Malaysia Internet economy has room to grow
Malaysia - The internet is set to give the Malaysian economy a boost with it contributing more to Malaysia’s GDP than it does to the US’ or China’s.
According to a joint research by Google and McKinsey entitled Online and Upcoming: The Internet's Impact on Aspiring Countries, the internet was estimated to have contributed 4.1%, amounting to US$9.75 billion (RM30 billion) of US$238 billion of Malaysia's 2010 GDP.
This has placed Malaysia among the highest of the 30 fast-growing countries crucial to the Internet's future, the report highlighted.
McKinsey believes that while Malaysia has derived a lot of money from exporting equipment that allows people to use and connect to the internet, the next three years will see a significant growth in the value that domestic activity on the internet delivers to the nation's economy.
McKinsey principal Nimal Manuel said: "If policies are put in place to support financial and human capital development, including raising venture capital and R&D spending and lowering the cost of starting a business, the future of Malaysia's Internet ecosystem looks strong."
However, while our Internet contribution to GDP is at 4.1%, the contribution to GDP growth is only at 2%, and the common sentiment among most is that there are still not enough people online.
According to the Malaysian Communications and Multimedia Commission (MCMC) chairman, Mohd Sharil Tarmizi, initiatives like the National Broadband Initiative are in place to allow for universal internet access and mobile broadband technologies are also getting more people online.
Google Malaysia country manager Sajith Sivanandan (pictured) said getting people online is an aspect but Malaysian businesses are yet to invest more on internet advertising as well.
"Malaysian businesses spend only 1% of their advertising budget on online mediums, as opposed to the UK, for example, where 25% to 30% of their budgets go online", Sivanandan said.
"The internet economy holds the key to future growth for Malaysia. To continue on this trajectory, SMEs that do business online are crucial, along with the continued development of domestic Internet consumption," he added.
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- McKinsey and Company