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Melaka ICT Strategic Blueprint

31 December 2005
“The future never just happened; It was created”

Will and Ariel Durant


- The lessons in history

1
A note to the user of this document
This report contains 4 primary sections in 8 different chapters. The “Chapter Guide” as shown below is used
throughout the report to guide readers to understand the report better. The “Chapter Guide” has also been mapped
to the Terms of Reference (TOR) of the study

Chapters Chapter Chapter Chapters Chapter


1&2 3 4 5, 6 & 7 8

1 2 3 4 5 6 7 8 9 10 11 12

Terms of Reference
1. To study and analyze existing foundations and strategies in the ICT Sector in Melaka
2. Gauge and review the effectiveness of project/program implemented in the ICT Sector
3. To identify primary issues impeding the implementation of planned strategies/projects/programs and to
recommend actions to address issues identified
4. To recommend directions, foundations, strategies, projects and programs to plan and manage the Melaka ICT
Sector to be more competitive
5. To improve the ICT infrastructure and infostructure
6. To increase the production of ICT skills and experties
7. To reduce the digital divide between urban and rural populations
8. To increase the application and commercialization of ICT
9. To stimulate entrepreneurship activities in the field of ICT
10. To create a monitoring mechanism for ICT implementation in Melaka
11. To benchmark the Melaka ICT Sector against other develop state and nations
12. To study the impact of the global economic climate on the Melaka ICT Sector and recommend strategies or
actions necessary to increase competitiveness and sustainability
2
Table of Contents

ACKNOWLEDGEMENT …………………………………………………………………………. 4

EXECUTIVE SUMMARY …………………………………………………………………………. 6

1 INTRODUCTION ……………………………………………………………………………..32

2 CURRENT STATE ANALYSIS ………………………………………………………… 45

3 ISSUES & CHALLENGES ………………………………………………………………… 56

4 SETTING THE DIRECTION …………………………………………………….…….. 66

5 THE ICT STRATEGIC FRAMEWORK ………………………………………………. 96

6 PROGRAMS & PROJECTS ……………………………………………………………. 101

7 IMPLEMENTATION TIMELINE …………………………………………………….. 119

8 CONCLUSION ………………………………………………………………………………. 121

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Melaka ICT Strategic Blueprint

ACKNOWLEDGEMENT
Acknowledgement

During the course of the study, we have been privileged to have had the
opportunity to discuss, deliberate and debate with distinguish stakeholders and
key players pertaining to various challenges facing the State as well as to
identify means of unlocking relevant touch points pertinent to the State’s ICT
sector to realize its full potential.
In this regard, we hereby gratefully acknowledge the invaluable contributions
from the parties involved which have ensured the success of this study. We
would also like to record our special thanks to Encik Zainal Husin, the Director
of the State Economic Planning Unit (UPEN) for his guidance and wisdom in
championing this project.
Our deepest and sincere appreciation also goes to members of the Melaka
Cybercentre Secretariat at UPEN for their dedication and commitment to this
project. Special mention goes to Dr. Mohd Haflah Piei, Encik Abul Khair Yahya,
En Mohd. Hamin Talib, Dr. Noraini Baba and En. Ismail Lajen for their
enlightening ideas, thought process and references.
We would also like to thank the entire Melaka State Government IT Commitee
who have significantly contributed to the development of this report. Your
valuable contributions are a significant step towards realizing Melaka’s vision to
“Recapture past glory through rapid advancement in knowledge and ICT towards
a fully developed K-State”.

