank Malaysia External Development Corporation (MATRADE), Malaysia Investment Development Authority (MIDA) and the Human Resources Development Fund (HRDF) for their informative articles. These insightful articles from the different Government agencies highlight their focused alignment on the digital transformation agenda that requires people processes and progressive technological process to be in upward synch to reap the efficiencies and competitiveness that this transformation can bring. We also thank Mr Rajibul Ahsan, Counsellor at the Bangladesh High Commission in Malaysia giving us the latest economic and emerging business trends in Bangladesh.

The first half of 2021 had been an eventful period for MASSA. We feature in our Diary of Events the webinars organised by the Bangladesh-Malaysia Chamber of Commerce and Industry (BMCCI) titled “Bangladesh-Malaysia FTA: Challenges and Opportunities for Business Community” and Showcase Bangladesh: 2021 Bangladesh-Malaysia Investment Summit organised by Standard Chartered Malaysia alongside the Bangladesh Investment Development Authority (BIDA). MASSA also participated in the Online Round Table Discussion on “Connecting to the African Market – Mauritius your Investment Destination” co-organised by the Federation of Malaysian Manufacturers (FMM) and the Economic Development Board (EDB) of Mauritius.

On 23 June 2021, MASSA held its 30^th Annual General Meeting online and saw elected, office bearers and exco members for the new term 2021-2023.

While we had to defer some planned events, we welcome members and readers to a webinar on Cybersecurity on 18^th August 2021. Please keep a lookout for member’s weekly Circulars for the latest news and events.

Last but not the least, we want to thank our members, contributors, and associates for your support to date. MASSA remains committed to bring to members views and news from the South-South.

We wish all members and readers to stay safe and vigilant in this ongoing pandemic.

Thank you.

Ng Su Fun

Editorial MASSA

Tan Sri Azman Hashim
President
MASSA

Malaysia’s digital transformation roadmap got a further boost with the launch of the National 4IR Policy on 1 July 2021. Malaysia can be on track to attain the status of a high-tech, high-performing nation by 2030 as outlined in the Shared Prosperity Vision 2030. This can be achieved with the execution of the National 4IR Policy and National Policy on Science, Technology and Innovation (NPSTI) designed to empower the people with IR4.0 knowledge and skillsets to boost our workforce’s productivity and to raise our industries’ global competitiveness. The core of IR4.0 technologies include artificial intelligence (AI), the Internet of Things (IoT), blockchain, distributed ledger technology (DLT), advanced materials supported by cloud computing and big data analytics (BDA). These technologies can have the ability to create multiplier effects in many economic sectors.

Malaysia’s economic performance, despite a positive first quarter 2021 will be impacted by the enhanced Movement Control Orders (EMCO) introduced once again since June 2021 given the stubbornly high daily new COVID cases, especially in the Klang Valley. Seeing the severity of the economic situation, the Government has released yet another RM150B PEMULIH (National People’s Well-Being and Economic Recovery Package) package for the Rakyat. This prolonged EMCO will likely impact our GDP growth forecast for 2021 from 5.6% to 4.2-4.4%. The National Vaccination rollout is therefore critical and must be expedited at all costs before we can see the green shoots of economic recovery for our nation.

MASSA held its 30th Annual General Meeting online on 23 June 2021. I would like to congratulate and thank the newly elected Office Bearers and Executive Committee members who will serve, and for most of you, for continuing to serve again, in the new term, 2021-2023. I extend my heartiest gratitude to outgoing members who have served for an equally long time.

I appreciate the continuing support and participation of all members with your attendance and involvement at our regular meetings and webinars. I also wish to thank members and our ex-officio partners, who have contributed valuable and insightful articles for our newsletters and not forgetting the sponsors of our website.

Stay healthy.

