This article first appeared in Digital Edge, The Edge Malaysia Weekly on July 10, 2023 - July 16, 2023

Accelerating digital adoption, piloting projects to unlock the value of new technologies and addressing related problems in their implementation are the priorities of Malaysia’s new Centre for the Fourth Industrial Revolution (C4IR), the first such centre in the Asean region. 

An initiative between the Malaysian government and the World Economic Forum (WEF), Malaysia’s C4IR is billed as a milestone in the country’s journey to becoming a global leader in technology governance and innovation.

Fabian Bigar, CEO of MyDIGITAL Corporation, says through the centre, Malaysia will be able to capitalise on the knowledge and expertise that make up this global network of public and private sector experts, policymakers and innovators and, at the same time, contribute to this knowledge bank.

C4IR is hosted by MyDIGITAL Corp­oration, an agency under the Ministry of Economy tasked to monitor the progress of the Malaysian Digital Economy Blueprint (MDEB) and the National 4IR Policy, with Fabian acting as the centre’s head. C4IR focuses on two broad themes — energy transition and digital transformation, which are in line with the country’s digital economy road map and the national 4IR Policy.

Launched in May, Malaysia’s C4IR is one of 19 around the world, out of a planned 25. It joins host agencies in Turkey, Brazil, Colombia, Israel, South Africa and Saudi Arabia — among others — in forming the WEF’s global C4IR network, each with its own thematic focus. Fashioned as a platform for multistakeholder collaboration, the C4IR network brings together technology policy experts from the public and private sectors to maximise technological benefits to society while minimising the risks associated with 4IR technologies.

According to Fabian, the centre will be governed by an executive committee made up of representatives from the Ministry of Economy; Ministry of Communications and Digital; Ministry of Science, Technology and Innovation; Ministry of Investment, Trade and Industry, and the World Economic Forum.

“Proposals will be brought to this committee, whose members will then collectively decide on the projects to be undertaken by the centre. The primary concern of the centre, other than to tap and gain knowledge as well as international recognition, is how to accelerate digital adoption.

“The question arises because it’s not just about giving people digital tools, devices or connectivity but also to consider and examine these new technologies, and how they are to be governed and applied,” he says.

Although it is still early days, there have been some proposals floated for the centre to take up. These include policy recommendations on mobilising investments in clean energy and the impact of artificial intelligence (AI) on the economy. Collaborations with the host agencies of other centres around the world are also an exciting prospect, says Fabian, pointing to the possible bilateral cooperation with Colombia’s C4IR in smart agriculture. “It’s preliminary at the moment but the approach we were thinking of is for both countries to undertake smart agriculture projects simultaneously and then compare the outcomes.”

There is much learning and knowledge sharing to be gained from the C4IR network, he says. Through their respective centres, countries can delve into policy tools and implement pilot projects that address their respective digital transformation goals and priorities, he adds.

“If you look at what we have now in terms of technological advancement, there are technologies that are new to us, which lead to questions on how to govern these technologies,” says Fabian.

Pointing to proposed legislation to govern AI, for instance, he says that while the European Union has come up with the EU AI Act, it is also crucial for developing countries to have a position on the issue.

“If you just leave it to the EU, [they will] come up with their version of AI governance. We want a voice from the south, so it’s something that we should think about as well, especially with the current explosion of conversation on AI,” he says, adding that it is timely to revisit the Malaysia Artificial Intelligence Roadmap, what with the rise in popularity of AI tools like the AI chatbot, ChatGPT.

Just as most private sector organisations have guidelines — for example, on the use of ChatGPT and disclosure of information — this too is a matter of importance for the public sector. More so, Fabian says, because public sector organisations deal with sensitive information, which makes security a top priority. “So, what do we tell our public servants? What are the guidelines on its use?”

Coming up with a policy toolkit on the use of AI tools would be a matter for the C4IR to take up.

Malaysia’s C4IR will also further the work of MyDIGITAL Corporation in providing a platform for public and private sector collaboration to solve issues of policy or restrictions that might hinder the implementation of new digital projects.

This is familiar territory for the agency, following the establishment of the MyDIGITAL Catalytic Projects Task Force (CPTF) last year, which initiated the conversation on the hurdles faced in project implementation.

“The task force looked at five verticals — healthcare, transport, manufacturing, agriculture and utilities (power and water). There are many projects by the private sector that face impediments or speed bumps and we chose these five verticals because we felt that these would reap a lot of value when digitised. We engaged more than 90 public and private entities to delve into the potential problems that they face, and from there, identified the initiatives to address the issues,” says Fabian.

The task force received encouraging response from agriculture stakeholders; for instance, in addressing bottlenecks in the use of drone technology in precision farming. A series of workshops among the stakeholders, including the Civil Aviation Authority of Malaysia, Department of Survey and Mapping and the Task Force to Facilitate Business, were held to reduce the approval processing times for aerial work certificates for agriculture drone spraying operations.

Workshops with funding institutions, grant providers and agropreneurs also highlighted the mismatch in the knowledge of funding opportunities available, which has led to the underutilisation of grants. At the same time, these engagements also underscored the need for financial institutions to understand technology and provide avenues for funders to validate the farmers’ funding needs.

