Insufficient IT expertise in Japan

According to the "Survey on IT expertise Supply and Demand," research report released in March 2019 by Japan's Ministry of Economy, Trade, and Industry, it suggests that there will be a shortage of approximately 790,000 IT expertise by 2030.

It states that "IT expertise is responsible for strengthening the competitiveness of Japan's IT industry, advanced utilization of IT, as well as development of digital businesses. Particularly, in securing IT talent who can use AI and Big Data in contributing to productivity improvements through creation of value-added and innovative methods as leaders of new businesses in response to the 4th industrial revolution” in the report, with emphasis on acquiring IT expertise in supporting Japan’s industries.

On top of that, the outbreak of Coronavirus from 2020 has affected many businesses, firms, and lifestyles. The increasing need for remote work and digitalization are shaping existing business work styles. The outbreak of covid caused a strained on the already existing limited IT resources in Japan, making it necessary for IT utilization. Even large enterprises who could afford flexibility among workforce are now increasingly turning to overseas engineers to secure necessary IT expertise.

In terms of offshore development abroad, the conventional primary objective of offshore development was mostly on “cost reduction” against the background of wage gap differences between Japan and developing countries. However, there is a stronger trend in “acquisition of IT resources”, “Digital transformation” and “Incorporation of new business” as the primary objective in 2021.So, the question is, what is Malaysia’s potential as a candidate country for foreign offshore developments?
 

Malaysia transcends Japan in digital competitiveness

In 1996, during Prime Minister Mahathir’s administration, the national project “Multimedia Super Corridor (MSC)” was introduced, starting the nurturing efforts of IT expertise in Malaysia. The Digital Economy Corporation (MDEC) has played a central role in developing an ecosystem for fostering IT expertise through collaboration between industry, government, and academia. As of 2021, after 25 years since establishment, MDEC has managed to put Malaysia on the 27th rank on the Global Digital Competitiveness Ranking 2021. This digital competitiveness ranking evaluates the digital economy and digital technology capabilities of 64 major countries and regions as key drivers of economic transformation in business, government and society.
Japan was ranked 26th, which means that Malaysia is catching up vastly, and is now more digitally competitive than Japan, as it was the previous year. (source：World Digital Competitiveness Ranking 2021 )
The country's efforts over the past 25 years in nurturing IT experts, development of infrastructure, and improvement of the literacy rate and technological skills of its people are factors that have contributed to its high ranking. There has been an increase in products and cases that are utilizing state-of-the art technology such as AI, IoT, blockchain, AR/VR recently.  

Digital competitiveness demonstrated during covid pandemic

During the covid outbreak, the Malaysia government was quick on its feet in developing the smartphone app,“mysejahtera”, with functionality of movement tracker, check in upon entrance into shops and restaurants, vaccine registration and management, each added one after the other in one single app.