Tan Sri Azman Hashim

President

2 Aug 2021

Article prepared by:

Mr Rony Ambrose Gobilee
Chief Programmes Officer
Human Resource Development Corporation (HRD Corp)

Honing and Acquiring Talent for Digital Transformation

Digital transformation is without a doubt, one of the most positive changes to have emerged from the pandemic. It has allowed companies to become more agile, efficient and competitive. Many seemed to believe that technology is the primary driver of digital transformation. On the contrary however, it is actually spurred by human capital. People and technology empower one another. Therefore, securing the right talents for your company’s digital transformation strategy should be a priority.

Rapid technological advancement brings convenience to our work lives. However, it also makes the future far less predictable. A survey by Forrester in 2020 found that only 46% of companies in Malaysia are on a digital transformation journey¹. This is because, it appears that the majority of local companies are currently not set up for taking advantage of the new opportunities offered by digitalisation and mastering the challenges that come with it.

Aside from having to plan on which technology solutions to invest in, digitalisation requires employers to decide on which new positions to fill and which jobs or even departments to eliminate if necessary. To mitigate this, companies must focus on reskilling and upskilling existing employees so that they are better equipped to embrace digitalisation at the work place without their skillset, knowledge or roles becoming obsolete as a result of digitalisation. To that end, employees must be encouraged to be agile, dynamic and open to taking on new challenges to enhance their value in a digital-first workplace.  

Skills are categorised into hard and soft. Hard skills refer to technical skills acquired through education, training or certifications. Soft skills are interpersonal attributes, namely communications, attitude, leadership and more. Employees who possess high levels of proficiency in both sets of skills are rare and in high demand, especially by companies undertaking the gargantuan challenge of digital transformation.

Winning over talents for your company’s digital transformation strategy is no simple task. The movement of top tech talents in the labour market is extremely fluid. Therefore, it is important for you to clearly establish how your company will transform digitally and determine the technology and talents required to achieve that transformation. Identify value propositions that resonate with talents (e.g., career progression, freedom to innovate, skills development). Most importantly, the compensation package must commensurate with the experience and value that the employee offers.

According to the Department of Statistics Malaysia, the digital economy contributed a staggering 19.1% (RM289 billion) to  Malaysia’s GDP in 2019 and this grew to 20% in 2020.

This significant contribution could be attributed to the fact that in 2019, 1.14 million Malaysian talents were employed in the digital sector. Therefore, equipping Malaysia’s workforce with digital skills is paramount for  our nation’s growth and success. Possessing digital skills is no longer optional, those who do not have them will get left behind.

HRD Corporation’s Role in Driving Malaysia’s Digital Transformation Agenda

HRD Corp has been at the forefront of Malaysia’s human capital development for the past 28 years. Our mission is to improve lives through the promotion of lifelong learning and the acquisition of future work skills.

From our internal database, we have observed a significant shift in training trends. Unlike before, employees from industries across the spectrum are now enrolling in training courses related to digital skills, from basic Microsoft Excel, to complex Machine Learning. A total of 231,054 training places related to digital skills were successfully carried out by employers from 2018 to 2020. More than RM150 million was invested in digital skills training from 2018 to 2020.

HRD Corp has implemented a variety of initiatives to provide financial assistance to eligible companies that are undergoing digital transformation. These include:

1. 1. Information Technology (IT):
   Provide financial assistance to employers for the purchase of desktop or laptop computers, webcam and internet connection for their inhouse computer lab, to train employees in the field of Information Technology.
   
3. 2. Computer Based Training (CBT):
   Enable employers to purchase/develop training software to retrain and upgrade the knowledge and skills of their workforce.
   
5. 3. RiSE4WRD for Industry4WRD:
   Assist Small & Medium Enterprises (SME) in the manufacturing and related sectors that have participated in the Readiness Assessment (RA) under the Ministry of International Trade & Industry (MITI), to start or accelerate their digital transformation journeys.
   
7. 4. PENJANA INITIATIVE – INDUSTRY REVOLUTION 4.0:
   Assist employers that are planning on training their workers in digitalisation-related courses that could help employers improve business productivity and sustainability.

