“Most importantly, it can increase productivity, value-adding jobs and long-term development towards a high income state,”
Prof Geoffrey Williams
Basically it refers to the worldwide network of economic activities, commercial transactions and professional interactions that are enabled by information and communications technologies (ICT). It can be summed up as the economy based on digital technologies.
KUCHING: Sarawak started to digitalise its economy in 2018, shifting its dependence on non-renewable resources and leapfroging into the next generation economy.
Prof Geoffrey Williams from Malaysia University of Science and Technology (MUST) said this was hugely important to the largest state in Malaysia to reduce its dependence on a an economy based on commodities such as logging, plantation, and oil and gas.
So, what is meant by digital economy?
Williams said it encompasses economic and social activities that involve the production and use of digital technology by individuals, businesses and government. It uses digital technologies in production, distribution and transactions across all areas of business, products, services and even government activities.
It ranges from the actual research and development (R&D) and production of the technologies right through to the use of technology in everyday activities from automation, and artificial intelligence in factories to shopping, and banking.
“Digital economy includes everything from robotics, Internet of Things (IoT) to e-commerce, e-wallets and e-hailing. Most importantly, it can increase productivity, value-adding jobs and long-term development towards a high-income state,” he told New Sarawak Tribune recently.
“But, it is also essential that rural communities in Sarawak are connected to networks for the digital economy plan to be successful because it offers them access to digital markets even if logistics are remote,” he said.
Last month, Premier Datuk Patinggi Tan Sri Abang Johari said that Sarawak’s Digital Economy Blueprint has the roadmap to secure its future as a modern and leading digital economy and society by 2030.
The digital blueprint will focus on nurturing an integrated ecosystem to foster an inclusive digital society, building the right foundations to grow the digital economy, as well as fostering business growth and a vibrant technology sector.
Abang Johari also said the state government will focus on not only growing the Gross Domestic Products (GDP) but also ensuring the growth is translated to every Sarawakian.
“We want to significantly increase the average household income from the current RM5,000 to RM16,000 per month by 2030, which will put Sarawak ahead of Malaysia as a whole,” he said when opening the International Digital Economic Conference Sarawak 2022 (IDECS 2022).
He said the state needs to achieve an economic growth rate of between six and eight per cent annually to double the size of its economy to RM282 billion to become a high-income and advanced state by 2030.
Williams opined that the digital blueprint would be an important step in adding momentum to that development process as the digitalisation in Sarawak has been slower than it could have been thus far.
“Hence, there must be a new plan or initiative to further speed up the digitalisation process in Sarawak as there are a lot of areas still not covered by network access as well as other infrastructure and human capital development,” he added.
The economist said it would be possible for Sarawak to achieve between six and eight per cent economic growth annually – with a strong analysis of the current position and some good forecasting of possible future paths.
“Sarawak must have an independent analysis of its potential. Good forecasts are essential because they need to choose the policies which maximise the return. It is also essential to a good analysis of the cost-benefits to get the proper policy mix,” he stressed.
On Sarawak’s intention to embark further into the hydrogen economy, Williams said more studies need to be done to determine if it would be economically viable.
“Hydrogen economy is about switching away from carbon-based fuel in energy and electricity generation.
It has many advantages and advocates but needs to be studied further to see if it is economically viable, especially since Sarawak already has renewable energy sources in plentiful supply,” he added.
Meanwhile, Associate Professor in the Faculty of Economics and Business (FEB), Universiti Malaysia Sarawak (UNIMAS) Dr Evan Lau said digital transformation and the revolution started before the COVID-19 pandemic and Sarawak does not want to leave behind in this development.
Owing to that, the Sarawak government invested in the digitalization journey with goals and objectives to improve the livelihood of Sarawakians.
Digital economy, he said, could be viewed as the economy that is based on digital computing technologies and connectivity among the stakeholders in the digital ecosystem.
He said data would be the new oil and crucial for development and transformation towards digitalization as it would drive business productivity that eventually promotes sustainable development in the economy.
At the centre of this transformation were active players such as device connectivity through the Internet of Things (IoT) paired with rapid data diffusion creating prospects of digitally fuelled growth in the economy. With this new source of growth, it would uplift Sarawak into a developed and high-income state.
“Digitalization offers endless and existing possibilities and I always believe that digital form would promote immortality,” he said.
“Personally for me, what is more, important is to ensure no one was left behind in this radical development change while promoting inclusive growth and maximising the economic value globally in the VUCA (volatility, uncertainty, complexity and ambiguity) environment,” he added.
Lau said developing an inclusive digital economy will require sustained, coherent and collective effort among stakeholders across all walks of life in Sarawak.
“The question of how this transformation would benefit the rural communities as part of their life would also be crucial. This is necessary, especially in the post-pandemic where some quarters of society will choose to have basic needs over digital technology.”
“We need to ensure a more equitable digital economy for all in Sarawak and the need to upskill the society would enable a fairly distribution of the gains and minimize the losses,” he said.
The digital transformation, Lau opined, of course, would uplift and increase household income gradually. But along the way, society must also be equipped with the necessary skills for that purpose.
He said collaboration and commitment would be important among government, private and society to develop a mindset to adapt to, benefit from, and minimize the risks of digitalization.
