KUALA LUMPUR: Malaysia has immense potential to be the regional data centre hub capable of handling more than 600 million users.
National Tech Association of Malaysia (Pikom) research committee chair Woon Tai Hai said that over the past few years, the country has seen many data centre investments, as global players see Malaysia as a strategic gateway into the Asian market.
“We have seen quite a number of data centres coming into Malaysia, even prominent players like Amazon, Google, Nvidia and Microsoft.
“We are working with the government to formulate policies in the areas of talent, natural resources like water and electricity that data centres utilise and also on how local players can be part in these investments,” he said at the launch of the Pikom Economic and Digital Job Market Outlook 2024 Report today.
He also said that Malaysia’s digital economy continues to have a significant impact and serves as a cornerstone for the country’s long-term growth and competitiveness.
“With strong government support, increasing private sector collaboration, and a growing pool of skilled digital professionals, Malaysia is well on our way to becoming a regional digital leader.
“The opportunities are immense, and if we remain focused on nurturing talent, fostering innovation and bridging salary gaps, we as a nation can continue to unlock the full potential of our digital economy and solidify our position on the global stage,” Woon said.
He also said the government, related agencies, and stakeholders must make concerted efforts to upskill and retain local digital talents rather than lose them to foreign players who offer salaries in US dollars.
“We must offer the best for local digital talents and prevent this ‘talent theft’. We cannot afford to see local data centre players losing out to foreign players,” Woon said.
Pikom has projected that the digital economy’s contribution to Malaysia’s gross domestic product will rise to 24.1% in 2024 and 24.8% in 2025, based on geometric growth extrapolation and national economy forecasts from Department of Statistics Malaysia and Bank Negara Malaysia.
While this represents steady growth compared to 23.5% in 2023, it still falls short of the government’s target of a 25.5% contribution by 2025.
The report also noted that the digital economy in Malaysia is expected to recover and grow at robust rates of 7.6% in 2024 and 7.7% in 2025, following a significant slowdown to 3.9% in 2023.
This positive outlook is underpinned by an increase in digital investments and advancements in the sector, with earlier growth trends peaking at 14.3% in 2022 and steady expansions seen since 2019.
These projections are based on calculations using geometric means, reflecting confidence in the country’s digital economy’s resilience and potential for sustained development.
The report also showed that Malaysia’s digital economy supports the national economy through five key components, with e-commerce as the largest contributor.
This is in addition to the broader ICT industry, which encompasses ICT services, ICT manufacturing, ICT trade, and content and media.
Pikom chairman Ong Chin Seong said digital talents in Malaysia are seeing higher salaries as demand surges for skills in artificial intelligence (AI), data science, cloud computing and cybersecurity, driven by the rapid digital adoption across the nation.
Salary growth is projected to stabilise at 7.19% in 2024 and 7.12% in 2025.
“The double-digit salary growth of 13.90% recorded in 2023 was a one-off adjustment following the salary stagnation during the pandemic years.
“We are pleased to see this healthy adjustment to above 7%, which is reflective of a robust digital economy,” said Ong.
He said sustainable salary increments are critical to addressing the ongoing brain drain of digital talents to economies offering significantly higher remuneration.
