Malaysia’s middle market sized companies risk falling behind regional peers unless there is a continued commitment to structural shifts in digitisation and technology innovation across businesses and their industry groups, a senior HSBC spokesperson said.
Having made the shift to digital, companies need to forge on and not let momentum stall. It’s particularly important for Malaysian companies for three reasons:
1. Safeguarding key sectors: including electronics, textiles, automotive, and pharmaceuticals – requires a shift in thinking and a clear commitment to digitisation and technology innovation across business and industry.
2. To capture shifting supply chains: The EY Capital Confidence Barometer survey reveals that 67% of Asia-Pacific executives are taking steps to change supply chains, compared to 52% globally. As Southeast Asia becomes more central to global supply chains, firms will use technology, and particularly data, to establish relevance, value and stickiness.
3. To match consumer needs: ASEAN has more consumers coming online than any other region in the world, according to Bain, with 40million new users come online for the first time in 2020 alone.
To reach these consumers, businesses need to make a permanent pivot to digital.
HSBC has outlined some ways these shifts can be made:
Driving a technology and digital-first mindset is required
More and more businesses are starting to use new trends and technologies such as Artificial Intelligence, Big Data Analytics, Machine Learning, and Robotics, to pivot and transform their companies – this needs a continued investment. In addition to this, what is needed to transform a business is for companies to prioritise having a technology and digital-first mindset.
“Embedding a technology innovation mindset, and putting money into innovation is a hard sell amid falling revenues, but the reality is that continuous investment will open up value-creation possibilities and create sustainable competitive advantage,” added Andrew Sill, Country Head of Commercial Banking, HSBC Malaysia.
Organising and mobilising industries to be digital first
Innovation and digital reform must also go beyond individual businesses to also include an allof-industry response, particularly within the supply chains that matter so much to Malaysia. Tangible steps will help to attract investment from abroad.
First, there is an opportunity for industries to create stronger ecosystems by moving and mobilising its sector in the same direction. A second avenue is in elevating an industry’s digital standards and practices.
A good example is the development of trade digitisation, including removing legal requirements of physical documentation. Lockdowns meant that essential “in-person” reviews of billions of documents, that cross the trading system on any given day, have been jeopardised.
“Rising incomes, consumption and manufacturing have made Malaysia an attractive investment destination. Moving forward, Malaysia’s success will increasingly be shaped by further productivity increases, ease of doing business, and strong regulatory frameworks. Underpinning all of this will be the full embrace by businesses and industry groups to digital technology and innovation. But this is not something that can wait,” Sill concluded.