The CPTF also agreed that smart solutions would be utilised in the transport and logistics sector to enhance road safety, reduce congestion and provide a seamless mobility experience to road users. Furthermore, the CPTF supports the adoption of electric vehicles (EVs) in Malaysia, by facilitating and providing linkages to the government’s national agenda of commissioning 10,000 EV charging stations by 2025 under the Low Carbon Mobility Blueprint 2021-2030.

Through the establishment of the C4IR, the hope is that the so-called trust deficit in government programmes can be mitigated.

“We hope that the WEF brand name in this partnership will attract more private sector collaborations,” says Fabian.

Apart from the initiatives of the CPTF, he says there are five “needle movers” key to the country’s transformation into a digitally driven, high-income country and regional leader in digital economy. One of them is public sector data sharing and services, in which MyDIGITAL Corporation found that there are 700 rules and regulations that need to be amended to keep up with the country’s digitalisation agenda.

“There is no way that these amendments can be done one at a time, so there’s been a suggestion for an Omnibus Act to address this,” says Fabian.

Other “needle movers” include private sector data flows, building the connectivity and an enabling digital infrastructure, increasing the adoption of e-payments to move towards a cashless society, and digital ID and digital signatures to facilitate efficient and secure digital transactions.

With its implementation already into the second phase (focusing on driving digital transformation and inclusion), various key performance indicators (KPIs) show that the targets of the MDEB are well on track. In the economic sector, for example, at the end of 2022, the digital economy’s contribution to the country’s gross domestic product stood at 23.2%, inching closer to the 2025 target of 25.5%.

The 2025 target for 875,000 MSMEs (micro, small and medium enterprises) to adopt e-commerce, meanwhile, has been surpassed, says Fabian, pointing out that at the end of last year, there were a total of 1.09 million of these businesses, with the pandemic being a major catalyst for the pivot towards e-commerce.

The target of RM70 billion in investments in digitalisation by 2025 has also been surpassed. At the end of 2022, digital investments approved by the government totalled RM84.2 billion. The target for 2025 was also to increase the number of start-ups to 5,000, which stood at 3,423 as at May this year.

In the government sector, assessments are currently ongoing to gauge the public sector’s digital literacy (target of 100% by 2025). The government, through the Malaysian Administrative Modernisation and Management Planning Unit or Mampu, also reported that 66.24% of government services were end-to-end online — that is, services implemented entirely online from start to finish — as at end-2022. Usage of cloud storage across government was already at 84.55% at the end of last year.

Households with internet access increased to 96% in 2022 compared to 94.9% in 2021. At end-2022, 84% of students were said to have access to online learning.

For Fabian, one of the more heartening aspects of the country’s digital transformation journey thus far is the level of digital literacy in society — with some 90% on some form of social media. That said, Malaysians are predominantly digital consumers rather than creators, he laments.

To meet the goals set out in the MDEB, he feels that Malaysians should move from being consumers to creators and innovators. Such a leap, he says, is rooted in the general technological skills and innovative culture in the society.

“We need to seriously look at how to grow the local tech innovation ecosystem so that eventually, quality start-ups are born,” says Fabian.

What is key to formulating the innovation culture is getting people, especially students, more interested in science, technology and technologies related to Industry 4.0.

Last year, MyDIGITAL Corporation, in partnership with Petrosains, launched the MyDIGITAL 4IR Experience Centre and MyDIGITAL Maker Studio, which boast interactive and tangible touch points for students and the public to discover more about the impact of digital and 4IR technologies such as robotics, Internet of Things and machine learning. This year, Fabian hopes to expand the offerings by attracting the support of larger tech companies.

Although there are positives in the country’s digital transformation journey, Fabian believes there is room for improvement, especially in terms of helping citizens and organisations navigate the digitalisation ecosystem.

“It’s an issue of scale and navigation so that people know what to do,” he says, pointing out that in the case of support for MSME digitalisation, it is not the question of insufficient assistance but streamlining them so businesses know who to approach.

“There are so many start-up prog­rammes, so the question is how do we present it in a single window? How do we bring all the agencies together and make it more centric to the individual or entrepreneur so that they don’t have to run from one agency to another to get the support needed, whether it is financial, training or technical?” he asks rhethorically, disclosing that MyDIGITAL Corporation is currently mapping Malaysia’s start-up ecosystem at every stage of growth.

Establishing a kind of online one-stop centre was one of the policy recommendations highlighted in the World Bank’s Digitalizing SMEs to Boost Competitiveness report published last year. In it, the World Bank recommended that MyDIGITAL Corporation establish an online database and advertise all the available support programmes. Federal, state and local agencies should be required to enter detailed, up-to-date information of all the programmes they implement, and clear guidelines regarding programme eligibility.

This database would be easily searchable to allow SMEs to identify programmes that best meet their needs. SMEs could also benefit from greater hands-on support from a programme manager or a business unit to help navigate the application process. In the medium term, this one-stop shop could be upgraded to enable SMEs to apply to the different programmes through seamless online processes, monitor the status of their applications, and obtain feedback on reasons for approval/rejection to facilitate future applications.

“Another area that we’re working on is to bring greater awareness of AI to society,” Fabian says, adding that the agency is working with a multinational corporation to come up with easy-to-understand content aimed at dispelling prevailing myths of the impact of AI. “The plan is to present the content in four languages to be hosted on a website, which we hope to launch this year.”

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