August 2021 was a special month for the Malaysia Digital Economy Corporation (MDEC). With a month-long event called Malaysia Tech Month, it celebrated its silver jubilee — 25 years of “Driving Digital Transformation” in Malaysia.
This was set against an interesting backdrop of the preceding 12 months, which saw a massive turnover in the leadership team, with chairman Rais Hussin and then CEO Surina Shukri championing the “Reinvent” mantra as a rallying cry for this change. Surina herself would step down right smack in the middle of Malaysia Tech Month and have her closing speech at the event as her final act as MDEC’s CEO.
On Sept 1, Mahadhir Aziz was announced as the new CEO of MDEC. He finds himself in a unique position rarely offered to an incoming CEO: a brand-new team of highly competent executives and an ecosystem yearning for MDEC to step up to champion the next 25 years of digital transformation for the nation.
Mahadhir has a blank canvas on which to take MDEC into the future — a future built on a foundation set by the many leaders who came before him. As partners in the ecosystem, we have seen that when MDEC is at its best, it can truly be a champion for the nation.
Here are our thoughts on how Mahadhir can change the game in his first 100 days.
Articulate a clear, bold vision
A refrain that is commonly heard in the industry is we do not really know the exact role MDEC aims to play in the ecosystem. Cynics even question MDEC’s relevance in today’s highly globalised environment.
In 1996, MDEC (then MDC) was the sole government agency in the information technology sector. However, fast forward 25 years and there are many agencies that focus on different aspects of developing the digital economy in Malaysia.
MDEC has, however, a strong heritage and legacy to live up to. But to do this, it needs to go beyond spouting nice slogans and truly articulate what it stands for and aims to achieve in the coming years.
The world has changed in many ways since the 1990s when MDEC was formed. The pandemic has also had a major impact not just on the economy and our health but also in terms of technology creation and adoption.
The workforce of the future is already global and the fact that we have worked from home for the last 18 months means the way we work has also changed. Do we even need a technology hub like Cyberjaya anymore?
We have reached a technology inflection point where many of the old policies and initiatives may no longer be relevant. The opportunity for Mahadhir in the first 100 days is to share with his team at MDEC, the technology ecosystem and the rakyat as a whole, his vision for MDEC and how it will change the Malaysian digital economy for the better.
Be more impact-driven
The focus of MDEC should not be merely on creating new programmes or initiatives. MDEC must be more impact-driven and the programmes and initiatives must clearly articulate the desired economic or societal impact — improving citizens’ lives, creating opportunities to drive business innovation and growth, helping small and medium enterprises (SMEs) to really adopt and use technology to improve productivity and profitability, and ensuring that Malaysian technology is widely adopted as this will further spur the growth of local start-ups and scale-ups.
The key performance indicators (KPIs) and expected impact should be stated upfront and made public so that the ecosystem knows how much impact MDEC expects to create and this impact must be independently measured using proper economic and social measures, so that the rakyat can see where the impact has been made.
It is only then that MDEC will be able show if the desired impact has been achieved. Impact should also not be defined by using vanity metrics or large but meaningless statistics.
For example, a recent article in another publication about the eUsahawan programme, which ran from January to June 2020, said: “A digital entrepreneurship programme to onboard micro-enterprises onto various e-commerce platforms, it saw 41,789 entrepreneurs trained with a total sales value of RM65.4 million generated.”
At first glance, the total sales value of RM65.4 million seems large but simple math would show that each entrepreneur only made an average of RM1,565 during this period. Instead, the more meaningful metric would have been revenue growth from an earlier period.
Being able to define what winning looks like is Mahadhir’s great opportunity. To do this requires much introspection and a laser focus. If done right, it would indeed be meaningful for MDEC and the nation.
Be more transparent
MDEC also needs to be more transparent on its programmes and disclose the beneficiaries as well as the KPIs before and on completion of the programmes to show whether they were achieved. Currently, we have a limited idea of what MDEC does and what it has achieved apart from some press releases with little information on what the programmes and initiatives have accomplished.
The people need to know their current active programmes, their KPIs and who is accountable for them. There are also programmes that do not appear on MDEC’s website, where MDEC selects beneficiaries in ways that are not clear.
MDEC has existed for more than 20 years and yet there is no resource to review a list of all the companies that have received benefits from the government, with the exception of a table showing MSC-status recipients.
The same goes for grant recipients, where both the application and process for awarding the grants seem very much like a black box. Such a lack of transparency builds mistrust and this is not good for MDEC.
