MALAYSIA’S middle market sized companies risk falling behind regional peers unless there is a continued commitment to structural shifts in digitisation and technology innovation across businesses and their industry groups.
Andrew Sill, Country Head of Commercial Banking, HSBC Malaysia commented that over the past 18 months, COVID-19-induced lockdowns have driven many Malaysian businesses to accelerate their digital connection with customers, suppliers and employees.
“This has been an incredible commercial enabler. However, HSBC is observing that some businesses – particularly in the mid-market space – are slowing down their investment and so the risk is that businesses are seeing digital adoption as a short-term switch rather than a strategic shift.”
According to Sill, having made the shift to digital, it is crucial that companies forge on and not let the momentum stall.
The soft macroeconomic and revenue conditions means that businesses are clearly looking at their costs, he added.
“However, digital adoption and continued innovation cannot be seen as ‘nice to have’ but instead must be seen as a business imperative.
This requires some shifts in business approach, including changing management mindset and mobilising industries as a whole,” he elaborated.
Driving a technology and digital-first mindset
More and more businesses are starting to use new trends and technologies such as Artificial Intelligence, big data analytics, machine learning and robotics, to pivot and transform their companies – this needs a continued investment.
In addition to this, what is needed to transform a business is for companies to prioritise having a technology and digital-first mindset.
“Embedding a technology innovation mindset, and putting money into innovation is a hard sell amid falling revenues, but the reality is that continuous investment will open up value-creation possibilities and create sustainable competitive advantage,” Sill pointed out.
Organising and mobilising industries to be digital first
Innovation and digital reform must also go beyond individual businesses to also include an all-of-industry response, particularly within the supply chains that matter so much to Malaysia.
Tangible steps will help to attract investment from abroad.
First, there is an opportunity for industries to create stronger ecosystems by moving and mobilising its sector in the same direction.
A second avenue is in elevating an industry’s digital standards and practices.
A good example is the development of trade digitisation, including removing legal requirements of physical documentation.
Lockdowns meant that essential ‘in-person’ reviews of billions of documents, that cross the trading system on any given day, have been jeopardised.
“Rising incomes, consumption and manufacturing have made Malaysia an attractive investment destination.
“Moving forward, Malaysia’s success will increasingly be shaped by further productivity increases, ease of doing business, and strong regulatory frameworks.
“Underpinning all of this will be the full embrace by businesses and industry groups to digital technology and innovation.
But this is not something that can wait,” Sill concluded. – Oct 7, 2021.
Pic credit: iStock
