Malaysia needs to invest more in infrastructure that can boost digital penetration to attract more Fortune 500 companies, as technology adaptation is seen as the key to future quality investment.

Sage Asia vice-president and managing director Arlene Wherrett said since Malaysia first stepped into the industrialisation game, it has been regarded as an attractive destination for investment due to its low cost of doing business and labour.

“I believe that Malaysia can move up the chain of investment if technological infrastructure such as the availability of 5G internet and increased internet penetration that would attract more Fortune 500 companies,” she told Bernama in an interview recently.

Malaysia aims to roll out 5G next year and the government has invested RM21.6 bil for the five-year National Fiberisation and Connectivity Plan NFCP which would ensure quality high-speed connectivity throughout the country.

As part of the NFCP, the government will also increase connectivity in rural areas, particularly in Sabah and Sarawak.

Wherrett said Malaysia has also been ranked as one of the leading countries in the ease of doing business by the World Bank, proving that the country is on the right track in attracting investment.

Malaysia climbed to the 15th position in the World Bank Doing Business 2019 Report from its 24th position the year before.

However, Wherrett said there are several segments that Malaysia needs to improve within the digital landscape in order to attract these companies to set their base here.

A recent research conducted by Sage titled “We Power the Nation -- People & Productivity” revealed that about RM6.46 mil is lost every hour from administration activities in Malaysia as time is spent in doing menial works.

“In a year, Malaysian businesses suffer a staggering loss of RM56.6 bil from administration activities,” Wherrett said.

She said based on the study, Malaysian businesses were well aware that digital upskilling was pertinent to solving this productivity puzzle.

“Almost half of the business leaders in Malaysia consider digital skills a priority investment, while 78 percent of all businesses plan on digital skills investments.

“However, despite the high level of awareness on the importance of digital adaptation in businesses, small-medium enterprises (SMEs) are still complacent in moving up or upskilling their workforce to adopt automation,” she said.

Asked what is stopping SMEs from adapting to automation in their business model, she said most of the barriers derived from lack of knowledge on how to adapt to digital tools in their business processes.

To minimise this gap, she said there must be a review of the education system besides upskilling the existing workforce.

"A robust Malaysian education system that embodies a new and engaging curriculum to introduce technologies early, is vital to prepare young adults before entering the workforce of the future.

“Education is one of the key reasons why Malaysia is left behind in the digital race in Southeast Asia. If we manage to minimise the gap and place technology as the frontrunner, we will be able to catch up with fast emerging economies like Vietnam,” she said. -Bernama