Malaysia risks slipping further if gaps not addressed, warns study


CA APJ - Kenneth Arrendondo  

Photo - Kenneth Arredondo, Asia Pacific and Japan President & General Manager, CA Technologies.


According to new research to gauge the readiness of 10 Asia Pacific & Japan (APJ) markets to perform successfully in today's digital world, Malaysia has drawn mainly middling scores in many parameters, said IT management solutions provider CA Technologies.

Commissioned by CA Technologies and conducted by research firm TRPC, the inaugural edition of the Asia Pacific & Japan (APJ) Application Economy Index (AEI) 2016 was unveiled by CA Technologies' Asia Pacific and Japan president & general manager Kenneth Arredondo during a regional event in Singapore recently.

The study found that Malaysia ranked 6th in the region in terms of its readiness to integrate, develop and benefit from application usage. It is ahead of China, Thailand, India and Indonesia, but behind Singapore, Australia, South Korea, Japan and Hong Kong.

Commenting on the Malaysia findings, TRPC managing director Lim May-Ann said Singapore, Australia, South Korea, Japan, and Hong Kong were most ready to maximise opportunities provided by the application economy, placing them in the Disruptors group while Malaysia and China formed the Challengers group in the middle. Thailand, India and Indonesia make up the Mainstream group that needs to focus on developing conditions for businesses to thrive in the application economy.

"Regardless of whether they are in the Disruptors, Challengers or Mainstream group, markets will still need to focus on creating conditions for businesses to thrive in the application economy," said Lim.

"They can do so by continuing to do well in their key success characteristics, while mitigating current and potential weaknesses," she said, adding that Malaysia risks slipping further if gaps are not addressed

In an increasingly connected world where devices talk to each other, storefronts fit in pockets and services are accessible over the internet - applications are everywhere. "This means every business is really in the software business and needs to embrace digital transformation."
 The Index criteria

She said the 10 parameters of the Application Economy Index (AEI2016) and five Market Potential Accelerators were sourced from publicly-available indices. As indicators used had different units and scales, any indicator that did not use a 10-point scale was normalised to make the indicator values comparable, as well as to construct aggregate scores for each economy.
The index evaluated three main pillars that are critical for a vibrant application economy, with each pillar comprising various parameters:
- Government Use and Support of Technology and Innovation: To develop sound technology policies and promote innovation, governments themselves should understand and use software and applications.
- Internet and Mobile Infrastructure: Without the necessary infrastructure and enabled access to technology, an application economy cannot fully develop. Basic connectivity and network backbones must be in place, along with an environment which supports business growth and transformation.
- Business Agility: The ability to move nimbly and quickly in driving - and capturing - market disruption. For this to be possible, countries need to have an environment conducive for entrepreneurship and new forms of commerce to happen.

Malaysia results
Lim said Malaysia scored in the mid-range across most parameters. Government use and support of technology and innovation was decent, although more can be done to incentivise innovation, which the country ranked seventh for.

The lowest scores were in the pillar of Internet and mobile infrastructure, with Malaysia in the bottom half for Internet and smartphone penetration (sixth for both) and average mobile connection speed (eighth).

Malaysia's business agility scores were varied; while it came in first for strength of cybersecurity, it also ranked near the bottom (eighth) for debit and credit card penetration, suggesting that a more conducive climate for businesses to operate is needed.

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