To learn more, please visit https://hrdcorp.gov.my/programmes/

Additionally, HRD Corp has also developed the Industrial Skills Framework (IndSF) for Digital Technology with key industry players as a common reference for skills required by individuals and employers to thrive in the digital economy. Information such as career pathways, recommended training programmes and certification are also included in the IndSF. Software Development, Data Science, Cybersecurity, are among the key emerging focus areas highlighted in the document.

Technology is evolving at an exponential rate and it is integral to how we live and work.  Information and data have become core business assets in this digital age. Insights garnered through the digital transformation process which are then acted upon by competent employees can accelerate a company’s progress. From big data, to blockchain, to artificial intelligence, the potential of emerging technologies is immense. Assembling the right pool of talents who are able to fully leverage modern digital technology, may be the single most important step that a company contemplating digital transformation can take². A clear focus on talent engagement will help companies better retain their talents, while improving business profitability and sustainability.

Source

1. 1. Granzen, A. (2021) “Spotlight On Southeast Asia: The State Of Digital Transformation In Malaysia”
2. 2. Davenport, T., Redman, T. (2020) “Digital Transformation Comes Down to Talent in 4 Key Areas”

Contact

PEMBANGUNAN SUMBER MANUSIA BERHAD

Wisma HRD Corp, Jalan Beringin
Damansara Heights
50490 Kuala Lumpur
Tel: 1800-88-4800
Fax: 03-2096 4999
E-mail: support@hrdcorp.gov.my
Website: https://hrdcorp.gov.my/

Article by the Malaysian Investment Development Authority, MIDA

MIDA Smart Automation Grant (SAG):
A smart move for small and medium-sized enterprises (SMEs) in COVID-19 pandemic business operation

In efforts to build a resilient recovery against the backdrop of the COVID-19 pandemic, the Malaysian Government launched the National Economic Recovery Plan (PENJANA) Stimulus Package, valued at RM35 billion in June 2020, to support the nation and businesses in the ‘new normal’. Through 40 key initiatives, PENJANA emphasises three (3) strategic thrusts:

• Empower the People;
• Propel Businesses; and
• Stimulate the Economy.

Recognising SMEs as the backbone of Malaysia’s economy, which makes up 98 per cent of the total establishments in the country, the Government continues to assist and support SMEs and Mid-tier Companies (MTCs) to cushion the impact of the pandemic. Hence, the Smart Automation Grant (SAG) initiative was introduced with an allocation of RM50 million. MIDA initiates the SAG over a 12-month programme and companies are eligible to apply to MIDA from 4 December 2020 to 31 December 2021.

Given on a matching basis (1:1) based on eligible expenditures, up to a maximum grant of RM1 million per company, MIDA SAG is a structured programme with the following objectives:-

• assist and incentivise Malaysian owned SMEs and MTCs to automise and digitalise operations, production and trade channels;
• reduce reliance on low-skilled foreign workers;
• improve efficiency in the manufacturing and services sectors;
• provide job opportunities in high value-added sectors; and
• boost domestic investment.

Eligibility criteria for SME and MTC

MIDA has also collaborated with selected banks as strategic alliances to promote and provide knowledge to companies on automation and digitalisation. First, companies will go through a series of session which would help them to refine their knowledge on automation and digitalisation through simulation training and evaluations. Subsequently, companies will share their plans to start developing or adopting new technologies to automate their production process or digitalise their business operations. Successful companies under this programme then may submit their application to MIDA and pitch to the Approval Committee. To date, MIDA has engaged with two banks, namely, AmBank Group and Malaysian Industrial Development Finance Berhad (MIDF).

Since its launch, MIDA SAG has received tremendous response and high interest shown by the domestic industries. As at 31 May 2021, MIDA has received 493 applications, surpassing the original projection. As at 30 June 2021, the Smart Automation Grant Approval Committee has approved a total of 77 companies with matching grants amounting to RM48.5 million, of which 86 per cent of the recipients are SMEs. Approved companies are mainly from industries such as plastics, wood, furniture and textiles. This indicates productive undertakings aligned with the Government’s aspiration under the PENJANA to reduce dependency on low-skilled labour and ultimately increase automation as well as the productivity of manufacturing and services companies.

