Professional Documents
Culture Documents
31 December 2005
“The future never just happened; It was created”
1
A note to the user of this document
This report contains 4 primary sections in 8 different chapters. The “Chapter Guide” as shown below is used
throughout the report to guide readers to understand the report better. The “Chapter Guide” has also been mapped
to the Terms of Reference (TOR) of the study
1 2 3 4 5 6 7 8 9 10 11 12
Terms of Reference
1. To study and analyze existing foundations and strategies in the ICT Sector in Melaka
2. Gauge and review the effectiveness of project/program implemented in the ICT Sector
3. To identify primary issues impeding the implementation of planned strategies/projects/programs and to
recommend actions to address issues identified
4. To recommend directions, foundations, strategies, projects and programs to plan and manage the Melaka ICT
Sector to be more competitive
5. To improve the ICT infrastructure and infostructure
6. To increase the production of ICT skills and experties
7. To reduce the digital divide between urban and rural populations
8. To increase the application and commercialization of ICT
9. To stimulate entrepreneurship activities in the field of ICT
10. To create a monitoring mechanism for ICT implementation in Melaka
11. To benchmark the Melaka ICT Sector against other develop state and nations
12. To study the impact of the global economic climate on the Melaka ICT Sector and recommend strategies or
actions necessary to increase competitiveness and sustainability
2
Table of Contents
ACKNOWLEDGEMENT …………………………………………………………………………. 4
1 INTRODUCTION ……………………………………………………………………………..32
3
Melaka ICT Strategic Blueprint
ACKNOWLEDGEMENT
Acknowledgement
During the course of the study, we have been privileged to have had the
opportunity to discuss, deliberate and debate with distinguish stakeholders and
key players pertaining to various challenges facing the State as well as to
identify means of unlocking relevant touch points pertinent to the State’s ICT
sector to realize its full potential.
In this regard, we hereby gratefully acknowledge the invaluable contributions
from the parties involved which have ensured the success of this study. We
would also like to record our special thanks to Encik Zainal Husin, the Director
of the State Economic Planning Unit (UPEN) for his guidance and wisdom in
championing this project.
Our deepest and sincere appreciation also goes to members of the Melaka
Cybercentre Secretariat at UPEN for their dedication and commitment to this
project. Special mention goes to Dr. Mohd Haflah Piei, Encik Abul Khair Yahya,
En Mohd. Hamin Talib, Dr. Noraini Baba and En. Ismail Lajen for their
enlightening ideas, thought process and references.
We would also like to thank the entire Melaka State Government IT Commitee
who have significantly contributed to the development of this report. Your
valuable contributions are a significant step towards realizing Melaka’s vision to
“Recapture past glory through rapid advancement in knowledge and ICT towards
a fully developed K-State”.
5
Melaka ICT Strategic Blueprint
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY:
Current State Analysis
High Readiness:
• Ready infrastructure – satisfactory Low Readiness:
internet/access points
• Most businesses not ICT enabled
• Initiated a reasonable number of
good programs & community • Mainly internal process driven
involvements • No real collaboration/sharing
COMMUNITY PRIVATE
• High internet penetration SECTOR SECTOR
Medium Readiness:
Comprises:
• Growing investment in ICT
• State Govt Admin Office
• Good back end systems / connectivity
• District & Land Offices
• District Local Councils • Projects not integrated (Pockets of initiatives)
7
EXECUTIVE SUMMARY:
Tourism and Manufacturing driving Melaka’s GDP
8
EXECUTIVE SUMMARY:
Melaka – desirable business environment
• Among the lowest SAIDI Index for electricity in Malaysia which shows strong
stability in power supply
• Melaka offers higher quality of life compared to the Malaysian average
9
EXECUTIVE SUMMARY:
Manufacturing sector growth not impressive of late
Net FDI Inflow
(USD Billions)
60.0
50.0
40.0
30.0
20.0
10.0
0.0
1990 1995 2000 2001 2002 2003
-10.0
China India Malaysia Singapore
Source: Database of UNCTD, 2005
• Growth of FDI Inflow to Malaysia fueled by the manufacturing shown signs of weakening
• Recent development has seen China as world largest FDI recipient (specifically in
manufacturing and E&E) due to its significant cost advantages
• Malaysia will find it difficult to attract new sizeable investments in manufacturing and
will need to move to higher value add activities to maintain growth
10
EXECUTIVE SUMMARY:
Tourism Sector yet to fully leverage on ICT potential
The Tourism Industry in Melaka is one of the largest contributor to the state GDP (28%
of GDP - RM3.4 bil) – Malaysia’s Tourism revenue stands at RM29.7 billion in 2004
4 mil tourists visits Melaka annually (i.e. 1 in 4 tourists to Malaysia) - 75% of tourists
are domestic travelers - Significant number of tourists are day-travelers which
resulted in Melaka inability to secure tourism revenues proportionate to the number
of tourist arrivals (potential: RM7.4 billion)
Malaysian suppliers generally slow to exploit potential of E-Commerce.
Static web presence widespread, but limited in content.
Little “E-Enablement” or integration into operational systems.
On-line products are generally point-to-point air tickets, hotel rooms only
booking etc.
In Canada, online booking represent one-third of all travel spending while 60% of
travelers uses internet for pre-travel research (Malaysia: 14.7%) - Currently, many
tourist information websites are available on Melaka but none of these websites
posses e-commerce transaction capabilities and are mostly non-interactive types.
(PhocusWright, 2002) Tourists from North America and Europe recorded high online
travel bookings (>60% of world online travel), an are where Melaka Tourism Sector
should exploit
Higher foreign travelers, higher average length of stay and higher tourist spending is
possible if the state’s Tourism Sector leverages on the power of ICT
11
EXECUTIVE SUMMARY:
Interpreting the Vision
Core Values
Core Purpose
Rich in heritage
• Economic growth - ICT to accelerate growth of Melaka Service oriented
(as a sector & enabler) Progressive & dynamic
• Bridging the digital divide - Make ICT education Progress with Quality of Life
accessible & affordable to all citizens of Melaka
• Wealth creation - Utilization of Knowledge and ICT to
increase the wealth of citizens of Melaka
ICT VISION
“Recapture past glory through
rapid advancement in knowledge
and ICT towards a fully developed
K-State”
Envisioned Future
• ICT as an important sector in Melaka economy
• ICT as the recognized enabler for Melaka economic
sectors
• A developed state with balanced spiritual and
physical development
• K-Society
12
EXECUTIVE SUMMARY:
Overview of the Strategic ICT Framework
Recapture past glory through rapid advancement in knowledge and ICT
towards a fully developed K-State
13
EXECUTIVE SUMMARY:
Strategic Direction I: Focusing on High Growth Sector
Program 2
Program 2
Attract
AttractSSO
SSOFirms
Firms
Program 1 Program
Program33
Program 1
Tourism
TourismPromotion Tourism
Promotion TourismContent
Content
Portal Development
Portal Development
Strategic Direction 1
Strategic Direction 1
Increase economic
Increase economic
wealth by focusing on
wealth by focusing on
high growth sectors
high growth sectors Program 4
Program Program 4
Program66 Re-position
Biotechnology Re-position
Biotechnology&& Health/Education
Bioinformatics Health/Education
Bioinformatics Tourism
Tourism
Program
Program55
Partnerships
Partnershipsfor
for
Organized Growth
Organized Growth
14
EXECUTIVE SUMMARY:
SD-1 Program: Tourism Promotion Portal
INITIATIVE
• To upgrade and unify current tourism related websites in Melaka under one
comprehensive tourism portal sponsored initially by the State Government –
portal may be handed over to the private sector once critical mass is achieved
• To provide opportunities for small and medium players in the Melaka Tourism
Sector to offer their offerings on the internet E
• To facilitate electronic purchase of tourism products in Melaka
RATIONALE
• At present, the current portal is static and non-interactive. Tourists should be able to do
everything on the internet from booking flight to booking hotel rooms to finding information
about in-city transportation to operating hours of tourist spots.
• Electronic purchase over the internet can be stimulated if it is fully backed by a trusted party the
such as the State Government
• A State Government backed portal will make it financially feasible for small to medium tourism
product supplier to market their product electronically
POTENTIAL BENEFITS
• Exposing the local tourism sector to more tourists specifically from developed nations with higher
spending power
• 40%-60% boost to tourism earnings in the State above the existing growth pattern – estimated
increase of RM1.3 billion to RM2.0 billion of GDP per annum
15
EXECUTIVE SUMMARY:
SD-1 Program: Attract SSO Firms
INITIATIVE
• To attract Shared Services Outsourcing Firms to choose Hang Tuah Jaya as the
preferred centre of operations
RATIONALE E
• Melaka’s position in between the Klang Valley and Singapore makes it an attractive location for
SSO Firms
• The creation of a Cybercentre in Melaka will enable Melaka create the ideal business environment
(high quality infrastructures and performance guarantees) which is conducive to SSO business
• Melaka posses the right balance of hard and soft infrastructures with reasonably high quality of
life to attract SSO businesses
• Currently, Singapore Telecom is using Melaka for its SSO due to its cost advantage and various
factors conducive to the SSO business
POTENTIAL BENEFITS
E
RATIONALE
• Melaka possess the right mix of IHLs to support a Tourism/Culture/Multimedia Content Industry
• Virtual tours, clips and scenes will be developed using existing archives and scriptures. Output
from the Content Industry will then serve to increase the quality of tourism products (e.g.
museums, zoos, tourist parks, etc) and attract nurture more interest and boost revenues from the
tourism sector.
