The Malaysian Insight

THE ICT industry, which aims to be a major driver of the economy, is expected to see slower growth this year before rebounding in mid-2020 when the benefits from the government’s new and revived projects start kicking in.

Pikom, a trade group representing the country’s IT industry, said growth in both salaries and job openings declined last year as employers took a cautious wait-and-see attitude because of the change in government in the 14th general election in May.

In 2017, the ICT industry made up about 18.3% of Malaysia’s economic output or gross domestic product (GDP) and contributed RM247.1 billion to the economy.

Pikom estimates that by 2022, the industry could make up 20% of GDP.

Pikom chairman Ganesh Kumar Bangah said the first year of Pakatan Harapan had been “slow” when it came to economic initiatives and this had affected all industries, including ICT.

The association’s head of research and publications, Woon Tai Hai, said the industry was also hit by the overall slowdown in the economy due to external factors, such as the decline in commodity prices and ongoing United States-China trade war.

The slowdown in the ICT industry’s expansion is reflected in average salary growth rates of its workers. In 2017, the overall average monthly salary of ICT workers grew by 5% before going down to 4% the next year.

In 2019, the average salary growth level is expected to go down to 3.8%, the lowest since 2010.

“Because our economy is largely government-driven and the private sector follows the government, the ICT industry is an enabler to the government and private sector,” Ganesh told a media briefing on the 2019 job outlook for the ICT industry.

“So in the government’s first year, growth was rather slow when it came to new projects and new initiatives,” Ganesh said.

But this has changed in the last few months before the PH’s first year anniversary where the administration announced a slew of initiatives and the revival of stalled mega-projects.

These include the RM44 billion East Coast Railway Line (ECRL) and the Bandar Malaysia township in Kuala Lumpur, which were renegotiated with lower costs.

“These initiatives will restart the economic engine and lead to more jobs and hiring and we are hopeful that government spending will restart and refuel the whole economy.

“We are confident that the IT industry will grow with the economy, so by mid-2020, we will start seeing the results of these initiatives since it takes about a year for the benefits to flow to the economy,” said Ganesh.

The ICT industry will get a big boost in the coming years due to the government’s focus on developing “Industry 4.0” initiatives in robotics, artificial intelligence and big data analytics. – May 28, 2019.