The Government has since added an additional RM50 million allocation for the SAG under the PEMERKASA stimulus package.

Moving forward, MIDA, as the national principal investment promotion agency under the Ministry of International Trade and Industry (MITI), will continue to assume a vital role in shaping the future of Malaysia’s digital economy, as well as to drive automation and digitalisation of SMEs and MTCs.

About MIDA
MIDA is the government’s principal investment promotion and development agency under the Ministry of International Trade and Industry (MITI) to oversee and drive investments into the manufacturing and services sectors in Malaysia. Headquartered in Kuala Lumpur Sentral, MIDA has 12 regional and 20 overseas offices. MIDA continues to be the strategic partner to businesses in seizing the opportunities arising from the technology revolution of this era. For more information, please visit www.mida.gov.my and follow us on Twitter, Instagram, Facebook, LinkedIn and YouTube channel.

Scan to connect with MIDA:

www.mida.gov.my

Article by the Malaysia External Trade Development Corporation, MATRADE

Sourcing from Malaysia through E-Commerce

The global eCommerce market is expected to reach almost US$5 trillion in 2021, proving once again that the shift in online shopping triggered by the COVID-19 pandemic is not slowing down. In 2020, eCommerce registered a double-digit growth in almost all markets. China continues to lead the global eCommerce market, with total online sales of US$2.8 trillion. It also has the world’s most digital buyers, with 792.5 million, representing 33.3% of the global total.

The COVID-19 pandemic made a significant impact on eCommerce trends around the world. With physical stores shuttering overnight, consumers flocked to the internet for either essential goods and services or other products. Experts say the pandemic accelerated the shift to online shopping by as much as five years.

Online shoppers are increasingly looking outside their country’s borders for purchases. According to Facts and Factors recent research study, the global cross-border B2C eCommerce market size was estimated at US$780 billion in 2019 and is expected to reach US$4.8 trillion by 2026.

The Association of Southeast Asian Nations (ASEAN) and East Asia together has the world’s fastest-growing online market, with an existing internet user base of over 350 million users and an overall market size of US$72 billion in 2018.

In the global trade perspective, 2020 was a challenging year for all economic regions. Mr. Mohd Mustafa Abdul Aziz, Chief Executive Officer of MATRADE, noted that “Malaysia too, was severely affected especially in the manufacturing activities and the movement of goods and services, resulting in negative external trade growth in the first half of the year. However, Malaysia’s external trade rebounded in the second half of 2020 due to the progressive opening of the economy and gradual recovery of external demand.”

Malaysia’s trade surplus in 2020 recorded the 4th consecutive year of double-digit growth, with an expansion of 26.9% to RM184.79 billion compared to 2019. This was also the largest trade surplus thus far, representing Malaysia’s achievement in sustaining trade surplus for 23 consecutive years since 1998.

Malaysia’s trade with existing Free Trade Agreement (FTA) partners in 2020 stood at RM1.185 trillion and accounted for 66.7% of Malaysia’s total trade. Furthermore, the signing of the Regional Comprehensive Economic Partnership (RCEP), the biggest FTA in the world, will provide Malaysian companies and businesses access to more than a third of the world’s market, attract foreign direct investment and will be a boon to Malaysia’s export growth.

Mr. Mohd Mustafa also highlighted the digitalisation initiatives that MATRADE has embarked upon, “MATRADE is also embracing the new norm by changing its approach to cater for a more agile assistance and enhanced promotion activities to ensure Malaysian companies remain competitive. MATRADE made necessary shifts to adapt to the changes of doing business in the new norm, by leveraging on the usage of digital technology, such as virtual exhibitions, online B2B meetings and eCommerce”.

MATRADE is committed in driving cross-border eCommerce to ensure Malaysian exports remain competitive. Various efforts have been implemented under the National eCommerce Strategic Roadmap (NeSR) led by the Ministry of International Trade and Industry (MITI) since 2016 to achieve this objective through cooperation between ministries and government agencies as well as collaboration with industry players, both local and international.

