ICT industry likely to grow 12pc

Published on: Saturday, December 31, 2005

Kuala Lumpur: Pikom, the Association of Computer and Multimedia Industry of Malaysia, has forecast a 12 percent growth next year for the country's information communications technology (ICT) industry.

This would compare with a 10 percent growth in 2005, it said in a statement Friday.

According to Digital Planet, a publication of the World IT and Services Alliance (WITSA), Malaysia's total ICT spending reached RM31.92 billion (US$8.4 billion) in 2005.

Pikom is a member of WITSA.

The bulk of ICT spending in 2005 was in the communications sector which took up RM21.66 billion (US$5.7 billion), followed by hardware spending about RM5.7 billion (US$1.5 billion), software RM2.66 billion (US$700 million) and IT Services RM1.9 billion (US$500 million).

Pikom chairman, Lee Boon Kok, said the association was bullish on the industry's outlook in 2006.

He said the economic indicators were pointing to a higher overall growth for the national economy in 2006 and that this would augur well for the ICT industry.

Lee said the outsourcing and shared services industry were high growth sectors due to the positioning of Malaysia as a shared services hub and the aggressive promotion of Malaysia as a choice location.

IDC has projected that the information systems outsourcing market will grow by 22.5 percent over a five-year period.

While lower than initially estimated, this still represents one of the fastest growing segments of the industry.

The other sectors, systems integration, consulting, retail and distribution are expected to perform in tandem with the average growth of the industry, between 10 and 15 percent.

Lee said that while Pikom hoped to see all economic sectors investing in ICT to improve the competitiveness of their business, the association will focus on building the market and bridging the digital divide. He said that it was important for local industry players to continuously upgrade their ICT capability and capacity and confidently venture into the regional markets.

"One of the areas that we need to improve is our capacity and skills level of our ICT fraternity. The announcement of the ICT Development Institute by the Prime Minister is timely in addressing the capacity building issues faced by the industry. The other area is marketing our product and services outside of this country," he said.

He pointed that the challenge was on the local companies to collectively harness local talents and prepare to offer their products and services to the global market.

"It is encouraging to see several Pikom member companies selling their products and services in countries across this region. However, we should look even further a field, especially to developed markets like Japan, Europe, and the USA," he said.

"Pikom will assist our members who are keen to explore markets abroad. As a member of WITSA, we are able to leverage on our global connections to assist our members in making forays into new markets," he said.

The local ICT industry currently contributes about 7.5 percent to the total Gross Domestic Product.

"Our goal is by 2008, the ICT component of the GDP will exceed 10 percent. To achieve this objective, the government needs to make ICT as the key driver in improving various economic sectors as we strongly believe that the level of ICT adoption in the country is directly linked to its competitiveness in the information age," he said.

One of the key initiatives by Pikom and the Multimedia Development Corporation is the successful bidding to host the World Congress on Information Technology in 2008 (WCIT 2008). The event is expected to bring the focus of international ICT players to Malaysia. - Bernama