Malaysia has developed an ambitious agenda to fully capture the benefits of digital technologies for individuals, businesses, and start-ups. Digital trade will be crucial, not only to increase and diversify Malaysia’s export base, but also for helping local businesses leverage digital technologies across every sector of the economy. The value that digital trade creates for the domestic economy today is estimated at RM 24 billion (US$5.6 billion), but can grow by more than 9 times to reach RM 222 billion (US$52 billion) by 2030. Some of the largest beneficiaries are expected to come from the traditional sectors, such as infrastructure and manufacturing.
Besides creating value from abroad through digital exports, digital trade also supports large productivity improvements in Malaysia’s domestic sectors. Yet, traditional economic measures fail to adequately measure the value of digital trade to exports and Malaysia’s economy.
A robust fact base is thus crucial to ensure that the value of digital trade is fully appreciated and taken into account when formulating trade and economic policy. This includes assessing (a) the current and future value of the digital trade opportunity for Malaysia’s exports and the domestic economy; (b) perceived concerns relating to digital trade abroad and how these could be addressed without unduly impeding digital trade flows; (c) priority areas Malaysia could focus on in order to fully harness the benefits while managing the potential risks of digital trade.
This research by AlphaBeta was commissioned by the Hinrich Foundation, supported by Google and done in collaboration with the Institute for Democracy and Economic Affairs (IDEAS) and the Malaysia Australia Business Council (MABC).
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