Recognising the impact and potential of eCommerce to the nation’s trade, MATRADE has taken a progressive step by implementing the eTRADE Programme under the 11^th Malaysia Plan, 2016 – 2020. Aiming to accelerate the adoption of cross border eCommerce among Malaysian SMEs, the programme benefitted a total of 3,358 companies and generated RM376.3 million in export sales.

Exports were to more than 40 countries, consisting both traditional and emerging markets like the USA, Japan, China, ASEAN, Bhutan, Papua New Guinea and Mauritius. Major products exported include food and beverages, toiletries and cosmetics, furniture and apparels, garments and accessories.

Through the eTRADE Programme, MATRADE has taken the initiative to provide a springboard for Malaysian SMEs to adopt and leverage on eCommerce to expand their export markets and increase their reach globally. Now, buyers from all over the world can source for a variety of Malaysian products and services from the comfort of their own office or home.

There are many compelling reasons why international buyers should consider Malaysia as a preferred sourcing partner. Malaysia offers a wide range of diversified and high quality products and services. In the global supply chain, Malaysia ranked as one of the leading exporters worldwide for semiconductors, medical disposables and devices, processed food, building materials, healthcare, education, information and communication technology (ICT) and engineering services. In addition, Malaysia’s halal certification is recognised worldwide and the country is renowned for its high quality halal products.

Leveraging on the success of the eTRADE Programme, MATRADE has launched the eTRADE Programme 2.0 in March this year. The enhanced programme aims at not only to continue assisting new Malaysian companies to onboard cross-border eCommerce platforms but also to sustain those already participating in eCommerce.

“This initiative by the Ministry of International and Industry (MITI) through its agency MATRADE underlines our commitment to realize the aspirations of the Malaysia Digital Economy Blueprint (MyDigital), which was launched by YAB Prime Minister of Malaysia on 19^th February 2021. The eTRADE 2.0 Programme is in line with Thrust 2: Boost Economic Competitiveness Through Digitalisation”, said Mr. Mohd Mustafa.

“We believe cross-border eCommerce can provide a great opportunity for SMEs to ensure business continuity and resilience while at the same time offer a cost-effective platform for global buyers to source for Malaysian made products and services”.

For further information and assistance, please contact MATRADE via email at info@matrade.gov.my, MATRADE’s social media channels or visit www.matrade.gov.my

Dr Sumitra Nair
Vice President & Head of Digital Skills and Jobs
Malaysia Digital Economy Corporation (MDEC)

Dr Sumitra Nair was the session moderator for a PIKOM-MASSA webinar on Human Capital held on 14 April 2021. Building on the momentum and insights gained from the webinar, MASSA invited Dr Sumitra to pen her insights for the August edition of MASSA ‘s Newsletter.

Based on Malaysia Digital Economy Corporation’s (MDEC) tracking of digital vacancies on five popular recruitment platforms in Malaysia since June 2020, digital job vacancies in Malaysia almost tripled from June 2020 to April 2021. This can be attributed to the extended impact from the Covid-19 pandemic which has shown that the role of digitalisation is extremely vital for the survival of businesses. This trend is not exclusive only in Malaysia but is a global phenomenon.

MDEC has found that the number of digital job vacancies increased from around 19,000 in June last year to more than 56,000 vacancies as at April 2021, with the largest share of vacancies posted on LinkedIn. The most popular jobs posted were in Software Development, Data Science, IT Services and eCommerce. 76 percent of the vacancies were for experienced hires, 20 percent of vacancies open to fresh graduates and rest being for internships.

Based on data extracted from the LinkedIn Talent Insights (LTI) platform, skills highest in demand in Malaysia as well as the South East Asian region include analytical skills, software development, various programming languages and cloud computing.

As more non-tech industries embrace digitalisation, companies in market research, cosmetics, music and tobacco have been actively hiring digital talents over the past year. At the same time, the information communications technology and financial services sectors are struggling to meet the strong demand for digital talents in their respective sectors.

