[Q&A] Malaysia as the New China for Foreign Technology Companies
Ng Wan Peng is Chief Operating Officer of upcoming technology hub Malaysia’s Multimedia Development Corporation (MDeC). Here he talks to Business Review Europe about why tech companies should consider Malaysia for investment, challenging the Chinese dominance in this field.
BRE: What are the main incentives for foreign tech firms to invest in Malaysia?
NWP: Malaysia has changed immeasurably in the last 10 years, yet we’re facing a bit of an image problem.
While the country is fast-becoming viewed as a top Asian holiday destination, with beautiful beaches and luxury hotels, it doesn’t immediately spring to mind as a place for foreign firms to invest or in which to establish their Asian hub.
So why would a foreign tech firm choose to apply for MSC Malaysia status? The answers range from the economical, to the cultural, to the financial. For one, we are politically and socially stable.
We also believe our multi-cultural society holds a business advantage – we Malaysians are used to sitting across the table from someone of a different ethnicity to us from an early age, so we’re used to conducting business with people from all geographies and walks of life.
Being a largely English-speaking population is also attractive to Western investors, while our world-class infrastructure helps to facilitate global commerce without fear of being disrupted by natural disasters.
We also offer generous government initiatives in the form of a ‘Bill of Guarantees’ which promises MSC Malaysia-status companies a 10-year income tax holiday or investment tax allowance for up to five years, freedom of ownership, strong cybersecurity laws, and no internet censorship.
We have unrestricted employment of foreign knowledge workers, allowing foreign firms to bring in their own overseas talent without stumbling upon visa-related red tape.
Just as importantly, Malaysia has passed a number of new laws which protect intellectual property and promote freedom of thought and expression. As a result, Malaysia offers investors a young, educated and productive workforce at a competitive cost for the region.
In terms of European companies’ investment in the country, this actually makes up the largest portion of foreign-owned companies. Of the seven percent of MSC Malaysia companies that are foreign-owned, 33 percent are from United Kingdom, followed by 19 percent from The Netherlands, and 14 percent from Germany.
Is the plan to concentrate on and excel in a specific technology area?
At a broad level, our ‘Digital Malaysia’ initiative comprises four key goals to hit by 2020: create 160,000 high-value jobs; increase Malaysia’s ICT contribution from 9.8 percent to 17 percent; provide an additional one percent SME contribution to Gross Domestic Product; and create an additional $2,164 of digital income per annum for 350,000 Citizens.
To help us on our journey to achieving these goals, one of our key objectives is to increase revenue and fuel growth in five specific technology areas: ICT Services, eCommerce, ICT Manufacturing, ICT Trade and Content and Media.
What are the main challenges to Malaysia's aspirations to be Asia's pre-eminent ICT hub?
While we’re feeling positive about our growth and prospects, there are undoubtedly some challenges that need to be addressed if we’re to achieve our digital goals.
For one, we need to shift the Malaysian mindset about technology from consumption to production. About five million Malaysians will enter the workforce over the next few years. We want them to embrace technology to produce and create, rather than simply use it to surf the web and socialize.
To help institutionalize the idea of ICT as an invaluable working tool, and avoid increasing the digital divide, we’re pushing for a minimum number of hours to focus on using ICT as a tool in educational syllabuses, be it in the form of labs or practical training.
We’re also working to address the current IT skills shortage which is an issue being experienced across Asia, and the rest of the world, as ICT demand outstrips supply. In a bid to close the gap, we’re encouraging educational institutions to adapt their curricula and put more emphasis on practical industry experience.
Another challenge lies in the area of finance and investment. With a traditionally cautious culture, most Malaysian venture capitalists find tech startups too risky an investment. Certainly, our startup culture is evolving and there’s a huge number of seed and series A investments.
But Malaysian VCs tend to look at tech companies in a rather old-school way – profit and revenue multiples, rather than potential. Currently, most of the funding for IT entrepreneurs is provided by the government to plug the gap. Looking ahead, we hope to see a change in local VC attitudes towards startups, as more Malaysian entrepreneurs prove themselves on a global stage.
Automation of repetitive tasks leads to higher value work
Two-thirds of global office workers feel they are constantly doing the same tasks over and over again. That’s according to a new study (2021 Office Worker Survey) from automation software company UiPath.
