Penang Commits US$12mil for its Digital Transformation Masterplan 2021-2023

Long one of the leading advanced engineering based manufacturing locations in Asia, the Malaysian state of Penang will now be investing big into its digital transformation. They have just announced the Penang Digital Transformation Masterplan – an initiative to ramp up the state’s digital leap forward over the next three years. The state intends to spend US$12.15 million (RM50 million) to achieve this.

Penang’s chief minister Chow Kon Yeow (pic below), the chief driver of the initiative, said the agenda will work in tandem with the development of the physical environment, as well as the aspects laid out in the Penang2030 vision, which aims to transform the state into a family-focused, green and smart state.

The responsibility for executing the digital plan with its four strategic pillars: Economy, Infrastructure, Governance and Community, will be led by the state’s Digital Penang agency, formed 11 months ago and which sits under Chief Minister Incorporated, the state’s investment arm. And while some feel that InvestPenang could have expanded its role and done the job of Digital Penang, an ecosystem observer in Penang feels having a separate agency signals the state government’s serious intent. “This allows them both to ge more focused on their responsibilities.”

“Digital Penang was established to enable and orchestrate our digital strategy to capture opportunities in the New Economy and upgrade liveability,” said Chow.

With a small team of around 10 people, its CEO, Tony Yeoh, tells DNA that the plan was prepared without any external consulting. With his agency expanding and hiring new people, the ecosystem observer says it is important that Yeoh hires the right people to his team. Yeoh did not address DNA’s query about the types of skills set he has in his team.

Not all the heavy lifting for the Masterplan will be done by Digital Penang with Yeoh sharing that some of the pillars will be executed by other agencies. “For example telco infrastructure is by PDCTELCO and local government departments; tourism digitalisation is by Penang Global Tourism, while attracting FDI is by InvestPenang.”

Digital Penang is also reaching out to other governments that have already began their digital journeys. Yeoh notes that Digital Governance transformation may take longer, “hence the focus is on laying the foundations for data collection and sharing, guidelines for architecture and process integration.” Here Penang has reached out to the United Kingdom’s GDS (Government Digital Services), which is sharing their experience in the UK. The UK GDS is tasked with transforming the provision of online public services.

Designed to be cross-domain over all sectors of the economy and levels of government

In the published Digital Transformation Masterplan (DTMP) booklet, Chow added that the plan was “strategically designed to be cross-domain over all sectors of the economy and all structures in the State Government.” For example, the four strategic pillars reflect the themes of Penang2030.

“Penang2030 has two complementary facets of digital and physical strategic initiatives. Digital is an enabler that must go in tandem with the development of the physical environment and vice versa,” said Chow.

The masterplan is also aligned to Federal strategies as outlined in MyDigital, JENDELA and Malaysia Digital Economy (MDEC) initiatives. According to the booklet, the masterplan will align sub-plans that include the Penang Connectivity Masterplan, SmartState Masterplan, Penang Green Agenda and Penang Tourism Masterplan, to ensure consistency in experience and outcomes.

Monitoring progress and having skin in the game

In terms of how progress will be monitored and what benchmarks will be used to gauge successful execution and the spending of the RM50 million, Yeoh stresses the importance of laying the foundation with proper infrastructure first.

With the state government’s belief that going digital depends heavily on having the right infrastructure, the Masterplan booklet (there is a 100-page full Masterplan with more details spelled out but it is unclear if the state plans to make this publicly available) outlines digital gaps the state is facing, and how they intend to bridge it.

Under “Infrastructure”, the Masterplan’s focus is to align the implementation of the Penang Connectivity Masterplan (one of the steps under Infrastructure improvements) with the JENDELA plan by the Malaysian Communications and Multimedia Commission (MCMC), which includes maximising 4G infrastructure, expanding fibre network, and the inevitable rollout of 5G.

As to how the funding will be used, Yeoh (pic above) explains that targets and milestone checkpoints will determine the approval of funds by the state Exco and these are defined in the full 100 page Masterplan document.

“The targets will be announced when an initiative is launched. Our approach to incentives and any intervention programs are very outcome based and we expect skin in the game from all players,” says Yeoh.

Building upon what’s set

There is, expectedly, a larger focus on developing the digital economy of Penang under the masterplan. The state intends to build on their core strengths in high-tech manufacturing, with the attraction and inbound of foreign direct investments to continue as a mainstay strategy.

Beyond that, there will be a focus on building the local enterprise ecosystem to go digital and international. “Through automation and digitalisation, our local companies are more competitive to go outbound, especially manufacturing in the advent of Industrial Revolution IR4.0,” the booklet explains.

Building on their strengths in electrical and electronics (E&E) manufacturing, as well as having extended into medicaltech, automotive electronics and avionics, Penang will strategise on and develop the “next adjacent sector” to build on this engineering competence.

In strategising here, Yeoh says the state will rely on its successful homegrown entrepreneurs. “Yes, we are rallying local entrepreneurs that have been successful eg Vitrox, Pentamaster, Greatech. We want them all to be part of the ecosystem.”

They also intend to intensify the software engineering and ICT sector, along with an emphasis in STEM education to build talent.

The Masterplan does acknowledge that Penang’s economic pillar of tourism and the creative economy were battered by the Covid-19 pandemic. However, they intend to be ready when the sector revives and invest into digitalisation “to create a new experience” in this sector. The details of what exactly this means, have not been shared yet.

The plan ahead  

One of the more interesting plans in the Masterplan is the creation of a “Digital Twin” of the state, with the government aiming to digitalise geospatial data of all layers of utilities and infrastructure network overlay onto the built environment. This will then allow them to improve decision making and streamline any deployment process.

Under “Governance” the state intends to shift towards a “rakyat-centric” approach in delivery government services. The plan is to digitise core citizen-facing processes end-to-end with a data and API-first architecture to enable integration across multiple agencies, to drive adoption of digital services.

In preparation for new cities that will sprout in the future, the Penang state will also develop a “Smart City Reference Model” of best-in-class practice and tools to prepare for the development of future cities within the state.

Under “Community”, the Masterplan’s strategic theme is to raise digital literacy and raise technology adoption through mentoring and coaching. Digital Penang has already been busy in this area having launched #DahDigital programmes which provided jobs during the pandemic by hiring Digital Promoters to encourage adoption of ewallets.

This initiative has reached 15,000 people. At the same time, Digital Coaches conduct classes all over the state to teach usage of apps such as smart parking, ride hailing, e-banking, email etc to the more technology challenged segments of community in various languages and dialects.

“We will also be giving sales training to some of the Digital Coaches and equip them with Digital Sales and Marketing skills to assist startups to sell their digital products,” adds Yeoh.

The state also intends to use technology as another channel to engage the public to crowdsource ideas, feedback and opinions in policy-making, with digital platforms being used to engage the community, foster dialogue and mobilise digital volunteerism.

Asked if the state was targeting any low hanging fruits to achieve by end of this year, Yeoh points out that the Digital Penang office is located in the heritage area, “and we will converge initiatives into that area as a showcase of the themes of Penang2030.”

It should be noted that the heritage area falls under the Penang Bay initiative, a big push by the state government to rehabilitate and rejuvenate the water-based assets of George Town and Butterworth into a dynamic space aligned with the United Nations’ Sustainable Development Goals (SDGs).

With a major and encompassing initiative as the Penang Digital Transformation Masterplan, winning the public and other stakeholder support through regular progress updates is key but here, Yeoh says the Penang2030 office will decide on this. However, he adds, “Digitalisation is a feeling. We will know if we are on the right track when we do see and feel visible change, especially in adoption and investment.”

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