• As content will be required to be continuously updated, a steady stream of income will be
generated to create a sustainable growth to the proposed Content Industry and attract more
technopreneurs to participate and locate their operations in Melaka
POTENTIAL BENEFITS
• Contributing towards making Melaka a more “event tourism” oriented from the existing “place
tourism” oriented. This will encourage more repeat visits by tourists and further boost income
and growth of the local tourism sector
• Creating Melaka’s own Content Industry generating up to RM500 million demand in the local
economy
• Encourage the creation of critical mass in the Content Sector which will ultimately grow beyond
serving the local tourism sector
17
EXECUTIVE SUMMARY:
SD-1 Program: Re-position Health/Education Tourism
INITIATIVE
• To collaborate with the Health and Education sectors and review/reposition
offerings on Health and Education Tourism around suitable niche within each
sector (e.g. Education Tourism to focus on tourism management, Hotel
catering, public relations, multimedia content development, etc. while Health
Tourism to focus on Cardilogy, Cancer, etc) E
• Including the re-packaged Health and Tourism sector products on the Central
Tourism Portal initiative highlighted under SD-1
RATIONALE
• Currently each health/education tourism sector is promoting itself in isolation without specific
focus. Both sector needs to be repositioned and strengthen in specific niche areas to create a
clearer market positioning to their clients and attract more high value clients
• Melaka needs to ensure that the market it carves for itself in both sectors are sustainable. A
clear market strategy which involves specific niche and focus areas will make Melaka more
attractive to potential clients while at the same time ensures that investments made in marketing
reap maximum returns. Carving the right niche and focus areas may also reduce effect of
competing and similar sectors in neighboring nations
POTENTIAL BENEFITS
• Advertising and promotion cost would be reduced as it is shared between the health/education
and the tourism sectors
• Stronger brand as Melaka places herself in a niche specialized market
18
EXECUTIVE SUMMARY:
SD-1 Program: Partnerships for Organized Growth
INITIATIVE
• To create partnerships with commercial and IHL organizations to ensure that
other sectors of the economy grows in tandem with the demand created by
key focus sectors.
RATIONALE E
• Requirement of knowledge workers and technology companies such as higher quality housing,
entertainment, office space and etc can be developed to further improve the commercial
attractiveness of the state for business relocations and as centre of operations
• Demand generated resulting from the expansion of focus sectors (tourism, ICT and biotechnology
sectors) can be anticipated and met to encourage a higher yet more balanced growth in the local
economy
POTENTIAL BENEFITS
19
EXECUTIVE SUMMARY:
SD-1 Program: Biotechnology & Bioinformatics
INITIATIVE
• Focus on biotechnology and encourage the use ICT to maximize potential. Set
up database centre for biotech & bioinformatics
• personalized medicine & healthcare
• traditional herbal medicinal plants
• cataloging DNA marker technology for herbal & traditional medicine E
• database screening for anti cancer
RATIONALE
• Growth of biotechnology sector estimated to average from 12% to 17% annually will further boost
the State’s GDP
• Biotechnology and bioinformatics sector is expected to be the leading growth sector in the world
economy by 2030 and will continue to lead for a century to come
POTENTIAL BENEFITS
• Improved processes of biotech product, with spillover effect of improving cottage industries, e.g.:
higher quality and longer lasting cencaluk, dodol and gula melaka enabling bigger commercial
possibilities and higher profits
• Participate in the high growing Malaysian herbal sector (estimated at RM2 billion annually) which
is expected to grow to as large as RM13 billion by 2020
20
EXECUTIVE SUMMARY:
Strategic Direction II: Developing K-Society and the
Necessary Skill Base
Program
Program11
Development
DevelopmentofofCritical
Critical
Mass
Mass
Strategic Direction 2
Strategic Direction 2
Develop Knowledge-
Develop Knowledge-
Based Society & Develop
Based Society & Develop
Responsive Skill Base
Responsive Skill Base
Program
Program44 Program
Program22
Aligning
AligningIHLs E-Melaka
IHLs E-Melaka
21
EXECUTIVE SUMMARY:
SD-2 Program: Development of Critical Mass
INITIATIVE
• To develop critical mass of broadband users to encourage industry players to
rollout infrastructure at the last mile. For the State Government, this shall
involve connecting schools, IHLs, hospitals, government buildings, community
centers, shopping malls, mosque, libraries and etc
E
RATIONALE
• According to the National Broadband Plan, Malaysia has abundant availability of domestic
backbone capacity as compared to last mile broadband infrastructure – a critical mass (5%
connectivity) will encourage industry players to rollout infrastructure at the last mile
• Broadband is critical in the development of k-society, k-economy and the quest to be a developed
k-state:
• Pre-requisite for high-speed info-communications access
• New benchmark on national infrastructure and country competitiveness
• Support expansion of Multimedia Super Corridor (MSC) nationwide
• Facilitate the rollout of e-government and other flagship applications
• Potential for bridging the digital divide hence the knowledge divide
POTENTIAL BENEFITS
• Intervention by the State Government (i.e. connecting Government agencies, schools, hospitals,
etc) in developing critical mass will assist telecommunications industry to rollout broadband
widely within the State and help in the efforts to develop a k-society in Melaka
22
EXECUTIVE SUMMARY:
SD-2 Program: e-Melaka
INITIATIVE
• To persist and continue with e-Melaka program to connect communities and
increase ICT awareness specifically among rural populations and other
segment of the population which are not exposed to ICT development
RATIONALE
• In its effort to develop a k-society, community and awareness program such as e-Melaka is
important to ensure that
• ICT awareness campaigns are implemented for population segments that are still not exposed
to ICT development
• Promote the State Government’s efforts to leverage on ICT to be more transparent and more
customer friendly. This will ensure that more support can be gathered from the public - a
critical ingredient of success
POTENTIAL BENEFITS
• Increase visibility of the State Government efforts to the public and will help the Government to
gather support from the public to bridge the digital divide
• Act as a promotional campaign to inform the public of new developed e-Government applications
and improve the ability of the Government to deliver its services more efficiently and effectively
23
EXECUTIVE SUMMARY:
SD-2 Program: Aligning IHLs
INITIATIVE
• To align IHLs in Melaka to offer more courses relevant to focus economic sectors
(i.e. tourism, ICT and biotechnology sectors)
• To encourage IHLs to get relevant accreditation from Lembaga Akreditasi Negara
(LAN) and be more attractive to both local and overseas students
RATIONALE
• As courses are recognized by LAN, IHLs will be more attractive to students, local and foreign.
• Currently, there are not many IHLs offering courses in the services industry and Melaka is able to
fill the niche
POTENTIAL BENEFITS
• Development of k-workers which are suitable and relevant to key economic sectors
• Creating an academic centre of excellence in the tourism and ICT sectors
• Foreign students will help generate income through long stay
24
EXECUTIVE SUMMARY:
Strategic Direction III: Creating a “Client-Friendly”
Government
Program
Program11
Connecting
ConnectingPBTs/Depts
PBTs/Depts
Program
Program33
Change
ChangeManagement
Management
25
EXECUTIVE SUMMARY:
SD-3 Program: Connecting PBTs/Depts
INITIATIVE
• To connect PBTs and government departments to each other creating a web of
information
• Offering of services online
RATIONALE E
POTENTIAL BENEFITS
26
EXECUTIVE SUMMARY:
SD-3 Program: Implement EG
INITIATIVE
• To fully implement electronic government at the State Government - the e-
Government programme aims at reinventing how the State Government works
and improve the quality of interactions with citizens and businesses through
improved connectivity, better access to information and services and better
processes and systems.
