ict services industry outlook in malaysia stan singh
TRANSCRIPT
ICT Services Industry Outlook in Malaysia
Stan Singh
Next Economic Major Thrust: Endogenous Growth through New Transformation Policy
FDI Driven Growth Periods
New Transformation
Policy
Macro Policy Shift: FDI Driven to Innovation Driven Economy
HIGH INCOME – INNOVATION DRIVEN
ECONOMYLand, labour and low skills
Infrastructure, Capital, Factory, Technical Skills and Semi-skilled Workforce
Info-structure (ICT), science, R&D, knowledge capital, innovation skills, XY Generations, entrepreneurship and globalization
GNI Per Capita (USD$)
1970 2009
Korea 260 21,530
Malaysia 380 6,760
Source: DOSM /10th Plan /PIKOM
1995 GNI per capita:RM5,406
1995 Household Income:RM2,020
1980 GNI per capita:RM1,820
1980 Household Income:RM692
UntilMid 90’s
UntilLate 70’s
LOW INCOME – RESOURCE DRIVEN
ECONOMY
2020 Target:USD21,834
10th MP (2011-2015)USD12,139
Developed Economy
Benchmark:USD14,816
MIDDLE INCOME – FACTOR DRIVEN
ECONOMY
2010 GNI per capita:RM26,420 (USD8,256)
2009 Household Income:
RM4,025 (USD1,183)
By 2020 GNI per capita
Towards High Income Services Sector Nation
CAPABILITY MATURITY MODEL INTEGRATION FRAMEWORK
PEOPLE CAPABILITY MATURITY MODEL FRAMEWORK
•Revenue•Growth
•Profitability•Leadership
• Governance
VOICE OF CUSTOMER (VOC)
• Performance• Quality
• Cost• Cycle time• Reliability
VOICE OF BUSINESS (VOB)
• Integrity• Transparent• Responsive
• Accountability• Responsibility
VOICE OF EMPLOYEE (VOE)
PROCESS STRATEGY HUMAN CAPITAL STRATEGY
TRANSCENDING INTO HIGH VALUE AND INCOME
Process and Human Capital Strategy
1970 E&E
KNOWLEDGE / INNOVATIVE WORK FORCE
KN
OW
LE
DG
E/
INN
OV
AT
ION
BA
SE
E
CO
NO
MY
(IDE
/KB
E)
1994 MSC
2011IDE / KBE
ICT ERA INFLEXION PHASE
INDUSTRIAL ECONOMY
INDUSTRIAL WORK FORCE
Electrical & Electronic (E&E) Free Trade Zone
(FTZ)
Multimedia Super Corridor
(MSC)
Innovative Digital
Economy (IDE)
RESOURCE BASED ECONOMY
AGRICULTURAL WORK FORCE
Human Capital Strategy: From Industrial Towards Knowledge Workers
Economic Outlook
Strong Economic Fundamentals1.Strong domestic demand;2.Increased export earnings;3.Stable overnight lending rates;4.Stable public and private consumption ;5.Low inflation rates;6.Low unemployment rates;7.Stimulating ICT / ICTS growths;8. 60% inclined to Asian export earnings9. Post GE election stability
Economic challenges1.Risk aversion by potential investors;2.Slack in ETP ;3.Reducing fiscal deficit;4.Fluctuating commodity based earnings;5.Capital flight arising from erratic foreign exchange fluctuations; 6.Poor quality workforce;7.Over dependent upon unskilled foreign workers;8.Political stability after GE13
GDP 2012 : 5.2%; GDP 2013 : 5.5%, despite 4.1% in Q12013
Year : 2000 Year : 2010
Structural Shift towards ICT Services
ICT Outlook
Potential Growth Areas1.Big data analytics – culling out business insights and intelligence2.Cloud computing – even applicable to SME with reduced cost and maintenance;3.Mobile devices – stimulates anytime and anywhere for consumerization of IT4.Social media - advent of social business;
ICT Challenges1. Declining supply of graduates, not improved;2. Quality of graduates meeting industry demands still remain a challenge;3. Quality and competency standards – less than 1.5% CMMI & PCMM certified;4.Still lack strong R&D, patenting and commercialization culture, despite Government incentives and facilities
Mega projects, corridor developments and transformation programmes attribute ICT Services growth
Share and Structure of ICT Services Outlook
ICT Services Trade: Exports and Imports growing exponentially
Po
liti
cal
Tra
nsf
orm
atio
n P
og
ram
me
(PT
P) R
ural T
ransfo
rmatio
n P
rog
ramm
e (RT
P)
ICT Sector Projected to grow at 11% in 2013
One Malaysia
Economic Transformation
Programme (ETP)
Government Transformation
Programme (GTP)
DigitalTransformation
Programme (DTP)
Iskandar Malaysia
Northern Corridor
Economic Region (NCER)
East Coast Economic
Region (ECER)
Sabah Development
Corridor (SDC)
Sarawak Renewable
Energy (SCORE)
Mega projects : Kajang – Sg. Buluh
Mass Rapid Transit (MRT)
VISION2020
Transformation projects contribute significantly towards ICT Serivices
Average monthly salary of ICT Professionals
Salary increase in 2012: 8.7% from RM6240 to RM6784;Projected growth in 2013: 8.9% to RM7,387
Those in IT Managerial category tend to earn much more than in engineering / technical lines;Senior IT Engineer net 46% higher salary than Junior IT
Salary differential by job functions
Hot ICT Jobs
1. Hot ICT jobs still remain very much similar to recent years; however, predicted fast growing demand for big data analytics requiring inter-disciplinary skills on IT, numeracy, statistical and business intelligence skills;
2. Quality and process improvement skills also poised to fetch higher demand in the near future;
3. Applications like SAP, ERP may lose market share with similar, simplified and cheaper versions appearing in countries like China
In comparison to Malaysia, USA pays 2.08 times ; Singapore pays 1.84 times higher compared to 2.26 time; Hong Kong Australia 1.90 times;Thailand, China and Vietnam paying better remuneration;By 2018 the salary gap is likely to leveled up among booming Asian economies – Singapore, HK, China and Vietnam
Regional benchmarking
Job sentiment index
Job sentiment index still remains high, indeed got better when JECI moved up from 48.8 in 2012 to 49.1 in Q12013
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