Artificial intelligence (AI) will impact jobs and how work is completed worldwide and across many industries. Similar to how computers and smartphones became ubiquitous, it is likely that workers will start relying on AI tools to increase efficiency. The current versions are still very new.
The technology entered mainstream conversation with the release of ChatGPT in November 2022, and AI adoption in Malaysia has already reshaped workflows. All eyes are on the potential benefits of AI in Malaysia and what it means for the Malaysian economy.
Celine Ting from OpenAcademy discusses future-proofing the workplace by upskilling and reskilling amid Malaysia’s AI advancements
Moving towards AI adoption
AI adoption could lead to a USD 4.4 trillion growth in the world’s GDP. These gains will likely come from productivity benefits, which can help companies operate more efficiently, producing more with less. Within the ASEAN region, the discussion around AI is quickly gaining traction. Both corporations and governments are looking at ways to leverage this technology to boost economic output.
Malaysia is in a unique position to integrate AI as part of its overall digital transformation movement. Its government is already taking proactive steps, such as releasing the National AI Framework, which aims to govern AI use, and entering into strategic industry partnerships.
Combined with existing digital adoption initiatives such as the Malaysia Digital Economy Blueprint and National Fourth Industrial Revolution (4IR) Policy, the government aims to position Malaysia as a technological leader within the region.
The aim is for digital transformation to contribute 22.6% to Malaysia’s GDP by 2025. One of the key things driving AI adoption is massive AI education and reskilling efforts. The government has already helped approximately 1.5 million people learn how to leverage AI in their work.
Reshaping Malaysian industries
Malaysia aims to become a high-income, digital-first nation. Realising this vision will involve integrating AI and keeping up with the latest technological developments. AI is already influencing dominant sectors such as manufacturing and consumer services.
For example, generative AI can help improve manufacturing processes by relying on prescriptive maintenance instead of predictive maintenance. Hospitality chains are also turning to technology for help with guest services and resource management.
Another industry leveraging AI is finance. Banks in Malaysia are using AI for customer service as well as fraud detection. Similarly, healthcare is experimenting with AI to help with diagnostic services.
Further, AI is more than just reshaping existing industries. It is also pivotal in creating entirely new products and services. For example, several startups have sprung up across Malaysia, working on autonomous vehicles, virtual assistants, and personalised education platforms. AI can also help mitigate environmental risks by monitoring air quality and keeping track of emissions.
Economic impacts of AI
Malaysia is particularly suited to take advantage of the AI boom in Southeast Asia. Research suggests it will bring USD 55 billion to Malaysian businesses by 2030. This windfall accounts for 9% of the country’s total projected GDP in 2030.
Realising this potential will require upskilling and developing new talent. Demand for digital-savvy talent grew 200% over the first quarter of 2024. IT systems design and engineering services led to this demand. Meeting these new skill requirements could add USD 19 billion to Malaysia’s annual GDP in 2030. Some critical skills will include prompt engineering, data analytics, and UX design.
It is also possible to find economic benefits of AI in unlikely spaces. Currently, Malaysia ranks 8th worldwide for being most affected by cyber crimes. New AI capabilities will likely boost cybersecurity efforts, which can help prevent losses of up to USD 11 billion to the Malaysian economy.
Challenges in AI implementation
There are three big headwinds stakeholders face in AI implementation: high upfront and ongoing investments, increasing complexity, and lack of security.
Companies that are looking to leverage the latest AI technology will need to invest significant sums of money in ensuring that they have the proper infrastructure in place, that their workforce has the skills required to leverage that infrastructure, and that foolproof systems are in place to integrate AI into the company’s workflow.
Furthermore, 82% of business leaders stated that the complexity of the technology is a significant hurdle towards AI adoption in Malaysia. There are now several diverse options available in the market, creating the need for careful decision-making.
Lastly, data privacy and security are crucial components. Companies that are leveraging AI will need to ensure that their internal data is completely safe from leakage. Additionally, they need to use consumer data in the right way and per the mandates of the law.
AI presents an opportunity for the Malaysian economy with significant rewards. The industry and the government will benefit from collaboration and exploring synergies around its use. AI in Malaysia is still relatively new, with many possibilities remaining open for exploration.