Pit Stop on Penang’s Digital Journey

By Digital Penang

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THE STATE’S DIGITAL arm, Digital Penang (DP), was established last April with the twin missions of capturing opportunities in the new economy and upgrading liveability through digital engagement. Under the Vision’s core pillars of Governance, Economy, Community and Infrastructure; and in partnership with local and federal agencies, private sector, entrepreneurs and universities, strategic initiatives have been singularly aligned to build for Penang a sustainable digital ecosystem.

Economic Relevance in the Digital Future

Most of 2021 for DP has been focused on the Digital Economy pillar and its three main themes: To encourage local enterprises to go digital and international, develop the tech startup ecosystem and attract investments from digital companies for the next adjacent sector to leverage Penang’s tech and engineering prowess.

While tourism has floundered, the state’s electrical and electronics (E&E) manufacturing industry continues to be a solid backbone. But it is not without Covid-induced challenges. Competition for participation in the global supply chain has tightened between Penang and Central Klang Valley, Johor and more recently, Sarawak; and with countries like Vietnam and Indonesia with their offerings of low-cost labour and land.

Penang SME Go Digital Campaign was launched to provide support for MSMEs to sell online.

Against this backdrop, it is becoming increasingly clear that Penang needs to diversify, broaden and restructure its economy into the digital services and software sector.

MSMEs Go Digital

Micro, Small and Medium Enterprises (MSMEs) for the past two years have been forced onto the virtual terrain. But encumbered by their size, many have struggled to scale. Together with partners, DP aims to promote awareness and encourage digitalisation for these enterprises to go international.

The key sectors of manufacturing, logistics, tourism, medical, food production, retail and construction have been identified for digital adoption. However, this will take time and will be driven largely by market competition.

DP’s policies and programmes are based on the economic principle that markets and industries will tend towards efficiency. As such, intervention programmes are primarily to incubate and stimulate markets towards staying internationally relevant and competitive. Under the #DahDigital programme for MSMEs, classes on digital marketing and establishing a website and e-commerce stall are delivered by Digital Coaches to encourage MSMEs to sell online. To date, 20 of such classes have been conducted for over 800 MSMEs.

Creative Digital District (CD²) @ George Town

Pioneers like Yeap Chor Ee, Loh Boon Siew and the Sarkies Brothers helped to shape Penang’s enduring entrepreneurial tradition; and sustaining it today are local engineering behemoths, including Globetronics Technology, Inari Technology, Pentamaster Corporation, Greatech Technology and ViTrox Technologies. The latter three are profiled in DP’s debut publication, Founders' Grit: Inspiring Life Stories of Engineering and Technology Entrepreneurs in Penang (Penang Institute Publications, 2021), to recognise their contributions to the ecosystem and to serve as inspiration for future generations of aspiring entrepreneurs.

Much of the success in high-tech manufacturing is attributable to the foresight exercised in attracting key multinational anchors during the formative years of the Bayan Lepas Free Trade Zone. For the local software tech startup ecosystem to thrive as well, Penang will need to attract digital beacons. Time and momentum may have been lost in lockdown, but the underlying talent and ambition is latent, present and ready to capture exciting opportunities ahead. DP’s strategy and focus are to forge a tripartite partnership between academia, industry and government, to welcome players to build the ecosystem and strengthen its structures with access to money, mentors and markets.

During the launch of the Digital Transportation Masterplan at Digital Penang's office at Wisma Yeap Chor Ee.

An important place-making initiative under the Penang2030 vision is to develop around the Wisma Yeap Chor Ee locale, a city-campus digital district. The Creative Digital District @ George Town (or CD²@GeorgeTown for short) hopes to create a vibrant and energetic talent community juxtaposed against a rich heritage setting, and to attract digital investments via specific programmes. Players like Draper Startup House, Beyond4, MBAN, 1337Ventures have committed to move into the district, joining Wawasan Open University’s School of Digital Technology, Facebook, Think City, USM.Create and Forward School as part of the CD²Sandbox.

In 2022, to spur on entrepreneurs and find Penang’s digital unicorn, DP will be working towards creating a matching seed capital fund with industry partners, while also raising capital among the private sector to match Federal-led venture capital fund.

A Digital Chain Reaction

Lifting digital literacy, bridging the digital divide and driving app adoption are all efforts to bring everyone along on Penang’s digitalisation journey. When the community opts for e-payments for example, markets are created for entrepreneurs to innovate even more digital services.

The #DahDigital programme, launched during the pandemic, was partly to create jobs for part-timers and freelancers to supplement their incomes. A total of 100 Digital Promoters were hired on a part-time basis to visit wet markets and public hawker centres around Penang to socialise the use of e-wallets; the initiative reached 42,000 people within 12 months.

Another 20 Digital Coaches were onboarded to work with NGOs such as the Penang Seniors Digital Resource Centre. Physical classes on the use of online banking, eWallets and eHailing were held in about 20 constituencies, and in multiple languages and dialects. When these were taken online during lockdown, a drop in participation was inevitable since the target learners weren’t digitally savvy to begin with. But on the whole, the programme was well received, with 120 classes conducted so far benefitting 1,300 participants.

In collaboration with PgCare Alliance, DP will also be launching #DahDerma, a trusted platform to digitalise fundraising among NGOs in the coming months.

Digital Infrastructure Woes

A #DahDigital class conducted at the Penang Seniors Digital Resource Centre last November.

To go digital, an urgent prerequisite is a robust Telco infrastructure for quality internet connectivity. But the timeline by Digital Nasional Berhad will only see 5G made available to Penang in late 2023, to say nothing of how the pandemic has aggravated the already fragile bandwidth and quality of telecommunications in the country. DP is thus pushing for a testbed in CD²Sandbox in time for the World Congress IT (WCIT) in September 2022.

Accelerating the Digital Journey

In the foundation phase of Penang’s digital transformation, the priority is two-prong. First, to leverage the local engineering talent in identifying potential adjacent high-growth sectors. An area of interest is the development of a space tech sector by the startup AngkasaX. It hopes to tap into the expertise of Universiti Sains Malaysia’s School of Aerospace, as well as that of the E&E manufacturing ecosystem to launch low-earthorbit (LEO) satellites; this will create a constellation and mesh over ASEAN for internet access and services to reach the vast rural geography.

Second, to attract strategic digital investors in advance green data centres, internet exchanges and 5G connectivity to serve the Northern Economic Corridor. This is especially crucial for building the complementary ICT sector to support increasing demand in software engineering skills for Industrial Revolution 4.0. Penang is well positioned to develop and deepen its ecosystem in Artificial Intelligence (AI) at the intersection of hardware and software, given the companies it has which specialise in vision analytics, AI chip design, robotics, machine automation; and in software apps such as robo-advisor, robo-auditors, metaverse, etc.

A recently held Zoom class on “Communicate Effectively Online”, under the #DahDigital programme.

DP’s focus for the next year will be on Digital Governance, specifically in defining the SmartCity framework for CD²@Georgetown, a brownfield site with many heritage constraints. Such SmartCity projects will be a testbed to attract innovative foreign and local companies to invest, pilot and find solutions regarding challenges in urban mobility, carbon footprint, smart services, etc. The experiences gained will form the launchpad for exporting lessons to similar heritage cities in the region.

In sum, since the pandemic may have slowed the progress of some of the initiatives, Penang’s digitalisation journey must now be swiftly accelerated for the state to remain competitive and relevant, and especially, for the developing of its digital talent.

Digital Penang