AI, Digital Infrastructure Investment Key To Malaysia's Economic Transformation - Expert
By Mohamad Syazwan Mustafa
JOHOR BAHRU, April 30 (Bernama) -- Artificial intelligence (AI) and a surge in digital infrastructure investment, particularly data centres, are expected to be key drivers of Malaysia's economic growth over the next five to 10 years, thus reshaping the country's economic structure from a labour-intensive model to a high-value technology and data-based economy.
Chief executive officer and director of the Institute for Data Innovation and Artificial Intelligence (IDEA-AI), which operates in Victoria, Australia and Kuala Lumpur, Prof Dr Mohd Saberi Mohamad said Malaysia is now on the right track in strengthening the foundations of the digital economy through large-scale investments in data centres, cloud services and a maturing national digital infrastructure.
"The use of AI in Malaysia has now progressed from mere experiments to real applications in key sectors such as manufacturing, finance and services. In the medium term, this transition will move to a more strategic level involving decision-making and operational optimisation," he told Bernama.
He said Malaysia is currently in the early growth phase where the use of AI is rapidly expanding to include automation, chatbots and data analytics before moving to more complex levels of optimisation.
According to him, the manufacturing sector is expected to receive the fastest impact through the use of AI for quality control, predictive maintenance and production optimisation, while the financial sector is now leveraging the technology for more accurate fraud detection and risk analysis.
The service sector, including retail and hospitality, is showing immediate impact through recommendation systems that improve customer experience, in addition to the e-commerce sector that is reaping rapid returns from personalisation and accurate consumer demand forecasts.
Mohd Saberi, who also serves as an adjunct professor at the University of Malaya-Wales, Multimedia University, United Arab Emirates University, and Universitas Brawijaya, said the surge in investment from global companies in digital infrastructure proves investors' high confidence in the potential of AI as an important component of the country's economic growth.
With over 20 years of experience in the field of AI, Mohd Saberi stressed that this transformation of the economic structure will drive an extraordinary demand for highly skilled jobs, thus demanding a drastic shift in the national workforce landscape to a more data-centric one.
However, he is of the view that the great potential of this technology can only be fully realised if Malaysia is able to address the critical challenges related to the skills gap and AI leadership issues in both the public and private sectors.
"We need leaders who are specifically trained in AI leadership, not just traditional corporate leadership. Without clear leadership in formulating strategy and governance, the economic impact of AI will be slower and less comprehensive," he said.
In line with this view, Professor of Economics at the Faculty of Management, Universiti Teknologi Malaysia (UTM), Dr Nanthakumar Loganathan, said the economic spillover from this high-tech investment should be balanced with the empowerment of local small and medium enterprises (SMEs) to ensure more inclusive growth.
He was of the view that the development of data centres in strategic regions such as Johor should function as a main gateway to enable local entrepreneurs to internationalise their products through digital platforms, matching the success trajectory recorded by advanced economies.
"In Malaysia, relevant government agencies need to take steps to provide guidance and training involving both parties so that the benefits of data centre development are clearly visible and contribute to the country's economic growth," he said.
Nanthakumar also warned of the risk of foreign business monopolisation that could affect the competitiveness of domestic businesses if FDI growth is not balanced with injections of funds and technological capital assistance for local SMEs.
"The imbalance between FDI flows and affordable housing will become large if it is not curbed from the beginning," he said.
-- BERNAMA