The findings below are based on MDEC’s Digital Skills and Jobs Division analysis of data derived from the LinkedIn Talent Insights (LTI) platform in April 2021. MDEC’s research had involved more than 960 digital roles across all industries in Malaysia and the South East Asian region.

Digital Talents

As of April 2021, there has been more than 240,000 digital talents in Malaysia that have LinkedIn profiles and more than half of them are located in Selangor or Kuala Lumpur. Outside the usual hotspots, a surplus of digital talents can also be found in Johor, Penang and Malacca, most likely due to the presence of universities like Universiti Teknologi Malaysia, University Sains Malaysia and Multimedia University in those states. Employers who are in dire need for digital talents may want to run their recruitment drives in those states.

The most popular job titles amongst digital talents in Malaysia include Digital Marketing Executive/Specialist/Manager, Data Scientist, Full Stack or Software Engineer, Head of Digital and interestingly, YouTuber. Data from LTI also suggest that over the last one year, there has been a 20 to 30 percent growth in the number of talents that are either self-employed, working as freelancers or YouTubers. This increasing trend of self-employed or freelancers bodes well with the government’s growing focus on the gig economy and workers. This includes MDEC’s Global Online Workforce (GLOW) Penjana programme which trained more than 10,000 unemployed Malaysians on how to secure freelance jobs via online platforms.

MDEC’s GLOW is a national programme designed to enable Malaysians to become part of the online global workforce and to earn income independently and it is inclusive for Malaysians from various walks of life. This programme involves stakeholders from various public and private sectors and will train and provide mentoring to registrants in a very methodological and cohesive manner. Please click on this link https://mdec.my/glowmalaysia/ for more information and follow MDEC’s social media for the announcement of the next GLOW intake.

Skill sets of Digital Talents

In Malaysia, fast growing digital skills includes Computer Science, Information Technology, Python and Adobe Premier Pro which has shown consistent growth of more than 30 percent in the past year. Phyton is one of the foundational skills for data science careers which may explain the spike in this skill. Fast-growing skills in Malaysia are somewhat different from the South East Asian region.

For example, there’s been much steeper growth in data analytics, back-end web development and React.js skills in the region compared to the other types of popular skills in Malaysia. Since the skills that are in demand in Malaysia include Cloud Computing and a variety of programming languages, digital talents who wish to enhance their marketability would do well to pick up skills that are fast growing in our neighbouring countries.

Significance of Current Digital Talents Trends for Malaysian Talents

While the number of digital job vacancies is high, the majority of the vacancies are for experienced talent. This poses a challenge to fresh graduates. In the short term, fresh graduates could close their experience gap by taking up digital jobs on freelance basis via platforms like Upwork, Freelancer.com or Fiverr. At the same time, junior level talents should also start to pick up some of the in-demand digital skills like analytical skills, software development, various programming languages and cloud computing.

To help talents identify the right training courses, MDEC has established the Digital Skills Training Directory which lists courses that have been reviewed and endorsed by expert tech practitioners. Job seekers would do well to refer to this directory, while those who are employed can also enhance their careers by taking up courses to acquire some of the in-demand skills mentioned in this article. For more information on MDEC’s Digital Skills Training Directory, please click on the following link: https://mdec.my/digitalskillstrainingdirectory/.

As for secondary school leavers or pre-university students who are wondering what courses to pursue in university, these trends suggest promising career opportunities in digital technology-related disciplines. In this regard, MDEC works with 11 universities and five Polytechnics as part of our Premier Digital Tech Institutions initiative. Thanks to the strong collaboration between these institutions and industry players, more than 90 percent of their digital tech graduates get employed within six months of graduation.

MDEC has shown continuous support towards optimising and grooming the potential of Malaysia’s digital talent. Generating income through digital means is not confined only by working for digital processing companies and IT start-ups, because thanks to MDEC’s efforts, it is now much more inclusive and accessible. Malaysians looking to kickstart their online business platforms and networks are welcomed to learn about MDEC’s various initiatives towards going digital at https://mdec.my/.

For more articles written by Dr Sumitra Nair, please click on the following link: https://blog.mdec.my/?cat=27