RATIONALE
• To integrate all State Government and federal EG initiatives and develop e-clusters i.e. tourism ,
education, health, ICT and biotechnology
• To enhance electronic delivery channel and mobile capability for Government portal
• Multi-channel delivery of services (Internet, WAP, Public access points and Call centres)
• To enhance efficiency of State Government’s overall service delivery
POTENTIAL BENEFITS
27
EXECUTIVE SUMMARY:
SD-3 Program: Change Management
INITIATIVE
• To implement change management programs throughout the entire State
Government parallel to the implementation of e-Government and the rollout
of online services from PBTs and other agencies
RATIONALE E
• Many are not ready to implement EG without training – Change Management programs will ensure
that the advancement and improvement in technology and processes are supported by the
appropriate quality and quantity of training programs and awareness campaigns to win the total
support and commitment from Government staff
• Past experience and lessons learned from the implementation of e-Government at Federal
Government has shown that appropriate investment in Change Management is critical to ensure
both people and technology can function in harmony to meet pre-implementation goals
POTENTIAL BENEFITS
• Ensure that the transition from traditional processes to technology driven processes can be
implemented smoothly with minimal user resistance
• Ensure that all affected Government staff are well educated of the benefits of new processes and
e-Government as a whole which is important as any negative feedback/perception from
Government staff can negatively affect Government services to the public. Degradation of
services resulting from lack of investment in Change Management may eliminate many potential
benefits that should be reaped with e-Government implementation
28
EXECUTIVE SUMMARY:
SD-3 Program: Customer Relationship Management
INITIATIVE
• To implement a CRM solution for the entire state government to create a
client friendly environment for businesses and citizens
RATIONALE E
• CRM solutions will ensure that all issues and problems arising from Government services rendered
to business and the public are handled swiftly
• Implementation of such solutions will reduce bureaucracy and highlight weaknesses in
Government processes facilitating continuous improvement and promoting a performance driven
culture
POTENTIAL BENEFITS
• Melaka to be attractive for business due to the transparent and client-friendly environment
• Create Government that is more knowledge and information driven as opposed to the traditional
Government that is slower and process driven
29
EXECUTIVE SUMMARY:
Implementation Timeline
2006 2007 2008 2009 2010
Project Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
30
EXECUTIVE SUMMARY:
Conclusion
30% 10%
Enhance Economic Developing
Competitiveness K-Society
RM10 mil
RM43 mil Biotechnology RM108 million for 13 projects within 5 years
Broadband towards K-State development
Critical Mass
Content
Development E-Melaka Critical Success Factors:
“Result oriented” - Focus on ICT
3 5
SSO Sector 10
5 Connecting PBTs implementation and buy-in rather than
Development
5 hardware and infrastructure
“People centric” - K-Society (K-Workers)
15
development utmost importance to fuel
Tourism 15 economic growth in service centric
Promotion environment
Portal
“Synergy & Sharing” - Integrated &
Collaborative implementation vital across
10 public sector, private sector and
30 communities
10 “Control over things...then things under
CRM Solution
control” – Professional management of
E-Government, projects (K-State program) needs capable
Change
Management delivery focused team, hands-on, on-
ground
RM65mil “Proactive not reactive” – Projects need
to have longer term view, regional and
Government Service Delivery global focus and responsive to market
changes ad dynamism
Excellence
60%
31
Melaka ICT Strategic Blueprint
1.0. INTRODUCTION
1. Introduction
• Founded in the year 1396, Melaka represents one of the oldest recorded civilization in Peninsular
Malaysia. Located strategically at the heart of South East Asia, Melaka was known in the 15th century
as the centre of trade and knowledge of the region. Its historical influences have bequeathed Melaka
with a delightful mixture of people and cultures, all of whom contribute to the unique characteristics
of the state.
• Colonization by several foreign powers starting from the early part of 16th century has seen Melaka
gradually declining in importance to the region. This coupled with limited natural resources has
slowed the economic growth of the state prior to the Malaysian independence.
• Realizing its strengths and weaknesses, the state has managed to transform its economy focusing on
development of two main sector i.e. manufacturing and tourism. The state started inviting over
foreign investors in the early 70s and since then has met with commendable success. By end of 1997,
the state had registered a total investment of over RM16 bil., creating over 80,000 job opportunities.
• Today 30% of Melaka’s GDP is derived directly from its industry which is equally matched by its
booming tourism sector. To ensure that Melaka’s growth remains strong and sustainable, Melaka
needs to take the next step forward in it development, transforming its core economic sectors into
high value and knowledge driven sectors.
• As the country moves towards becoming a developed nation, knowledge was identified as the key
impetus and the birth of the Multimedia Super Corridor in mid 1990s is a testimony of the drive in
realizing the country’s Vision 2020.
• In line with global developments and opportunities, it is now timely for Melaka to leverage on the
advancement in ICT to further accelerate development across the state in line with its vision of
becoming a developed state. ICT has a strong affinity with knowledge and Melaka can successfully
launch high impact ICT initiatives that will propel the state to become a fully developed knowledge-
based state by 2010.
• This ICT Strategic Bluueprint contains the summary of recommendations and is a key segment of the
state’s ICT Masterplan designed to expedite Melaka’s drive to be a “ Developed K-State by 2010”.
33
1.1. What is a K-State?
34
1.2. Criteria of a K-State
Example of Criteria from The Heritage Foundation Knowledge Wheel (level of preparedness to embrace knowledge based
economy):
Share of worldwide computers in use
Business expenditure on R&D No. of computers per 1'000 people
Patents granted to residents Share of total worldwide MIPS
35
1.3. What are the main thrusts of K-Economy and how is it
different from old industrial economy? (1)
MARKETS
Issue Old Industrial Economy New Knowledge Economy
Key Economy Drivers Large industrial firms Innovative entrepreneurial
knowledge-based firms
Economy Supplier Driven Customer Driven
Economic Development Steady & linear, predictable Volatile – fast change, with
explosive upsurges and sudden
downturns & chaotic – the
direction of the economy’s
changes not perfectly clear
Market Changes Slow & linear Fast & unpredictable
Lifecycle of Products / Long Short
Technologies
Scope of Competition Local Global hypercompetition
Competition Size: Big eats Small Speed: Fast eats Slow
Marketing Mass Marketing Differentiation
36
1.3. What are the main thrusts of K-Economy and how is it
different from old industrial economy? (2)
ENTERPRISE
Issue Old Industrial Economy New Knowledge Economy
Pace of Business Slow Faster with ever rising customer
expectations
Emphasis On Stability Change Management
Business Development Approach Strategy pyramid: Vision, Opportunity driven, dynamic
Mission, Goals, Action Plans strategy
Success Measure Profit Market capitalization
Organization of Production Mass production Flexible & lean production
Key Drivers to Growth Capital Resources: People, Knowledge,
Capabilities
Key Sources of Innovation Research Research, system innovation,
knowledge mgmt, integration,
new business creation, venture
strategies, new business models
Key Technology Drivers Automation & mechanization ICT, e-business, computerized
design & manufacturing
37
1.3. What are the main thrusts of K-Economy and how is it
different from old industrial economy? (3)
ENTERPRISE
Issue Old Industrial Economy New Knowledge Economy
Pace of Business Slow Faster with ever rising customer
expectations
Emphasis On Stability Change Management
Business Development Approach Strategy pyramid: Vision, Opportunity driven, dynamic
Mission, Goals, Action Plans strategy
Innovation Processes Periodic, linear Continuous, systemic
Production Focus Internal processes Entire value chain
Strategic Alliances with Other Rare, “go alone” mindset Teaming up to add
Firms complementary resources
Organizational Structures Hierarchical, bureaucratic, Interconnected subsystems,
functional, pyramid flexible, devolved, employee
empowerment, flat or
networked structure
Business Model Traditional, command & control New, refocused on people,
knowledge & coherence
Source : MSCTC Analysis, 2004
38
1.3. What are the main thrusts of K-Economy and how is it
different from old industrial economy? (4)
WORKFORCE
Issue Old Industrial Economy New Knowledge Economy
Leadership Vertical Shared: employee
empowerment & self leadership
Work force characteristics Mainly male, high proportion of No gender bias; high proportion
semi-skilled or unskilled of graduates
Skills Mono-skilled, standardized Multi-skilled, flexible
Education requirements A skill or a degree Continuous learning
Management employee relations Confrontation Cooperation, teamwork
Employment Stable Affected by market opportunity
/ risk factors
Employee seen as Expense Investment
39
1.4. The K-Economy Transformation
Growing
Melaka cannot afford to neglect the challenges dependence on OPENNESS to the
Institutionalization
of K-Economy transformation. Throughout SHARING knowledge
of CONTINUOUS
golabl economy
history, major new technologies have led to & information BTW through TRADE,
INNOVATION,
INDIVIDUALS, INVESTMENT &
predictable but far reaching cycles of change. COMMUNITIES &
PRODUCTIVITY
EXCHANGES of
IMPROVEMENT &
ORGANISATIONS to INFORMATION,
EDUCATION/SKILLS
The ICT cycles has begun, but the change we coordinate economic
FORMATION
KNOWLEDGE &
have seen is merely the beginning. Successful & social SKILLS
relationships
adjustments to the technology will create a
platform for long-term competitiveness,
renewal of regional communities and stronger FEATURES OF SUCCESSFUL K-ECONOMIES
social cohesion
43
1.6. What will Melaka as a K-State entail?
Provides its entire citizen with the opportunities to improve their skills and secure and high value jobs though
properly funded lifelong learning and vocational education programs;
Makes every school a centre of excellence and provides all children with quality education;
Has universities that attract world’s leading researchers and teachers, and
Encourage fundamental research and the study of State’s advantages (e.g Biodiversities) as well as applied
knowledge (that takes the research to market) in key niche areas.
