ICT industry expects further impetus

The Star Online

Business Thursday August 31, 2006

PETALING JAYA: Malaysia's information and communications technology (ICT) industry has had a good run under the past two national budgets.

In addition, the first half of the year also saw the Ninth Malaysia Plan (9MP) and more recently, the Third Industrial Master Plan (IMP3).

While these initiatives are to further stimulate growth of Malaysia’s economy through areas such as agriculture, manufacturing and services, the Government has also called on these sectors to exploit the use of ICT in raising the bar on its products and competitiveness in the global market.

RAM Consultancy Services chief economist Dr Yeah Kim Leng said the ICT sector was currently enjoying plenty of incentives under the umbrella of the Multimedia Super Corridor (MSC).

Dr Yeah Kim Leng

He believes ICT initiatives under Budget 2007 would mostly tend towards regulatory policies and implementation.

“Given Malaysia's competitive advantage, the push for the ICT sector would be to attract foreign direct investments (FDI),” Yeah toldStarBiz. He added that the investments would likely be targeted at the shared services outsourcing (SSO) sector.

OSK Securities economist Sia Ket Ee said technology companies were already enjoying pioneer status while the SSO sector had seen the establishment of call centres and back-end support operations.

He reckons the Government would likely continue drawing investments into the MSC under Budget 2007.

Local industry players, however, believe that the upcoming budget would closely reflect the objectives of the 9MP.

Basis Bay Group chief executive officer Praba Thiagarajah hopes Budget 2007 will stimulate growth for the ICT and SSO industry, especially to international markets.

Praba Thiagarajah

He believes small and medium enterprises (SME) should be given more incentives and grants to increase their investments in e-commerce and ICT services, especially those related to SSO.

“Tax benefits and waivers could be extended to companies that outsource functions and services to local SSO and MSC organisations,” he said, adding that further incentives could be in the form of product and market development grants.

ISS Consulting (M) Sdn Bhd country manager Sanjay Nair believes that biotechnology and ICT entrepreneurs were likely recipients for added incentives under Budget 2007.

“The productivity, efficiency, income and wealth generating potential of the agricultural sector will be enhanced through the wider application of modern technology and ICT,” he said.

Sanjay pointing out that the Government was gearing up to transform the sector into a modern, dynamic and competitive one.

Nair anticipates that the Government may also nurture areas such as software development, digital content creation, information security and bio informatics under Budget 2007.

Industry leaders such as Intel Malaysia hoped the Government would accelerate the deployment of Worldwide Interoperability for Microwave Access (WiMAX) by approving the standards and reducing procedural challenges for telecommunications companies to deploy the technology.

Abdul Rahman

“WiMAX will complement the rollout of the national MyICMS886 strategy and help the Government meet its target of achieving broadband penetration of 15% of the population in 2010,” assembly and testing managing director K.C. Yoon said in a statement.

Microsoft Malaysia public sector director Abdul Rahman Abu Haniffa expects the Government to roll out additional policies and incentives that will encourage SMEs to embrace ICT as a strategy for operational efficiency.

He believes information technology (IT) professionals and developers need to harness IT to create competitive advantage and fuel business growth within their organisations.

IBM Malaysia managing director Voon Seng Chuan said the Government should leverage on the 9MP to further drive the acceptance and adoption of innovation for corporate Malaysia.

He added that collaboration could be a platform for innovation and the country could accelerate this by bringing in experts with transferable skills and experience not available in the country.