1. ICT Services Industry Outlook in Malaysia Stan Singh

2. Next Economic Major Thrust: Endogenous Growth through New Transformation Policy Macro Policy Shift: FDI Driven to Innovation Driven Economy New Transformation Policy FDI Driven Growth Periods

3. Towards High Income Services Sector Nation By 2020 GNI per capita Until Mid 90’s Until Late 70’s Info-structure (ICT), science, R&D, knowledge capital, innovation skills, XY Generations, entrepreneurship and globalization Infrastructure, Capital, Factory, Technical Skills and Semi-skilled Workforce HIGH INCOME – INNOVATION DRIVEN ECONOMY Land, labour and low skills MIDDLE INCOME – FACTOR DRIVEN ECONOMY LOW INCOME – RESOURCE DRIVEN ECONOMY Source: DOSM /10th Plan /PIKOM

4. Process and Human Capital Strategy TRANSCENDING INTO HIGH VALUE AND INCOME PEOPLE CAPABILITY MATURITY MODEL FRAMEWORK CAPABILITY MATURITY MODEL INTEGRATION FRAMEWORK VOICE OF CUSTOMER (VOC) VOICE OF EMPLOYEE (VOE) VOICE OF BUSINESS (VOB) • Performance • Quality • Cost • Cycle time • Reliability • Revenue • Growth • Profitability • Leadership • Governance • Integrity • Transparent • Responsive • Accountability • Responsibility PROCESS STRATEGY HUMAN CAPITAL STRATEGY

5. Human Capital Strategy: From Industrial Towards Knowledge Workers 2011 IDE / KBE Innovative Digital Economy (IDE) KNOWLEDGE/ INNOVATION BASE ECONOMY(IDE /KBE) 1994 MSC Multimedia Super Corridor (MSC) 1970 E&E KNOWLEDGE / INNOVATIVE WORK FORCE Electrical & Electronic (E&E) Free Trade Zone (FTZ) INDUSTRIAL ECONOMY INDUSTRIAL WORK FORCE RESOURCE BASED ECONOMY AGRICULTURAL WORK FORCE ICT ERA INFLEXION PHASE

6. Economic Outlook Strong Economic Fundamentals Strong domestic demand; Increased export earnings; Stable overnight lending rates; Stable public and private consumption ; Low inflation rates; Low unemployment rates; Stimulating ICT / ICTS growths; 60% inclined to Asian export earnings Post GE election stability Economic challenges Risk aversion by potential investors; Slack in ETP ; Reducing fiscal deficit; Fluctuating commodity based earnings; Capital flight arising from erratic foreign exchange fluctuations; Poor quality workforce; Over dependent upon unskilled foreign workers; Political stability after GE13 GDP 2012 : 5.2%; GDP 2013 : 5.5%, despite 4.1% in Q12013

7. Structural Shift towards ICT Services Year : 2010 Year : 2000

8. ICT Outlook Potential Growth Areas Big data analytics – culling out business insights and intelligence Cloud computing – even applicable to SME with reduced cost and maintenance; Mobile devices – stimulates anytime and anywhere for consumerization of IT Social media - advent of social business; ICT Challenges Declining supply of graduates, not improved; Quality of graduates meeting industry demands still remain a challenge; Quality and competency standards – less than 1.5% CMMI & PCMM certified; Still lack strong R&D, patenting and commercialization culture, despite Government incentives and facilities Mega projects, corridor developments and transformation programmes attribute ICT Services growth

9. Share and Structure of ICT Services Outlook

10. ICT Services Trade: Exports and Imports growing exponentially

11. Transformation projects contribute significantly towards ICT Serivices ICT Sector Projected to grow at 11% in 2013 VISION2020 One Malaysia Government Transformation Programme (GTP) Economic Transformation Programme (ETP) Digital Transformation Programme (DTP) Sabah Development Corridor (SDC) Rural Transformation Programme (RTP) Political Transformation Pogramme (PTP) Northern Corridor Economic Region (NCER) Iskandar Malaysia East Coast Economic Region (ECER) Sarawak Renewable Energy (SCORE) Mega projects : Kajang – Sg. Buluh Mass Rapid Transit (MRT)

12. Average monthly salary of ICT Professionals Salary increase in 2012: 8.7% from RM6240 to RM6784; Projected growth in 2013: 8.9% to RM7,387

13. Salary differential by job functions Those in IT Managerial category tend to earn much more than in engineering / technical lines; Senior IT Engineer net 46% higher salary than Junior IT

14. Hot ICT Jobs Hot ICT jobs still remain very much similar to recent years; however, predicted fast growing demand for big data analytics requiring inter-disciplinary skills on IT, numeracy, statistical and business intelligence skills; Quality and process improvement skills also poised to fetch higher demand in the near future; Applications like SAP, ERP may lose market share with similar, simplified and cheaper versions appearing in countries like China

15. Regional benchmarking In comparison to Malaysia, USA pays 2.08 times ; Singapore pays 1.84 times higher compared to 2.26 time; Hong Kong Australia 1.90 times; Thailand, China and Vietnam paying better remuneration; By 2018 the salary gap is likely to leveled up among booming Asian economies – Singapore, HK, China and Vietnam

16. Job sentiment index Job sentiment index still remains high, indeed got better when JECI moved up from 48.8 in 2012 to 49.1 in Q12013

17. Thank You