Is Penang Daring and Techy Enough for the Digital Age?

Digital technology is redefining the way we live. It used to be that businesses took years to establish a global footprint; today, such a presence can be achieved quickly using e-commerce platforms. High-performance computing and blockchain technology are challenging the notion of traditional professional jobs. Procedures are fast being revamped; productivity boosted. The “take-a-number-and-wait” procedure can now be done remotely through web applications.

These are just the tip of the iceberg.

Many thought leaders have made the case that no one domain will be excluded from the effects of digital technologies. This is built on the understanding that digital technology is classified as a general-purpose technology – a term referring to technologies that continually transform themselves, progressively branch out and boost productivity across all sectors and industries.

Only three other technologies have been classified this way: the steam engine, the electricity generator and the printing press.1 The pervasiveness of digital technology – and more importantly, the speed at which it is changing our environment – should prompt us to rethink almost everything in light of these developments. As with any significant change, there will be both losers and gainers. Thinking about how digital technology will affect us is therefore useful to both pre-empt its negative effects and leverage its potential benefits.

The job for this child might not even be invented yet.

Will You Still Have A Job in 10 Years' Time?

The University of Oxford’s Future of Humanity Institute recently reported their prediction on when artificial intelligence (AI) will outperform humans in various activities. The results: translating languages (in six years), telephone banking operator (in eight years), driving a truck (in nine years) and working in retail (in 13 years).2 In another, the McKinsey Global Institute predicts that 22% of current work activities in Malaysia will be displaced by automation between the years 2016 and 2030.3

The future has never looked both so exciting and bleak at the same time – exciting because there is a certain novelty in pushing the boundaries of science and exploring the new opportunities that come with it; but bleak because jobs and people’s livelihoods are at stake.

To be sure, there will be new jobs. For example, history proved the textile Luddites wrong on two fronts: destroying technology will not halt its progress; and technology did not make human labour obsolete. Rather, if the modern-day textile industry is any indication, jobs in the industry augment themselves to incorporate current technologies while also creating new ones.

In fact, it was not even a decade ago that jobs like data scientist and automation specialist were unheard of. Today, science, technology, engineering and mathematics (STEM)-related jobs are among the most highly demanded in every industry.

Digital technology has its limitations, though, and researchers generally agree that jobs that involve creativity, social intelligence and manipulation are unlikely to be automated.

This begets the question: are our schools preparing students for jobs in the digital era? Ooi Peng Ee, CEO of Penang Science Cluster, finds it hard-pressed to say yes.

Initiated by the Penang state government in 2009 and led by industrial players, Penang Science Cluster (PSC) is on a mission to spark student interest in science, technology and innovation. In 2018 Penang Science Cluster had an outreach network of 209 schools in Penang, organising workshops from Lego robotics to computer coding and even aeronautics – slated to begin this year.

The number of schools involved with Penang Science Cluster is a testament to the growing interest in STEM by students, and an acknowledgement by schools that this is indeed important. However, Penang Science Cluster’s wide network also reflects tacit admission by schools of their inadequacy to equip students with the necessary skills for the future.

According to Ooi, “The Lego robotics programme in schools, for example, involves Penang Science Cluster sourcing for funds to purchase hardware and volunteers to both train and facilitate the year-long session in schools. At the end of each programme cycle, Penang Science Cluster retrieves the hardware, replenishes spoilt and missing parts, and repeats the cycle.”

The only reciprocity required of the school is the permission for Penang Science Cluster to operate, and to identify a suitable teacher as a liaison. This seems to be an unfair allocation of responsibility – in an ideal scenario, the services provided by Penang Science Cluster should be naturally present internally within schools. The reality is that the teaching of these critical skills has by necessity been transferred to non-profit organisations and industry players who act out of a sense of social responsibility.

To be fair, schools operate within a larger institutional framework – one with considerable constraints and highly regulated structures. One cannot be faulted to conclude that the predicament of schools is a reflection of an education system in need of a shake-up.

Local businesses have yet to fully comprehend what digital transformation is: business process transformation in a completely digital environment ... merely using a computer at work is not digital transformation.

Ready, but Able?

In the domain of businesses, digital technologies have gained much attention with the popularisation of buzzwords such as big data analytics, cloud computing, Internet of Things (IoT) or in general, Industry 4.0.

The danger with buzzwords, however, is that they could end up becoming just that. In reality, digital technologies present a viable opportunity for businesses to pursue a growth agenda – an exponential one even. The flipside is equally true: the absence of digital technologies presents a high possibility of losing out – not because a business is performing badly, but because others that utilise digital technologies are simply much better.