Creates and promotes effective
linkages between research and
organizations (adequate state Transformed culture that
database, inventory of skills, emphasizes knowledge, excellence
Education and innovation and aims for it to be
resources and environment or
Government in its international reputation e.g.
generally referred to as the
“cadastre”) and enable effective
System countries like Finland and Ireland or
coordination to take advantage of states like Victoria and Bangalore
the available opportunities and whereby “image” is being
mitigate foreseeable threats; transformed by creating an
Economic inventory of internationally
Works imaginatively and Community recognized goods and services;
creatively as catalyst, System
encourager, information Uses knowledge resources to
provider, infrastructure supplier, promote public goods, encourage
major customer and example of access and equality, provide
“best practice”; and resources and opportunities for the
Based on innovation and creation or rural and overcome social, class,
Promotes a strategy of ensuring commercialization of ideas and that reverses ethnic and gender barriers;
investment in “key niche areas” serious imbalances in trade through high value
where it can establish a added good and services Creates a more challenging and
leadership or global position. creative environment that help
Supports the provision of leading edge reverse the “brain drain” and assist
telecommunications, transport and primary in importing the needed skills
infrastructures throughout the state and
application of knowledge to simultaneously to Strengthen great heritages such as
promote energy efficiency, higher living standards customs, museums, arts, historical
and creation of jobs. sites.
44
Melaka ICT Strategic Blueprint
High Readiness:
• Ready infrastructure – satisfactory Low Readiness:
internet/access points
• Most businesses not ICT enabled
• Initiated a reasonable number of
good programs & community • Mainly internal process driven
involvements • No real collaboration/sharing
COMMUNITY PRIVATE
• High internet penetration SECTOR SECTOR
Medium Readiness:
Comprises:
• Growing investment in ICT
• State Govt Admin Office
• Good back end systems / connectivity
• District & Land Offices
• District Local Councils • Projects not integrated (Pockets of initiatives)
46
2.1. Melaka’s economy progressing strongly
38000
40000
30805
25000
5000
0
2000 2005 2010 2015 2020
Year
Melaka Malaysia Population – 0.7 mil
Size – 1,650 km2
Source: 8MP, OPP3 & MSCTC Analysis GDP – RM12.2 bil (2004)
Note: Real Income Per Capita (Current Year) GDP growth – 7.4% (2003-2004)
Per Capita – RM17,556 (2004) 47
2.2. Tourism and Manufacturing driving Melaka’s GDP
48
2.3. Public Sector embracing ICT
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Initiating Phase Visioning Phase Implementing Phase
• Target
• K-Economy • E-Melaka • Basic Data Melaka State Vision Developed
division & initiatives 2004 published State status
incubator set launched Developed State
• 14,552 2010 • RM26,000 GDP
up
• Comprise of 12 housewives & per capitab
• 9a sector “e” initiatives: pensioners
Main Projects Strategy Indicator
tourism • e-Govt trained
development • e-Community
strategy • e-Education Balanced
23 Indicators
identified Development
• e-Tourism
• Melaka
• e-Commerce
Broadband Plan
• e-Politic Biotechnology
unveiled
• e-Youth
• e-Health • Melaka ICT Economy /
ICT Urban / Rural Between Races
Humanity
• e-Mosque Blueprint study
• e-Security commissioned
Manufacturing
• e-Media
• Melaka MSC Physical / Fardu Ain / Fardu
• e-Women Spiritual Kifayah
Cybercentre Tourism
submission
Agriculture
Human Capital
a Currently, Development
12 tourism sectors identified
b 1990 prices – Source: Melaka Basic Data 2004
49
2.4. Public Sector, Educational Institutions and Private
Sector are gearing up to embrace Knowledge and ICT
aggressively
95% of public servants in Melaka are equipped with PC & e-
mail access
All 3 Pihak Berkuasa Tempatan - MBMB, MDJ and MPAG have
web presence to educate the public on its roles and plans
Melaka State Investment Centre (MSIC) was created to play
the role as integrated investment promoter in ICT related
fields
IHLs in the State offers second highest ICT related courses
per student population in Malaysia and produces highest
population ratio with tertiary education after Klang Valley &
Penang
Multimedia University (MMU) actively promoting ICT
education in the State
Syarikat Pemasaran Melaka was created to buy, package and
market quality products
K-Economy Incubator set up to facilitate the development of
Melaka as a centre for service industries, R&D&D
174 mosques connected through the e-Mosque network
45 cybercafes (31 in Central Melaka)
50
2.5. Public, Private and Community participation is
prevalent across the state
One Village One Product
Duyong
Serkam
Rembia Kuih Cakar
(Prawn/Seafood)
(Handicraft) Ayam)
Ayer Panas
Alai (Kelapa Mawar)
Paya Rumput (Inang Inang) Bukit Sedanan
(Melaka Delite) (Taufu)
Kuala Linggi
(Gula Melaka)
Ramuan China
(Quail)
Bukit Asahan
(Pamelo)
Durian Tunggal
Mashid Tanah (Dodol)
(Spices) Ayer Keroh
(Crystal)
MSIA
WP LABUAN
WP KL
T'GGANU
S'GOR
S'WAK
SABAH
P. PINANG
PERLIS
PERAK
PAHANG
NEGERI 9
MELAKA
K'TAN
KEDAH
JOHOR
0 10 20 0 5
30 10 15
40 20 25 0
50 10 20 30 40 50 60 70 80
Sources: MCMC, 2004; DoS 2002
52
2.7. State Government eager to adopt and embrace ICT
JOHOR
K'TAN
NEGERI 9
PERAK
P. PINANG
S'WAK
T'GGANU
KEDAH
MELAKA
PAHANG
PERLIS
SABAH
S'GOR
WP KL
INDICATOR
YEAR (SOURCE)
Identification of location(s)
within the state for
Y Y Y Y Y Y Y N Y Y Y Y Y Y
nucleus ICT development
- MSC Macro Study, 2005
% of government staff with
PCs 58 70 20 95 * * 49 25 90 23 100 * 35 *
- MSC Macro Study, 2005
* Data not available
• The State Government of Melaka with its dynamic and visionary leadership has
increased utilization of technology in its daily work process to increase productivity
and effectiveness of Government machineries
53
2.8. State Government driving towards 2010
Melaka has outlined major projects for the Ninth Malaysia Plan (2006 – 2010).
• More than one-fifth of its RMK9 budget for mega-projects will be focusing on building its bullish tourism
sector
• 35% of its RMK9 budget for mega-projects will be directly focusing on building its education sector
• More than RM100 million has been identified to fuel the growth of Melaka’s Biotechnology sector
• Approximately RM500 million has been identified for ICT development
54
2.9. Melaka – desirable business environment
• Among the lowest SAIDI Index for electricity in Malaysia which shows strong
stability in power supply
• Melaka offers higher quality of life compared to the Malaysian average
55
Melaka ICT Strategic Blueprint
State GDP
(RM Billions) 5
0
Agriculture Manufacturing Services Others Economic
Sector
2002 2003 2004
Source: Data Asas (UPEN), 2004
• Growth of the manufacturing sector in the State has flatten over recent
years
• Most of the existing large investments in manufacturing are based on foreign
intellectual property which translates to lower value add to the local
economy
57
3.1. Manufacturing sector growth not impressive of late (2)
Net FDI Inflow
(USD Billions)
60.0
50.0
40.0
30.0
20.0
10.0
0.0
1990 1995 2000 2001 2002 2003
-10.0
China India Malaysia Singapore
Source: Database of UNCTD, 2005
• Growth of FDI Inflow to Malaysia fueled by the manufacturing shown signs of weakening
• Recent development has seen China as world largest FDI recipient (specifically in
manufacturing and E&E) due to its significant cost advantages
• Malaysia will find it difficult to attract new sizeable investments in manufacturing and
will need to move to higher value add activities to maintain growth
58
3.2. Tourism Sector yet to fully leverage on ICT potential
The Tourism Industry in Melaka is one of the largest contributor to the state GDP (28%
of GDP - RM3.4 bil) – Malaysia’s Tourism revenue stands at RM29.7 billion in 2004
4 mil tourists visits Melaka annually (i.e. 1 in 4 tourists to Malaysia) - 75% of tourists
are domestic travelers - Significant number of tourists are day-travelers which
resulted in Melaka inability to secure tourism revenues proportionate to the number
of tourist arrivals (potential: RM7.4 billion)
Malaysian suppliers generally slow to exploit potential of E-Commerce.
