Malaysia emerging as key hub in Asean’s digital future

Driven by rapid digital adoption and increasing foreign investments, Asean is one of the world’s fastest-growing technology markets. The World Economic Forum projects that the region’s digital economy will grow from US$300 billion to an estimated US$1 trillion over the next decade.

Malaysia boasts one of the highest mobile phone and internet adoption rates of the Association of Southeast Asian Nations’ major economies, with the digital economy contributing to nearly a quarter of the country’s GDP. Those strong foundations, as well as its strategic location and skilled multicultural workforce, have helped the country become a magnet for foreign direct investment (FDI).

Led by the services industry and followed by the information and communication sector, inbound foreign investment in 2024 totalled 170.4 billion Malaysian ringgit (US$38 billion), with the US, Germany, China and Singapore accounting for more than 70 per cent of the total.

Notably, supportive initiatives such as the Malaysia Digital Economy Blueprint, which aims to position Malaysia as a regional leader in the digital economy by 2030, have placed technology and innovation at the core of the nation’s socio-economic transformation.

In 2023, tech giants Microsoft and Amazon announced multibillion-dollar investments to advance their cloud services infrastructure. Separately, Alibaba Cloud has supported digitalisation across Malaysia’s logistics, automotive and financial services industries, while Huawei has emerged as a potential partner for building Malaysia’s second 5G network.

With its digital transformation, Malaysia is well placed to navigate economic and geopolitical uncertainties. Indeed, the nation’s priorities include Asean economic integration, trade diversification and the alignment of digital policy as a means of maximising regional opportunity and increasing economic resilience against tariff threats or supply chain issues.