Today, science, technology, engineering and mathematics (STEM)-related jobs are among the most highly demanded in every industry.

Many have argued that the proposition for adopting digital technologies should be mooted in terms of productivity. Unlike the more traditional measures of profit, “productivity is a measure of long-term growth,” says Dr Suriati Zainal Abidin, senior manager of the Malaysia Productivity Corporation (MPC) for the northern region.

If viewed from the lenses of profitability, digital technologies can easily be mistaken as a cost to business owners, while if viewed from the lenses of productivity, they would be perceived as an investment – a long-term one, at that. Suriati opines that in order for businesses to compete in the digital economy, they should begin by changing their perception from profit to productivity and long-term growth: “If your profits increase by 5% every year but your cost is also increasing, you’re not growing. Long-term growth is about increasing the level of growth,” she stresses.

Technology practitioners who are in the business of providing digital solutions echo this view. For a local solution provider like Starlab Technology, the failure of businesses to consider technology as a productivity tool is even more acute. “Many local businesses are only interested in short-term cost savings and are often fixated on reducing headcount,” laments Lam Chern Kit, chief technology officer at Starlab.

Robotics gizmo on display at the launch of Penang STEM, the common platform to bring together various independent STEM learning organisations in Penang. Penang Science Cluster is attached to Penang STEM.

In comparison, businesses in Taiwan for example consider more complex variables like energy and material optimisation with equal importance – a view consistent with the notion of productivity. It is therefore unfortunate that despite having home-grown solution experts and patented technologies, the majority of local businesses are in many ways not yet ready to accept such advancements.

The authors of the report point to a “computerisation trap” – a phase that Malaysian SMEs find themselves in when successfully embracing computerisation, but not digitalisation. In other words, local businesses have yet to fully comprehend what digital transformation is: business process transformation in a completely digital environment.

To many, digital transformation is misunderstood to be the adoption and usage of digital devices: merely using a computer at work is not digital transformation. In many respects, however, this is understandable – expected, even. Imagine a local mom-and-pop plastic manufacturing SME: in between dad’s production floor managing, mom’s hiring and book-keeping duties, and the son’s sales drive, digitalising business processes almost sounds like a bad joke.

Tech Dome's outreach programmes to get kids interested in STEM.

But the drive towards digital transformation is imperative to the survival of local businesses and the future of the Malaysian economy as a whole. The Industry4WRD Readiness Assessment offered by the Ministry of International Trade and Industry through MPC is a good starting point. Fully funded by the government, it presents local manufacturing businesses with a comprehensive baseline of their capabilities and readiness to adopt digital technologies and their associated strategies.

A useful next step would naturally be to set up networks of digital solution providers for businesses to tap into. Here, Penang is at a huge advantage to initiate such a network given its readily available ecosystem of solution providers and highly potential customers; the difficulty lies in how to effectively set up such a network.

Government Support

The public sector is not spared from being affected by digital technologies. The prevalence of digital technologies and the convenience that come with them have put increasing pressure on governments to deliver services with equal convenience.

The public, for example, is more likely to question why they have to fill up multiple copies of the same document, or why documents have to be handed in in person, backed by common knowledge that in this digital age, data can be digitised and easily moved around between government departments.

Governments are also expected to address increasingly challenging and large-scale problems associated with modern times: an ageing population, environmental degradation and quality of life in highly populated urban areas. Many have argued that the value of digital technologies is best demonstrated in such large-scale problems and likewise, that digital technologies are tools that may potentially address these problems in a meaningful way.

Relevant to Penang’s context is the usage of digital technologies by provincial or state governments, commonly branded as a smart city agenda. In China, for example, the city of Hangzhou uses an artificial intelligence dubbed the “City Brain” to manage traffic signals at 128 intersections based on data collected by camera systems and sensors across the city. The outcome: travel times for ambulances and commuters are halved, while travel times on highways are reduced by 4.6 minutes.5

In Barcelona, bus users are benefitting from digital solutions through more reliable services, information updates at bus stops and simplified ticketing, offering a reliable alternative to cars.

More ambitious in Singapore is the National Digital Identity project that seeks to establish a secure platform where Singaporean residents and businesses can transact digitally with the government and private sector: no more repetitive form-filling and taking half-days off to complete a 15-minute transaction at government offices.

Crafting a digital transformation agenda for Penang will not be an easy task. Much has to be done to prepare Penang for the digital future, from equipping schooling children with the right set of skills, to encouraging businesses and the government to adopt digital transformation, not computerisation.