Static web presence widespread, but limited in content.
Little “E-Enablement” or integration into operational systems.
On-line products are generally point-to-point air tickets, hotel rooms only
booking etc.
In Canada, online booking represent one-third of all travel spending while 60% of
travelers uses internet for pre-travel research (Malaysia: 14.7%) - Currently, many
tourist information websites are available on Melaka but none of these websites
posses e-commerce transaction capabilities and are mostly non-interactive types.
(PhocusWright, 2002) Tourists from North America and Europe recorded high online
travel bookings (>60% of world online travel), an are where Melaka Tourism Sector
should exploit
Higher foreign travelers, higher average length of stay and higher tourist spending is
possible if the state’s Tourism Sector leverages on the power of ICT
59
3.3. Health tourism growing and showing potential
There is room for collective campaigns among the private hospitals so that
the services offered are better reflected and promoted through the use of
ICT such as improvements in the pre and post hospitalization services such
as: from flight booking facilities to accommodation to proposed
recuperation activities for patients to relaxation with family at spa
resorts.
60
3.4. Education tourism growing and showing potential
Education tourism in Melaka is growing and has not been maximised yet.
Most students come from ASEAN and some from the Middle-East and China.
The use ICT can create more awareness among the ICT-savvy students
around the region of Melaka’s untapped potential.
61
3.5. New Growth Sector: ICT – A Powerful Enabler of the
New Economy
… For the purpose of development goals for a nation, ICT can be a powerful enabler…
Power to store, retrieve, sort, filter, • Applicable to all, personal, …because its unique characteristics
distribute and share information = business and government dramatically improve communication
efficiency gains in production, • Multifunctional & flexible and the exchange of information to
distribution and markets. • Developed to meet strengthen and create new economic
Supply and production chains diverse needs and social networks.
streamlined = leaner & > effective
business processes and transactions Pervasive &
Users can acquire from original
Leads to new products, services and
cy
Cross Cutting provider hence reducing need for
Di
en
distribution channels within traditional
Fa
intermediaries.
sin
ici
cil
industries + innovative business A considerable source of efficiency as
Eff
ter
ita
ins
models and whole new industries.
me
les allows for specific needs or
tes
Ga
Barriers to entry È, competition Ç
dia
ICT preferences to be served
ab
En
tio
Characteristics
n
Allows for zero or declining
n E work
Di
r
marginal costs.
git
ble
can transcend cultural and linguistic
et
al
na
In
&N
barriers anywhere, anytime
&V
Na
free regardless of its volume, and • Users with access can benefit from
al
irtu
tur
tio
marginal costs for distribution
ob
exponentially increasing returns as
e
ea
a
Gl
and communication are near Disseminates
l
Cr
usage increases
zero. Information &
ICT can radically reduce Knowledge
transaction costs. Separates content from
physical location
Flow of information impervious to geographic
62
3.5.1 ICT Value Added - Malaysia
12000.0
ICT Service Value Added (RM’ Mil)
4018.9
10000.0
3014.7
1271.7
2269.6
8000.0 708.1
RM Million
378.3
4000.0
2000.0
0.0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Value Added (RM’ Mil) 3.225 3.641 3.958 4.883 5.510 6.169 7.354 8.275 8.032 9.161 10.05
As a% of GDP (%) 2.8 2.9 2.8 3.2 3.3 3.4 3.7 4.5 4.2 4.4 4.8
Note: Does not include Wholesale, Retail and Rental of ICT products
63
3.5.2. Indicators - Malaysia
64
3.6. New growth sector - biotechnology and bioinformatics
65
Melaka ICT Strategic Blueprint
ICT development
zones Malaysia
Hong Kong
Singapore
Investment focus
Japan
Korea
Advanced
networks
Australia
India
China
Basic Philippines
Access
Facilitating Substantial Instrumental
Government involvement
Size of National ICT Spending
Source: Singapore IT Federation, February 2002
67
4.1.1. ICT Initiatives – focus of new economic strategy
Globally, ICT initiatives are becoming a vital enabler to economic development, taking shape in
almost every country
Singapore
United States
• Singapore One
• New federal • IT2000
Israel India Australia • InfoComm21
government portal
• Silicon Valley • S$1.5 billion on
• Leader in Internet • High volume of IT • Strategic Framework for
• Thought leadership, eGovernment
security prof. Information Economy
new business • Accelerated
• Reform of domestic • Rapidly upgrading • Access to skilled labour
models and deregulation of
telecom market. Mid infrastructure and • Sydney 2020 vision
exchanges telecom sector
2000 regulations. • Corprocure B2B exchange
68
4.1.2. ICT includes both manufacturing & services
Office, Accounting Television and radio Instruments and appliances Wholesale of machinery,
& Computing machinery transmitters and for measuring, checking, equipment and supplies
apparatus for line testing, navigating and
telephony and line telegraphy other purposes, except
industrial process Rental of office machinery
Insulated Wire &
equipment & equipment (including
Cable computers)
Television and radio receivers,
sound or video recording or
Electronic Valves & reproducing apparatus and Industrial process
Tubes and other associated goods equipment Telecommunications
Electronic components
Source : The OECD Definition of the ICT Sector, Measuring the Information Economy 2002, OECD
69
4.1.3. ICT as a Sector - Services
Malaysia adopts ISIC rev 3 definition of ICT which conforms to OECD countries definition
The following diagram shows the relevant economic activities which make up the ICT services sub-
sector in the Malaysian context. A more detailed explanation of the activities are attached in
appendix section.
ICT Services
Other Computer
Related Activities
70
4.1.4. ICT Value Added - Malaysia
12000.0
ICT Service Value Added (RM’ Mil)
4018.9
10000.0
3014.7
1271.7
2269.6
8000.0 708.1
378.3
RM Million
6000.0 218.3
4000.0
2000.0
0.0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Value Added (RM’ Mil) 3.225 3.641 3.958 4.883 5.510 6.169 7.354 8.275 8.032 9.161 10.05
As a% of GDP (%) 2.8 2.9 2.8 3.2 3.3 3.4 3.7 4.5 4.2 4.4 4.8
Note: Does not include Wholesale, Retail and Rental of ICT products
71
4.2. Other Local ICT Initiatives
72
4.2.1. Strategic Framework of Penang ICT Blueprint
adoption of e-business
Promoting the widespread
production processes
production and post-
knowledge intensive pre-
value chain towards more
Moving up manufacturing
customer experience
effectiveness and positive
machinery for efficiency,
E-enabling the government
social sustainability
and digital divide to attain
Eliminating the knowledge
development
Promoting local content
5 INITIATIVES / THRUSTS
K-Worker Electronic
Connectivity E-Economy Digital Equity Good
Development
Governance
Penang K-ICT Blueprint is formulated to provide a roadmap for the development of k-economy to support the
goal of a fully developed state by 2010 as enunciated in Second Penang Strategic Development Plan
73
4.2.2. Lessons Learnt in Penang K-ICT Blueprint
74
75
Modernize/diversify agriculture
Environment
house
Widen/increase number of
middle-class Bumiputra
5 INITIATIVES / THRUSTS
entrepreneurs (entrepreneur
10 STRATEGIC GOALS
development program)
Curb & eradicate social Effective
problems
Redefine/reorganize local
councils (environment, income
& expenditure)
Create pool of skilled &
technology literate labor force
Efficient
Integrated & comprehensive
education program
Balance of development &
growth in housing, forestry,
Educated
industry & agriculture
Support MSC, Putrajaya &
Cyberjaya
4.2.4 Lessons Learnt in Selangor ICT initiatives
76
4.3. Selective International ICT Initiatives
Belfast
Ottawa
77
4.3.1. Ireland – ICT as a Sector
Vision: Ireland to be a world leader in ICT by 2005
Strategic Strategic Strategic Strategic Strategic
Direction 1 Direction 2 Direction 3 Direction 4 Direction 5
Strategic Enabler 1
R&D
Strategic Enabler 2
Education
Strategic Enabler 3
Infrastructure
Develop
Achieve Attract new
Strategic Enabler 4 Move up expanded, Encourage
Centre of capital
technology educated and indigenous
Excellence intensive
Fiscal Policies & Incentives value chain responsive ICT sector
status investment
skills base
Strategic Enabler 5
Entrepreneurship
Strategic Enabler 6
Market relationships
Strategic Enabler 7
Intelligence gathering
78
4.3.1. Ireland – Focus, Sample Programs & Sample Results
Ireland Research & Promote liaisons between government ICT sector employs 90,700 people in
Development agencies, universities, multi-national & over 1,300 companies up in 2003
indigenous sectors; Enhanced venture (19,000 in 1990).
capital environment. Over 300 overseas companies in the
ICT sector have a presence in Ireland.
