Gartner Commentary for Malaysia Budget 2019

Malaysia’s new government has made progress towards preparing the nation to become a fully digital economy. The emphasis on the National Industry 4.0 Policy in Budget 2019 will contribute to the wider adoption of
technologies such as the Internet of Things (IoT), digital and automation services, and accelerate Malaysia’s growth into a digital nation on par with other developed economies.

The allocation of RM210 million to help businesses transition to Industry 4.0 through the Readiness Assessment Programme reinforces the government’s commitment to upskilling the workforce and driving Malaysia’s digital journey 2 . According to Gartner’s 2018 CIO Agenda, CIOs list the lack of talent and skill shortage as one of the main barriers to digital transformation within organisations. We believe that this initiative is a step in the right direction towards overcoming that barrier 3 .

We are very supportive of the plan to offer RM2 billion in financial assistance to encourage SMEs to adopt Industry 4.0 related technologies 4 , especially when these digital services will help open up new markets for the industry. This is further supported by the government’s decision to invest RM3 billion in the Industry Digitalisation Transformation Fund to drive implementation of smart technologies including automation and artificial intelligence (AI). SMEs want to digitise but the lack of financial resources is hindering progress. This assistance, if channelled and utilized properly, is a positive step towards driving Industry 4.0 in Malaysia and supporting SMEs as they continue embracing digital transformation.

This is in line with Gartner’s predictions that every industry will be transformed by digital business by 2025.
Budget 2019 is a testament to the new government’s ambition to accelerate the adoption of Industry 4.0 in Malaysia among businesses. Gartner is confident that with the initiatives announced in Budget 2019, Malaysia continues to be on the right track towards becoming a fully digitised nation.

Commentary by : Tervinderjit (TJ) Singh, Research Vice President at Gartner


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