THE pivot towards digital economy could not have come at a better time for Sarawak when global economies are hard hit by the Covid-19 pandemic, rendering many countries under some form of lockdown and seeing the trend of working from home taking off.
In formulating the Sarawak government’s post-Covid-19 exit economic strategy, Chief Minister Datuk Patinggi Abang Johari Tun Openg said one of the core principles the state has anchored on is a digital economy, which will be intensified across all sectors to increase economic productivity and competitiveness.
Spearheading the leap towards a digital economy is the Sarawak Multimedia Authority (SMA), an agency launched by the Chief Minister in 2017, to oversee and facilitate the development and implementation of communication multimedia and the state’s digital economy initiatives.
Fielding questions from thesundaypost, SMA general manager Dr Zaidi Razak said the scope of the state’s digital economy policies and initiatives under the agency comprised eight sectors and seven enablers.
The eight sectors are agriculture, manufacturing-industry 4.0, tourism, smart city, digital health, e-commerce, digital government, and social programmes; while the seven economy enablers comprise digital infrastructure, digital skills and talent management, digital and data, cybersecurity, research and development, innovation and entrepreneurship, and digital inclusivity.
The pivot towards digital economy in Sarawak is aimed at promoting social inclusivity and environmental sustainability while striving to contribute to the state 2030 economic goals in line with the formation of the Sarawak Economic Action Council (SEAC).
Zaidi said digital economy covers the aspects of public, private and citizen partnerships, connectivity and infrastructure, regulatory framework, talent, innovation and digital usage, adding that Sarawak’s future lies in the digital economy, echoing the Chief Minister’s stand that Sarawak must not be left behind in digital technology adoption and digital economic growth.
“For instance, digital banking such as Sarawak Pay ensures the circulation of economic activities in the market apart from connecting the local business with international markets, indirectly providing job opportunities to the market.”
Sarawak Pay is a fintech platform launched by the state government in 2017 to provide a secure, fast and convenient mobile e-wallet and digital payment transactions in line with one of the strategic actions to propel the state into the digital economy.
According to a survey by the Sarawak Development Institute, the digital literary level of rural communities in six divisions in the state – Kuching, Serian, Samarahan, Sarikei, Sibu, and Mukah – stands at 48.35 per cent.
Digital literary level can be explained as the ability to utilise information and communication technologies (ICTs) via a digital platform. The rates for the remaining six divisions in Sarawak will be completed by 2022.
“Based on the figures from the Department of Statistics Malaysia, the percentage of households having access to the internet in 2018 was at 80.8 per cent,” Zaidi noted.
As telecommunication towers in rural areas are part of the critical infrastructure to propel towards the digital economy, Zaidi shared that 100 towers under Sarawak Multimedia Authority Rural Telecommunication (SMART) 300 programme had completed as of July this year and most, built over the years, are mainly concentrated in Sri Aman (82 towers), Betong (39), Kuching (32), and Sarikei (32).
Five hundred more towers will be built and the project is expected to be completed by 2021, according to the SMA general manager.
Zaidi pointed out that one of the many advantages offered by the digital economy is its ability to bring much-needed development and service to the rural areas and hard-to-reach locations such as through the partnership between Sarawak Pay and Bank Simpanan Nasional (BSN).
“Online transfer facilities are provided to places that do not yet have bank branches and automatic teller machines (ATMs) through the advantages from the merger of BSN Bank Agent with Sarawak Pay cashless payment management services.
“Moreover, Sarawak Pay provides public bill payment services or online purchases, using smart phones in the village and the city.”
He said as of July this year, Sarawak Pay had registered over 400,000 users, amounting to 14 per cent of the state’s population, and Sarawak ID, a digital identity system to access the state government digital services, has over 530,000 users.
“Sarawak Pay is generating RM500 million worth of business transactions, creating spillover effects, including more income to small businesses and job openings.”
Zaidi revealed that the smart agriculture approach at the Rampangi Permanent Food Park comprising 40 net houses and operated by 14 pioneer farmers, had recorded a significant increase in agriculture yield volumes, products quality, and an over 30 per cent increase in income for the participating farmers.
“Cooperation between SMA and the Department of Agriculture will see 80 per cent of agricultural stations in Sarawak equipped with ICT facilities in line with the government’s vision to strengthen the agricultural sector by 2030.”
He said some of the other digital initiatives, including telemedicine, could be improved to provide healthcare services in the interior, adding that the digital government concept would be able to reduce unnecessary commute for the people.
Spurring economic growth
Zaidi pointed out that the digital economy would accelerate the state’s economic growth by two per cent annually, resulting from the improvement of digital infrastructure, covering 20 per cent more of the populated areas, and the implementation of strategic initiatives to encourage innovation, investment inflow and business activities.
“In the longer term, we expect incomes from digital economic activities to continue increasing as the next phase of the digital economic strategy is to access markets beyond Sarawak.”
He acknowledged many small and medium enterprises were still facing challenges in adapting to the requirements of the digital economy due to the lack of talents and expertise.
“Based on a survey on more than 500 respondents from the business community, 72 per cent felt they faced difficulties in getting the right employees to support their business. A majority hoped for more business-friendly regulations and better access to information.”
Zaidi said new SMEs also faced challenges of sustainability in a competitive market as well as marketing and internal administrative management.
Regardless, he pointed out that the government would address the difficulties faced by SMEs as the backbone of the economy, by providing facilities such as trusted e-commerce platforms, technology assistance on boarding support and exposure and mentorship for start-ups.
As for creating a vibrant start-up ecosystem, Zaidi said Sarawak was still in an early stage of nurturing the ideal environment for such start-ups to grow and expand.
“We’re still young – just like the team leading all those young people (start-ups operators) – not just the start-ups themselves but also the private sector partners who have been supporting these start-ups.”
So far, he said five SMA-funded innovation hubs were located in the state – two in Kuching and one each in Sarikei, Miri, and Bintulu – while several more were being planned for Sibu, Samarahan, Mukah and Kapit.
“By 2021, all divisions will have at least one of these (innovation hubs), not to mention the support we have in private sectors innovation spaces like iCube, Plux and the rest. These are the centres where our start-ups are grown and developed.”
He noted that a few start-ups with the agency’s support had achieved a statewide scale with some having expanded into Peninsular Malaysia and Sabah.
“That’s the power of e-commerce and the digital economy. It accelerates the growth of these highly-innovative companies. We look forward to supporting and helping more of these entrepreneurs succeed on the global state,” Zaidi said.