Mahadhir’s opportunity in his first 100 days is to release the Impact Report for the 2019/20 period and commit to releasing these reports every year moving forward. We also suggest half-yearly impact assessments to be done by an independent party, or by MDEC’s auditors, so there is a proper assessment of the desired impact by MDEC.
By releasing this annual report, MDEC will be able to forge an equitable partnership with the industry to build on what is successful and fix what is not working.
Do not try to do everything
At last count, there were more than 100 programmes being run by MDEC. No small feat even for an agency with nearly 500 employees. However, Mahadhir has an opportunity to take stock of each of these initiatives and determine what to do next.
The reality is that the efficacy of each programme is hampered by the sheer number of programmes that need to be administered. To put it crudely — it is like running 100 five-man start-ups.
Surely the quality of delivery is compromised if resources are spread so thinly. These existing programmes also need to be reviewed and difficult decisions need to be made about which programmes to expand, which to terminate and which to transfer to other agencies or ministries or even the private sector.
As an example of a successful transition, MDEC played a role in incubating and developing the Malaysian Cybersale in 2013. Pikom took over this programme in 2019 and continues to run it until today.
Mahadhir’s 100-day opportunity is to make the tough decisions in reviewing all these existing programmes. By removing non-performing programmes or transferring programmes to other parties, MDEC can then dedicate resources in areas where it can maximise its impact or focus on new initiatives that may be critical for the growth of the digital economy.
Engage the ecosystem
A lot has happened since 1996 and the Malaysian technology ecosystem is growing vibrantly — in part because of the work MDEC has done in past years. As a result, the industry is now far more mature than before. We have local champions and success stories. We have ecosystem players in the private sector. And, most importantly, it would seem that the public sees the value of the digital economy.
MDEC needs to engage with the ecosystem on a more regular basis and create programmes and initiatives and solve problems as required by the ecosystem. Policies, programmes and initiatives should not be created in a void. Instead, MDEC should listen to what the ecosystem wants and needs and meet those needs.
Mahadhir’s 100-day opportunity is to actively lead in working with the ecosystem. These engagements must be conducted in an open forum and the discussions made public so that everyone knows what is needed in the ecosystem.
Set a clear action plan for the future
When setting long-term targets like 5- or 10-year plans, MDEC should clearly indicate the annual targets, how they will be achieved and how they will lead to the achievement of the longer-term goals.
Currently, we see all these lofty long-term plans but we have no idea how the ecosystem and beneficiaries can actively work towards achieving these plans and what KPIs MDEC has accomplished yearly towards achieving its longer-term goals.
MDEC must also be realistic with its initiatives and goals. Do not have huge goals and targets like big Fourth Industrial Revolution (IR 4.0) goals when most SMEs are not even at the IR 1.5 stage. MDEC must show a clear understanding of where its beneficiaries stand and be realistic with its initiatives in getting beneficiaries such as SMEs up the IR steps rather than trumpeting big goals and numbers when everyone knows that these goals will never be achieved.
Mahadhir’s opportunity is to define this action plan. Start small and itemise what the first 100 days could look like. Then the first six months, followed by the first year. A clear road map for MDEC will help rally MDEC’s team. It will also help the industry follow what is happening and provide support where necessary.
Hit the ground running
In ScaleUp Malaysia, we always say that while ideas are easy to come by, execution is everything. Once Mahadhir has set his goals clearly with a focused action plan, it is time for the rubber to meet the road. Speed is key.
His 100-day opportunity is to demonstrate that he and his team of freshly hired leaders have what it takes to execute fast. From what we gather, much of Budget 2021 has yet to be fully deployed.
There cannot be a better time for Mahadhir to prove his mettle. As we recover from the Covid-19 economic downturn, he has a chance to prove that the digital economy is the way forward. He has a team, resources and an industry yearning for MDEC to lead Malaysia into the digital economy for the next 25 years and beyond.
By setting the right tone, Mahadhir will get the support of the entire ecosystem. He has already set the stage with his recent call for unity in building the ecosystem. That message needs to resonate and be turned into action.
No one wants MDEC to fail. If MDEC fails, we fail and that would be a tragedy. But for MDEC to succeed, Mahadhir has to lead from the front, openly, transparently, and jointly with the ecosystem. We cannot build a true digital-driven economy unless we all work together.
Mahadhir has that opportunity. We hope he grabs it with both hands.
Dr V Sivapalan is co-founder and senior partner at ScaleUp Malaysia Accelerator and Proficeo Consultants. Aaron Sarma is co-founder and general partner at ScaleUp Malaysia Accelerator and a co-founder of a start-up studio, Remote Ventures.Internet Explorer Channel Network