Education Increase students in technology subjects in
Indigenous software sector employs
primary, secondary & tertiary levels; Up-
18,000 people (3000 in 1992).
skill people in workplaces; Increase home
Ireland is the largest exporter of
access to technology.
software in the world.
Infrastructure Upgrade/Improve key road & air access; One third of all PC's sold in Europe
Develop regional airport hub. are manufactured in Ireland.
Turnover in the ICT sector was over
Taxation Introduce targeted tax relief for industry
€51 billion in 200.
to engage in R&D; Amend legislation on
Total exports of ICT products and
stock options to allow a greater number of
services amounted to almost €30
ICT companies to qualify.
billion in 2002 (34% of all exports).
Entrepreneurship Encourage ICT start-ups & In 2002, thirty-two IDA-backed ICT
entrepreneurship; Package financial firms invested €120 million in R&D.
incentives.
Market relationships Develop marketing package with IDA
Ireland.
Intelligence gathering Develop a statistical profile of the ICT
sector
79
4.3.1. Lessons Learnt in Ireland ICT initiatives
Association • ICT Ireland • Identified 7 key areas: • ICT sector have • Need to
(collaboration of R&D moved up the respond with
assoc.) Education technology value speed,
Infrastructure chain. decisiveness
Taxation • Ireland have an and innovation
Entrepreneurship expanded, educated to the
Market relationships and responsive skills constantly
ICT sector profiling base. changing
• Ireland have demands of the
attracted significant global
additional inward marketplace.
investment.
80
4.3.2. Victoria (ICT as Enabler & Sector)
Strategic Enabler 1
Governance
Strategic Enabler 2
Building a Growing Improving Promoting
Infrastructure Boosting E- Connecting
learning industries of infrastructure new style of
Commerce communities
society future & access Government
Strategic Enabler 3
Skills
Strategic Enabler 4
R&D
81
4.3.2. Victoria – Focus, Sample Programs & Sample
Results
Key Focus Sample Programs Sample Results
Victoria Building a E-Education. Student: computer ratio improved
learning society from 1:5 to 1:3.9.
Growing ICT Industry and Key Industry Symposium. ICT investments worth RM1.8 bil &
industries of Tourism Online to boost Victoria tourism 5000 new jobs created within 4 years.
future offerings online.
Bioinformatics Consortium to create an
emerging industry to grow.
Technology Demonstration Projects.
Boosting E- E-Commerce Exhibition Projects Program More than 1000 companies listed on
Commerce (ECEPP) to develop E-Business Clusters. VicIT.
E-Commerce Info Centre to establish a one- 39 councils shared RM4.7 mil to
stop-shop for E-Commerce. implement 26 e-commerce projects.
Connecting Connecting Communities 2001. More than 10,000 public internet
communities access terminals established.
82
4.3.2. Lessons Learnt in Victoria ICT initiatives (1)
83
4.3.2. Lessons Learnt in Victoria ICT initiatives (2)
84
4.3.3. Ontario (ICT as an enabler)
Infostructure
Strategic
Promoting Developing a
Enabler 2 Transforming Lifelong consumer-
government Learning
Infrastructure centered model
administration
Culture for healthcare
Strategic
Enabler 3
Incentives
& Policies
85
4.3.3. Lessons Learnt in Ontario, Canada ICT
initiatives
Organization Programs Actual Benefits Lessons Learnt
Government • Department of • Ontario Knowledge • ICT is integrated into the • Education is key
Education Network for learning environment in bridging digital
Learning which enable learners and divide
teachers to have
interactive learning
experience
• The establishment of
satellite Communications
for remote schools that
ensures equitable access
for learning programs
throughout the province
86
4.3.4. Key Lessons Learnt
decision making
IRELAND
Dublin
87
4.4. Interpreting the Vision
Core Values
Core Purpose
Rich in heritage
• Economic growth - ICT to accelerate growth of Melaka Service oriented
(as a sector & enabler) Progressive & dynamic
• Bridging the digital divide - Make ICT education Progress with Quality of Life
accessible & affordable to all citizens of Melaka
• Wealth creation - Utilization of Knowledge and ICT to
increase the wealth of citizens of Melaka
ICT VISION
“Recapture past glory through
rapid advancement in knowledge
and ICT towards a fully developed
K-State”
Envisioned Future
• ICT as an important sector in Melaka economy
• ICT as the recognized enabler for Melaka economic
sectors
• A developed state with balanced spiritual and
physical development
• K-Society
88
4.5. Strategic Thrusts
• Leapfrog economic growth using ICT to spur knowledge based value
creation
• Align ICT program to drive state economic growth and social priorities
• Focus and invest in key niche areas with quick wins and high potential
returns
• Complement federal & local initiatives to improve competitiveness,
productivity & value-add
2 3
Government Enhance
Service Delivery Economic
Excellence Competitiveness
Community Private
Sector Sector
THRUSTS
Public
Sector
Churning Out Knowledge Workers
1
“Recapture past glory through rapid
advancement in knowledge and ICT
towards a fully developed K-State”
89
4.5.1. LEAPFROG economic growth using ICT to spur
knowledge based value creation
… Melaka needs to maintain a minimum average GDP growth rate of 8% p.a.
to achieve fully developed state status by 2020 …
30805
25000
5000
0
2000 2005 2010 2015 2020
Year
Melaka Malaysia Population – 0.7 mil
Size – 1,650 km2
Source: 8MP, OPP3 & MSCTC Analysis GDP – RM12.2 bil (2004)
Note: Real Income Per Capita (Current Year) GDP growth – 7.4% (2003-2004)
Per Capita – RM17,556 (2004) 90
4.5.2. ALIGN its ICT program to drive state economic
growth and social priorities
Melaka should focus its efforts and resources on high growth sectors and
sectors with high value add while gradually reduce dependencies on
declining sectors and sectors with lower value add to the local economy
Manufacturing
28% Manufacturing
Services 3X 20%
Services
75%
… focus on strengths …
… address weaknesses …
91
4.5.3. FOCUS and invest in key niche areas with quick wins
and high potential returns
ICT as a Sector
Manufacturing
Guide: Services
Market Size – Shared Services/
Comparative Local &
Global industry size
Outsourcing
(SSO)
Growth Potential – Creative
Industry growth rates Multimedia
Competitive Advantage Bio-Informatics
– With respect to
Melaka’s strategic ICT as an Enabler
strength
Services
Access to Market – Ease
of entry Tourism
Education
Health
Biotechnology
Manufacturing
Support
92
4.5.4. COMPLEMENT federal & local initiatives to improve
competitiveness, productivity & value-add
s
rcse
throughout the State and position Melaka
soruce
Ac DDiissiinnt
ceA teerrmm
Reou
in the development efforts by Federal
scsc eeddi
toes
iliitta a
attee k
Government:
ss
or M
ces
Acces
eatr
Community Private
Ac
COMMUNITY
COMMUNITY PRIVATE
PRIVATE
ske
Sector Sector
National Broadband Plan,
D
SECTOR
SECTOR SECTOR
SECTOR
HR
sR/ D ts
Ac
cAec
/ tH
PUBLIC
PUBLIC
n
Public
ssce
SECTOR
SECTOR
altes
Sector
en
tsos
lT
Learning,
In
Ttoa
tof
Entry Identify
oIrnm
tsos
scse
for
atm
MSC flagships,
cAec
ioant
Ac
Access
Access
to to
Incentives
Incentives
ion
National Incubator Network,
National Agriculture Policy,
National Policy on Biological Diversity Prepare
Melaka needs to also provide compelling Source: MSCTC“ VIPER Model”
incentives in the form of hassle free
bureaucracy for investors.