Whether emailing, inputting data, or scheduling calls and meetings, the majority of those surveyed said they waste on average four and a half hours a week on time-consuming tasks that they think could be automated.
Not only is the undertaking of such repetitious and mundane tasks a waste of time for employees, and therefore for businesses, but it can also have a negative impact on employees’ motivation and productivity. And the research backs this up with more than half (58%) of those surveyed saying that undertaking such repetitive tasks doesn’t allow them to be as creative as they’d like to be.
“When repetitive, unrewarding tasks are handled by people, it takes time and this can cause delays and reduce both employee and customer satisfaction,” Gavin Mee, Managing Director of UiPath Northern Europe tells Business Chief. “Repetitive tasks can also be tedious, which often leads to stress and an increased likelihood to leave a job.”
And these tasks exist at all levels within an organisation, right up to executive level, where there are “small daily tasks that can be automated, such as scheduling, logging onto systems and creating reports”, adds Mee.
Automation can free employees to focus on higher value work
By automating some or all of these repetitive tasks, employees at whatever level of the organisation are freed up to focus on meaningful work that is creative, collaborative and strategic, something that will not only help them feel more engaged, but also benefit the organisation.
“Automation can free people to do more engaging, rewarding and higher value work,” says Mee, highlighting that 68% of global workers believe automation will make them more productive and 60% of executives agree that automation will enable people to focus on more strategic work. “Importantly, 57% of executives also say that automation increases employee engagement, all important factors to achieving business objectives.”
These aren’t the only benefits, however. One of the problems with employees doing some of these repetitive tasks manually is that “people are fallible and make mistakes”, says Mee, whereas automation boosts accuracy and reduces manual errors by 57%, according to Forrester Research. Compliance is also improved, according to 92% of global organisations.
Repetitive tasks that can be automated
Any repetitive process can be automated, Mee explains, from paying invoices to dealing with enquiries, or authorising documents and managing insurance claims. “The process will vary from business to business, but office workers have identified and created software robots to assist with thousands of common tasks they want automated.”
These include inputting data or creating data sets, a time-consuming task that 59% of those surveyed globally said was the task they would most like to automate, with scheduling of calls and meetings (57%) and sending template or reminder emails (60%) also top of the automation list. Far fewer believed, however, that tasks such as liaising with their team or customers could be automated, illustrating the higher value of such tasks.
“By employing software robots to undertake such tasks, they can be handled much more quickly,” adds Mee pointing to OTP Bank Romania, which during the pandemic used an automation to process requests to postpone bank loan instalments. “This reduced the processing time of a single request from 10 minutes to 20 seconds, allowing the bank to cope with a 125% increase in the number of calls received by call centre agents.”
Mee says: “Automation accelerates digital transformation, according to 63% of global executives. It also drives major cost savings and improves business metrics, and because software robots can ramp-up quickly to meet spikes in demand, it improves resilience.
Five business areas that can be automated
Mee outlines five business areas where automation can really make a difference.
- Contact centres Whether a customer seeks help online, in-store or with an agent, the entire customer service journey can be automated – from initial interaction to reaching a satisfying outcome
- Finance and accounting Automation enables firms to manage tasks such as invoice processing, ensuring accuracy and preventing mistakes
- Human resources Automations can be used across the HR team to manage things like payroll, assessing job candidates, and on-boarding
- IT IT teams are often swamped in daily activity like on-boarding or off-boarding employees. Deploying virtual machines, provisioning, configuring, and maintaining infrastructure. These tasks are ideal for automation
- Legal There are many important administrative tasks undertaken by legal teams that can be automated. Often, legal professionals are creating their own robots to help them manage this work. In legal and compliance processes, that means attorneys and paralegals can respond more quickly to increasing demands from clients and internal stakeholders. Robots don’t store data, and the data they use is encrypted in transit and at rest, which improves risk profiling and compliance.
“To embark on an automation journey, organisations need to create a Centre of Excellence in which technical expertise is fostered,” explains Mee. “This group of experts can begin automating processes quickly to show return on investment and gain buy-in. This effort leads to greater interest from within the organisation, which often kick-starts a strategic focus on embedding automation.”