Pikom: Average salary growth in ICT industry to moderate this year in Malaysia
The average salary growth rate in the information and communications technology (ICT) is expected to moderate further to 3.8 per cent in 2019 in line with the lukewarm expansion of the industry in the last few years, said the National ICT Association of Malaysia (Pikom).
Its organising chair of the research and publication committee Woon Tai Hai said, salaries in the ICT industry grew at the slowest pace this decade.
“The overall average monthly salary in 2018 only four per cent higher than the previous year and significantly below the average annual growth rate (AAGR) of 6.7 per cent over the nine-year period of 2009-2018.
“The slowdown in salary growth reflects the tepid expansion of the ICT industry, whose share of Gross Domestic Product (GDP) increased by only 0.1 percentage point to 18.3 per cent in 2017,” he said in a statement in conjunction with the launch of ICT Job Market Outlook In Malaysia 2019.
However, the demand for ICT jobs he said remained healthy, but employers seem to be more discerning in their employment choices with job providers in 2018 appear to be more conservative in their remuneration and at the same time more demanding in terms of experience and specific skill set.
Jobs is still growing but at specific areas such as fourth industrial revolution (4IR) and Internet of Things (IoT), he explained.
He commented that the declining growth trends of both salaries and job openings are likely a response to the recalibration of the economy following last year’s change of government, resulting in employers taking on a more cautious and wait-and-see attitude.
Meanwhile, Pikom’s chairman Ganesh Kumar Bangah foresees a moderate improvement in this year’s Gross Domestic Products (GDP) with most projections by domestic and international agencies falling within the 4.3 per cent to 4.8 per cent range.
“On the positive side, we expect an economic rebound in the second half of 2020. It is hopeful that government spending would restart to spur the economy. Then the IT economy would grow together with other economy,” said Ganesh.
The Malaysian economy he expected would experience a turn around by mid-2020 with the government’s newly introduced initiatives and programmes beginning to bear fruit.
The government according to him is also focussing its attention to the 4IR (Fourth Industrial Revolution), Industry4WRD, robotics, analytics and Artificial Intelligence as the enablers of the country’s future economy.
“There is definitely light at the end of this tunnel, and the encouraging news is that many of our economic indicators such as employment, domestic investment, inflation, interest rates and exports are still healthy. However, we must not rest on our laurels as global factors are beyond our control,” he added. ― Bernama
ICT Industry Outlook in Malaysia 2019
The ICT Industry in Malaysia continues to grow in size and distribution to the economy, albeit at a pace slower than the desired rate to reach 20.0% of national gross domestic product (GDP) by 2020.
As reported in PIKOM’s ICT Strategic Review 2018/2019 published in November 2018, the industry grew by 10.3% year-on-year in 2017 to contribute RM247.1 billion or 18.3% to the national economy. However, this was a mere increase of 0.1 percentage points over the 18.2% share of GDP in 2016.
At this stage, it should be noted that the 11th Malaysia Plan has envisaged a growth rate of at least 17.0% per annum from 2016 – 2020 in order for the industry’s GDP contribution to reach the 20.0% milestone.
Given the prevailing rate of growth, PIKOM had previously expressed doubts the industry could achieve 19.0% of the national economy by 2018. According to PIKOM’s projections, this figure should reach 18.6% in 2018, 18.8% in 2019 and potentially pass the 20.0% milestone only in 2022.
It is interesting to note that research house IDC expects the industry to account for 21.0% of GDP by 2022. Nevertheless, any slowdown in the growth rate in recent times is expected to be arrested with the latest moves to develop Malaysia as a digital nation powered by Industry4RWD or smart manufacturing, the internet of things (IoT), blockchain, cloud computing and artificial intelligence. The latest developments in these areas are discussed later on this section.
Size of ICT Industry 2018
The Department of Statistics Malaysia’s (DOSM) ICT Satellite Account reported the value of ICT’s contribution to GDP at RM247.1 billion, comprised of ICT-GDP of RM178.2 billion and non-ICT industry e-commerce of RM68.9 billion. (See Table 1)
The ICT-GDP is the sum total of contributions by the various industry segments: ICT services; ICT Manufacturing; ICT Trade; and Content & Media while non-ICT industry e-commerce takes into account the value of retail e-commerce and B2B transactions in other industries.
- ICT-GDP by Industry Segments
ICT-GDP increased by 8.4% to RM178.2 billion from Rm164.4 billion in 2016. Chart 1 shows the value of the industry segments from 2010 to 2017. Chart 2 depicts the shar of contribution to ICT-GDP by the respective industry segments in 2017.
The e-commerce gross value added grew by 14.3% to RM95.8 billion in 2017 from RM75.0billion in 2016, with non-ICT industry e-commerce the main contributor at RM68.9 billion. (See Chart 3)
- Employment in ICT Industry
The number of employees in the ICT industry grew by almost 2.0% from 1.07 million in 2016 to 1.09 million in 2017. ICT workers are those working in the four ICT-producing industries: ICT Services; ICT Manufacturing; ICT Trade; and Content and Media.
ICT Manufacturing employed the most people at 411,000, representing more than a third of the total ICT workforce. This was followed by ICT Services with 301,000, ICT Trade with 224,000 and Content and Media with 155,000. (See Chart 4 and Chart 5)