93
4.5.4. COMPLEMENT federal & local initiatives to improve
competitiveness, productivity & value-add (2)
There are many potential investment/funding avenues available. Melaka can tap and leverage on
the vast amounts of funding available (RM 2.5 billion) for ICT and also the key services industries
Funding Type ICT Industry Industrial Agricultural Tourism Infra/Utility Other Ministries
Development Development Development Development
Govt. RM 2.5 bil RM 7.8 bil RM 1 bil RM 27bBil MITI, MIDA –
Allocation SME– RM1 bil Transport: incentives for
RM 22bil manufacturing,
Utilities: agriculture &
RM 5.5 bil tourism
Comm
RM 228 mil
Venture 20 Venture
Capital Capitalist RM2bil
Grants 12 Grant Schemes
with grants
totaling RM500 m
Focus To help spur the To strengthen Continue to be To obtain rapid Increase
growth of operations and guided by NAP3 tourism growth efficiency,
technology and capabilities of to be a modern, on a sustainable productivity,
also nurture R&D enterprises in dynamic and basis quality and
activities in the order to compete competitive reliability of
ICT industry liberally and sector infrastructure
globally facilities and
services
Eligibility Malaysian owned
co (30%)
MSC Status would
be more
advantageous
94
4.5.4. Strategic Thrust 4: COMPLEMENT federal & local
initiatives to improve competitiveness, productivity
& value-add (3)
Grant Scheme Focus Allocation
1. Commercialization of To provide partial funding to qualified R&D projects to be RM 100 mil
R&D (CRFD) commercialized
2. Demonstrator To encourage meaningful participation in ICT-based projects RM 100 mil
Application Grant and to encourage the use of knowledge for value creation
Scheme (DAGS)
3. E-Manufacturing Grant To assist SMEs to used ICT to improve their competitiveness, SMIDEC
efficiency & productivity
4. Engineering Design To assist SMEs to enhance their engineering design capabilities SMIDEC
Grant and enable them to carry out their own design in-house
5.Industry R&D Grant To build strong and innovative industrial technology capability MOSTE
Scheme (IGS) across all sectors
6.Intensification of To focus on R&D activities on areas which have potential for IRPA
Research in Priority enhancing the national socio-economic position
Areas (IRPA)
7. Market Development To assist SMEs in undertaking activities for the development of MATRADE
Grant (MDG) export markets
8. MSC R&D Grant Scheme To assist in developing relevant multimedia technologies & RM 100 mil
(MGS) applications in line with MSC
9. Rosettanet Grant (RNG) To prepare Malaysian cos for early adoption and RM 5 mil
implementation of RosettaNet
10. Technology Acquisition To promote technology upgrading through the introduction & MTDC
Fund (TAF) utilization of modern and efficient technology in
manufacturing & physical development of existing & new
products & processes
95
Melaka ICT Strategic Blueprint
97
5.2. Strategic Direction I: Focusing on High Growth Sector
98
5.3. Strategic Direction II: Developing K-Society and the
Necessary Skill Base
Strategic Direction 2 Strategic Direction II focuses on key actions to be taken to mould the citizens
Develop Knowledge- of Melaka towards K-Society status which is imperative to move Melaka
Based Society & Develop towards a developed K-State by 2010:
Responsive Skill Base
Efforts should be made to enhance infrastructure and facilitate information
Strategic Actions
dissemination capabilities. This will primarily involve an deliberate effort
Enhance infrastructure to from the State Government to create a 5% critical mass of users which is
improve information critical to encourage vendors of last mile connection to be commercially
dissemination/availability
active.– promotion in Melaka? – wireless city - Promote broadband/wireless
Create ICT awareness and access at key community areas
cultivate interest in
knowledge and ICT Continue efforts to bridge the digital divide by creating programs focusing
Develop or expand on creating ICT awareness and to cultivate interest in knowledge and
human capital through utilisation of ICT. This may involve further developing the existing E-
targeted knowledge and Melaka program to focus on awareness campaigns for communities with low
skills development
exposure to ICT (e.g. populations in rural areas and non-k-workers).
Create incentives to
encourage partnership Develop and expand human capital via programs dedicated to educate and
between IHLs, R&D train relevant entrepreneurs and workers in the targeted high growth
centres and the industry
sectors
Create partnerships with IHLs, R&D Centres and the private sector to
ensure that relevant academic courses and research work are develop to
maximize the potential of the targeted high growth sectors (e.g. Tourism
Diplomas, Hotel & Catering Degrees and Content Development on Culture
and Edutainment)
99
5.4. Strategic Direction III: Creating a “Client-Friendly”
Government
Strategic Direction 3 Strategic Direction III focuses on key actions to be taken to steer the State
Government of Melaka towards K-Government status – an essential ingredient
Create a Client-Friendly
Government
to move Melaka towards a developed K-State by 2010:
Making the Government more efficient, transparent and accessible to its
Strategic Actions clients using the power of ICT. This will include connecting the services of
Making the Government PBTs and Government Departments to the internet and promote higher
more efficient, accountability and transparency in service offerings.
transparent and
accessible to its clients Review/realign processes and implement EG at state level to promote an
using the power of ICT
efficient, transparent and accessible government
Support transition to
electronic government Implement Change Management program parallel to development of new
environment through processes to facilitate transition of processes and guide users through the
retraining and change
management programs
entire Awareness, Interest, Desire and Acceptance (AIDA) cycle
100
Melaka ICT Strategic Blueprint
Program 2
Program 2
Attract
AttractSSO
SSOFirms
Firms
Program 1 Program
Program33
Program 1
Tourism
TourismPromotion Tourism
Promotion TourismContent
Content
Portal Development
Portal Development
Strategic Direction 1
Strategic Direction 1
Increase economic
Increase economic
wealth by focusing on
wealth by focusing on
high growth sectors
high growth sectors Program 4
Program Program 4
Program66 Re-position
Biotechnology Re-position
Biotechnology&& Health/Education
Bioinformatics Health/Education
Bioinformatics Tourism
Tourism
Program
Program55
Partnerships
Partnershipsfor
for
Organized Growth
Organized Growth
102
6.1.1. SD-1 Program: Tourism Promotion Portal
INITIATIVE
• To upgrade and unify current tourism related websites in Melaka under one
comprehensive tourism portal sponsored initially by the State Government –
portal may be handed over to the private sector once critical mass is achieved
• To provide opportunities for small and medium players in the Melaka Tourism
Sector to offer their offerings on the internet E
• To facilitate electronic purchase of tourism products in Melaka
RATIONALE
• At present, the current portal is static and non-interactive. Tourists should be able to do
everything on the internet from booking flight to booking hotel rooms to finding information
about in-city transportation to operating hours of tourist spots.
• Electronic purchase over the internet can be stimulated if it is fully backed by a trusted party the
such as the State Government
• A State Government backed portal will make it financially feasible for small to medium tourism
product supplier to market their product electronically
POTENTIAL BENEFITS
• Exposing the local tourism sector to more tourists specifically from developed nations with higher
spending power
• 40%-60% boost to tourism earnings in the State above the existing growth pattern – estimated
increase of RM1.3 billion to RM2.0 billion of GDP per annum
103
6.1.2. SD-1 Program: Attract SSO Firms
INITIATIVE
• To attract Shared Services Outsourcing Firms to choose Hang Tuah Jaya as the
preferred centre of operations
RATIONALE E
• Melaka’s position in between the Klang Valley and Singapore makes it an attractive location for
SSO Firms
• The creation of a Cybercentre in Melaka will enable Melaka create the ideal business environment
(high quality infrastructures and performance guarantees) which is conducive to SSO business
• Melaka posses the right balance of hard and soft infrastructures with reasonably high quality of
life to attract SSO businesses
• Currently, Singapore Telecom is using Melaka for its SSO due to its cost advantage and various
factors conducive to the SSO business
POTENTIAL BENEFITS
E
RATIONALE
• Melaka possess the right mix of IHLs to support a Tourism/Culture/Multimedia Content Industry
• Virtual tours, clips and scenes will be developed using existing archives and scriptures. Output
from the Content Industry will then serve to increase the quality of tourism products (e.g.
museums, zoos, tourist parks, etc) and attract nurture more interest and boost revenues from the
tourism sector.
• As content will be required to be continuously updated, a steady stream of income will be
generated to create a sustainable growth to the proposed Content Industry and attract more
technopreneurs to participate and locate their operations in Melaka
POTENTIAL BENEFITS
• Contributing towards making Melaka a more “event tourism” oriented from the existing “place
tourism” oriented. This will encourage more repeat visits by tourists and further boost income
and growth of the local tourism sector
• Creating Melaka’s own Content Industry generating up to RM500 million demand in the local
economy
• Encourage the creation of critical mass in the Content Sector which will ultimately grow beyond
serving the local tourism sector
105
6.1.4. SD-1 Program: Re-position Health/Education Tourism
INITIATIVE
• To collaborate with the Health and Education sectors and review/reposition
offerings on Health and Education Tourism around suitable niche within each
sector (e.g. Education Tourism to focus on tourism management, Hotel
catering, public relations, multimedia content development, etc. while Health
Tourism to focus on Cardilogy, Cancer, etc) E
• Including the re-packaged Health and Tourism sector products on the Central
Tourism Portal initiative highlighted under SD-1
RATIONALE
• Currently each health/education tourism sector is promoting itself in isolation without specific
focus. Both sector needs to be repositioned and strengthen in specific niche areas to create a
clearer market positioning to their clients and attract more high value clients
• Melaka needs to ensure that the market it carves for itself in both sectors are sustainable. A
clear market strategy which involves specific niche and focus areas will make Melaka more
attractive to potential clients while at the same time ensures that investments made in marketing
reap maximum returns. Carving the right niche and focus areas may also reduce effect of
competing and similar sectors in neighboring nations
POTENTIAL BENEFITS
• Advertising and promotion cost would be reduced as it is shared between the health/education
and the tourism sectors
• Stronger brand as Melaka places herself in a niche specialized market
106
6.1.5. SD-1 Program: Partnerships for Organized Growth
INITIATIVE
• To create partnerships with commercial and IHL organizations to ensure that
other sectors of the economy grows in tandem with the demand created by
key focus sectors.