In many ways, the Penang government has also taken considerable steps forward in deploying digital technologies under its smart city agenda. The buzz of late is Penang’s facial recognition CCTVs that are aimed at reducing crime. Touted as the first in Malaysia, State Housing, Local Government, Town and Rural Development Committee chairman Jagdeep Singh Deo stresses that the technology presents a shift from post-event crime investigation to predicting crime through behavioural patterns that are established with the help of algorithms and data collected from the CCTVs.

Another initiative is the Penang Alert platform6 which functions as a trusted real-time information sharing centre for disasters such as floods, and storm warnings and road closures. To further enhance the platform’s functionality, Jagdeep says that data from GPS navigation app, Waze, can also be included into the platform.

On top of that, the Penang Intelligent Traffic and Transport System (PiTTS),7 in partnership with Rapid Penang, aims to ease traffic conditions by supplementing commuters with current locations of buses, traffic updates and a channel for complaints.

All that said and done, the question remains as to whether Penangites are really benefiting from such initiatives in their daily lives. Smart city solutions, after all, are at its core about developing a more citizen-focused form of participative democracy – the idea that citizens can have a participatory and personalised experience with their surrounding institutions. Very easily, governments can fall into the technology push agenda when technology is purchased with poorly thought-out delivery outcomes, user design and weak project monitoring – more so given that technology is costly, involves incurring cost and is purchased using public funds.

Digital technologies are not a solution in themselves; rather, they are a tool. Processes and structures need to adapt and adjust to technology to be useful. Absent of this, digital technologies are merely expensive government décor at best; and at worst, irresponsible spending of public funds.

The same computerisation trap dynamics that businesses find themselves in are also at work in the government sphere. An app or an on-site digital display that tells the commuter how long to wait for the next bus is of no use if the bus is not there at said time. Rather, the true value in such an application lies in its ability to aggregate useful data which then feeds into re-designing reliable bus services for the public – a process change, and not the mere adoption of technology; digital transformation, not computerisation.

To be fair, digital transformation within the government is no walk in the park. Governments are legacy behemoths that have never really needed to change, what more in their processes.

Fortunately – and ironically enough – governments also realise this. It is no surprise then that governments that are serious about digital transformation arrive at the same needs-assessment: a dedicated outfit with a clear and strong mandate to drive digital transformation. Singapore for example has the Smart Nation and Digital Government Office under the Prime Minister’s Office; while the UK has the Government Digital Service in its Cabinet Office. Over in Sarawak, the state government has similarly already established the Sarawak Multimedia Authority and Sarawak Digital Economy Corporation – the former tasked with decision-making while the latter with implementation. In Penang, the right conversations are seen by the state government to have already taken place. In his New Year’s Day message, Chief Minister Chow Kon Yeow announced that a new Digital Transformation portfolio will be created under the Chief Minister’s Office.8 Additionally, a unit called Digital Penang will also be set up, says Chow in his speech at the launch of MONITOR G5’s new Asean headquarters in Straits Quay last April.9

Crafting a digital transformation agenda for Penang will not be an easy task. Much has to be done to prepare Penang for the digital future, from equipping schooling children with the right set of skills, to encouraging businesses and the government to adopt digital transformation, not computerisation. Certainly, there are other aspects of the digital transformation agenda that are equally as important: innovation, digital-ready industrial parks, entrepreneurship and more.

Penang needs to have a clear digital direction in order to leverage on the benefits of a digital era, or risk being left out. It is no longer about positioning Penang in Malaysia, but positioning Penang against other advanced cities – regionally and globally.

Timothy Choy is a senior analyst at Penang Institute currently drafting the Penang Digital Transformation Master Plan.

1https://www.imf.org/external/pubs/ft/fandd/2018/06/impact-of-digital-technology-on-economic-growth/muhleisen.htm.
2Grace, K., Salvatier, J., Dafoe, Allan., Zhang, B., Evans, O. (2018, 3 May). When Will AI Exceed Human Performance? Evidence from AI Experts.
3McKinsey Global Institute (2017, December). Jobs Lost, Jobs Gained: Workforce Transitions in a Time of Automation.
4SME Corp and Huawei (2018). Accelerating Malaysian Digital SMEs: Escaping the Computerisation Trap.
5https://govinsider.asia/security/five-chinese-smart-cities-leading-way/.
6Also available as mobile app.
7Ibid.
8https://www.thestar.com.my/metro/metro-news/2019/01/01/preparing-penang-for-digital-age-one-mugshot/.
9https://www.theedgemarkets.com/article/penang-plans-digital-penang-unit-keep-pace-technology.



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