RATIONALE E
• Requirement of knowledge workers and technology companies such as higher quality housing,
entertainment, office space and etc can be developed to further improve the commercial
attractiveness of the state for business relocations and as centre of operations
• Demand generated resulting from the expansion of focus sectors (tourism, ICT and biotechnology
sectors) can be anticipated and met to encourage a higher yet more balanced growth in the local
economy
POTENTIAL BENEFITS
107
6.1.6. SD-1 Program: Biotechnology & Bioinformatics
INITIATIVE
• Focus on biotechnology and encourage the use ICT to maximize potential. Set
up database centre for biotech & bioinformatics
• personalized medicine & healthcare
• traditional herbal medicinal plants
• cataloging DNA marker technology for herbal & traditional medicine E
• database screening for anti cancer
RATIONALE
• Growth of biotechnology sector estimated to average from 12% to 17% annually will further boost
the State’s GDP
• Biotechnology and bioinformatics sector is expected to be the leading growth sector in the world
economy by 2030 and will continue to lead for a century to come
POTENTIAL BENEFITS
• Improved processes of biotech product, with spillover effect of improving cottage industries, e.g.:
higher quality and longer lasting cencaluk, dodol and gula melaka enabling bigger commercial
possibilities and higher profits
• Participate in the high growing Malaysian herbal sector (estimated at RM2 billion annually) which
is expected to grow to as large as RM13 billion by 2020
108
6.2. Strategic Direction II: Developing K-Society and the
Necessary Skill Base
Program
Program11
Development
DevelopmentofofCritical
Critical
Mass
Mass
Strategic Direction 2
Strategic Direction 2
Develop Knowledge-
Develop Knowledge-
Based Society & Develop
Based Society & Develop
Responsive Skill Base
Responsive Skill Base
Program
Program44 Program
Program22
Aligning
AligningIHLs E-Melaka
IHLs E-Melaka
109
6.2.1. SD-2 Program: Development of Critical Mass
INITIATIVE
• To develop critical mass of broadband users to encourage industry players to
rollout infrastructure at the last mile. For the State Government, this shall
involve connecting schools, IHLs, hospitals, government buildings, community
centers, shopping malls, mosque, libraries and etc
E
RATIONALE
• According to the National Broadband Plan, Malaysia has abundant availability of domestic
backbone capacity as compared to last mile broadband infrastructure – a critical mass (5%
connectivity) will encourage industry players to rollout infrastructure at the last mile
• Broadband is critical in the development of k-society, k-economy and the quest to be a developed
k-state:
• Pre-requisite for high-speed info-communications access
• New benchmark on national infrastructure and country competitiveness
• Support expansion of Multimedia Super Corridor (MSC) nationwide
• Facilitate the rollout of e-government and other flagship applications
• Potential for bridging the digital divide hence the knowledge divide
POTENTIAL BENEFITS
• Intervention by the State Government (i.e. connecting Government agencies, schools, hospitals,
etc) in developing critical mass will assist telecommunications industry to rollout broadband
widely within the State and help in the efforts to develop a k-society in Melaka
110
6.2.2. SD-2 Program: e-Melaka
INITIATIVE
• To persist and continue with e-Melaka program to connect communities and
increase ICT awareness specifically among rural populations and other
segment of the population which are not exposed to ICT development
RATIONALE
• In its effort to develop a k-society, community and awareness program such as e-Melaka is
important to ensure that
• ICT awareness campaigns are implemented for population segments that are still not exposed
to ICT development
• Promote the State Government’s efforts to leverage on ICT to be more transparent and more
customer friendly. This will ensure that more support can be gathered from the public - a
critical ingredient of success
POTENTIAL BENEFITS
• Increase visibility of the State Government efforts to the public and will help the Government to
gather support from the public to bridge the digital divide
• Act as a promotional campaign to inform the public of new developed e-Government applications
and improve the ability of the Government to deliver its services more efficiently and effectively
111
6.2.3. SD-2 Program: Aligning IHLs
INITIATIVE
• To align IHLs in Melaka to offer more courses relevant to focus economic sectors
(i.e. tourism, ICT and biotechnology sectors)
• To encourage IHLs to get relevant accreditation from Lembaga Akreditasi Negara
(LAN) and be more attractive to both local and overseas students
RATIONALE
• As courses are recognized by LAN, IHLs will be more attractive to students, local and foreign.
• Currently, there are not many IHLs offering courses in the services industry and Melaka is able to
fill the niche
POTENTIAL BENEFITS
• Development of k-workers which are suitable and relevant to key economic sectors
• Creating an academic centre of excellence in the tourism and ICT sectors
• Foreign students will help generate income through long stay
112
6.3. Strategic Direction III: Creating a “Client-Friendly”
Government
Program
Program11
Connecting
ConnectingPBTs/Depts
PBTs/Depts
Program
Program33
Change
ChangeManagement
Management
113
6.3.1. SD-3 Program: Connecting PBTs/Depts
INITIATIVE
• To connect PBTs and government departments to each other creating a web of
information
• Offering of services online
RATIONALE E
POTENTIAL BENEFITS
114
6.3.2. SD-3 Program: Implement EG
INITIATIVE
• To fully implement electronic government at the State Government - the e-
Government programme aims at reinventing how the State Government works
and improve the quality of interactions with citizens and businesses through
improved connectivity, better access to information and services and better
processes and systems.
RATIONALE
• To integrate all State Government and federal EG initiatives and develop e-clusters i.e. tourism ,
education, health, ICT and biotechnology
• To enhance electronic delivery channel and mobile capability for Government portal
• Multi-channel delivery of services (Internet, WAP, Public access points and Call centres)
• To enhance efficiency of State Government’s overall service delivery
POTENTIAL BENEFITS
115
6.3.3. SD-3 Program: Change Management
INITIATIVE
• To implement change management programs throughout the entire State
Government parallel to the implementation of e-Government and the rollout
of online services from PBTs and other agencies
RATIONALE E
• Many are not ready to implement EG without training – Change Management programs will ensure
that the advancement and improvement in technology and processes are supported by the
appropriate quality and quantity of training programs and awareness campaigns to win the total
support and commitment from Government staff
• Past experience and lessons learned from the implementation of e-Government at Federal
Government has shown that appropriate investment in Change Management is critical to ensure
both people and technology can function in harmony to meet pre-implementation goals
POTENTIAL BENEFITS
• Ensure that the transition from traditional processes to technology driven processes can be
implemented smoothly with minimal user resistance
• Ensure that all affected Government staff are well educated of the benefits of new processes and
e-Government as a whole which is important as any negative feedback/perception from
Government staff can negatively affect Government services to the public. Degradation of
services resulting from lack of investment in Change Management may eliminate many potential
benefits that should be reaped with e-Government implementation
116
6.3.4. SD-3 Program: Customer Relationship Management
INITIATIVE
• To implement a CRM solution for the entire state government to create a
client friendly environment for businesses and citizens
RATIONALE E
• CRM solutions will ensure that all issues and problems arising from Government services rendered
to business and the public are handled swiftly
• Implementation of such solutions will reduce bureaucracy and highlight weaknesses in
Government processes facilitating continuous improvement and promoting a performance driven
culture
POTENTIAL BENEFITS
• Melaka to be attractive for business due to the transparent and client-friendly environment
• Create Government that is more knowledge and information driven as opposed to the traditional
Government that is slower and process driven
117
6.4. Summary of Programs and Projects
118
Melaka ICT Strategic Blueprint
Project Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
120
Melaka ICT Strategic Blueprint
8.0. CONCLUSION
8. Conclusion
25% 20%
Enhance Economic Developing
Competitiveness K-Society
RM10 mil
RM43 mil Biotechnology
Broadband RM108 million for 13 projects within 5 years
Content
Critical Mass towards K-State development
Development E-Melaka
3
Critical Success Factors:
10 5
SSO Sector
5 Connecting PBTs “Result oriented” - Focus on ICT
Development
5 implementation and buy-in rather than
hardware and infrastructure
15
“People centric” - K-Society (K-Workers)
Tourism 15 development utmost importance to fuel
Promotion economic growth in service centric
Portal
environment
“Synergy & Sharing” - Integrated &
10 Collaborative implementation vital across
30 public sector, private sector and
10 communities
CRM Solution
“Control over things...then things under
Change
E-Government, control” – Professional management of
Management projects (K-State program) needs capable
delivery focused team, hands-on, on-
RM65mil ground
“Proactive not reactive” – Projects need
Government Service Delivery to have longer term view, regional and
Excellence global focus and responsive to market
55% changes ad dynamism
122
Thank you
123