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Melaka ICT Strategic Blueprint

EXECUTIVE SUMMARY
EXECUTIVE SUMMARY:
Current State Analysis

High Readiness:
• Ready infrastructure – satisfactory Low Readiness:
internet/access points
• Most businesses not ICT enabled
• Initiated a reasonable number of
good programs & community • Mainly internal process driven
involvements • No real collaboration/sharing
COMMUNITY PRIVATE
• High internet penetration SECTOR SECTOR

• High ICT literacy Comprises:

• High PC penetration • Manufacturing


PUBLIC
SECTOR • Services
Comprises:
• Students, Working Population,
Housewives & Retirees
• Rural & Urban
• Young & Old

Medium Readiness:
Comprises:
• Growing investment in ICT
• State Govt Admin Office
• Good back end systems / connectivity
• District & Land Offices
• District Local Councils • Projects not integrated (Pockets of initiatives)

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EXECUTIVE SUMMARY:
Tourism and Manufacturing driving Melaka’s GDP

Construction 2.8% ‰ GDP equivalent to 3% of Malaysian


Agriculture 3.9% economy
Mining 0.1%
‰ GDP growth faster than Malaysian
economy
Other Services 37%
‰ GDP per Capita higher than
3%4% •Private health services is national average
thriving in Melaka. Indonesian
patients visit Melaka’s private ‰ Tertiary sector is the biggest
28% hospitals due to its cost sector & driver of growth.
competitiveness. Doctor to
patient ratio is one of the highest
65% in the nation
‰ 65% of Melaka’s GDP contributed
by the services sector growing at
Tourism 28% approximately 10% per annum from
2002 to 2004
•28% of Melaka
economy is derived from
tourism
•1 in every 4 of tourists
to Malaysia visits
Melaka.
Manufacturing 28%

•Manufacturing contributes 28% of the


economy.

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EXECUTIVE SUMMARY:
Melaka – desirable business environment
• Among the lowest SAIDI Index for electricity in Malaysia which shows strong
stability in power supply
• Melaka offers higher quality of life compared to the Malaysian average

INDICATORS YEAR MALAYSIA MELAKA


• SAIDI Index (projected) 2004 111.4 74.2

• No of hospital bed per 100,000 population 2003 177.6 220.5

• Population per doctor 2003 1,377 1,138

• Population per dentist 2003 10,399 7,898

• No of post offices per 100,000 population 2002 2.5 3.4

• Road Development Index 2004 0.22 1.09

• Fixed telephone line per 1,000 population 2004 189.5 209.7

• Air Quality Index 2004 40 49

• Crime per 1,000 population 2004 6.1 4.6

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EXECUTIVE SUMMARY:
Manufacturing sector growth not impressive of late
Net FDI Inflow
(USD Billions)
60.0

50.0

40.0

30.0

20.0

10.0

0.0
1990 1995 2000 2001 2002 2003
-10.0
China India Malaysia Singapore
Source: Database of UNCTD, 2005
• Growth of FDI Inflow to Malaysia fueled by the manufacturing shown signs of weakening
• Recent development has seen China as world largest FDI recipient (specifically in
manufacturing and E&E) due to its significant cost advantages
• Malaysia will find it difficult to attract new sizeable investments in manufacturing and
will need to move to higher value add activities to maintain growth
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EXECUTIVE SUMMARY:
Tourism Sector yet to fully leverage on ICT potential

‰ The Tourism Industry in Melaka is one of the largest contributor to the state GDP (28%
of GDP - RM3.4 bil) – Malaysia’s Tourism revenue stands at RM29.7 billion in 2004
‰ 4 mil tourists visits Melaka annually (i.e. 1 in 4 tourists to Malaysia) - 75% of tourists
are domestic travelers - Significant number of tourists are day-travelers which
resulted in Melaka inability to secure tourism revenues proportionate to the number
of tourist arrivals (potential: RM7.4 billion)
‰ Malaysian suppliers generally slow to exploit potential of E-Commerce.
ƒ Static web presence widespread, but limited in content.
ƒ Little “E-Enablement” or integration into operational systems.
ƒ On-line products are generally point-to-point air tickets, hotel rooms only
booking etc.
‰ In Canada, online booking represent one-third of all travel spending while 60% of
travelers uses internet for pre-travel research (Malaysia: 14.7%) - Currently, many
tourist information websites are available on Melaka but none of these websites
posses e-commerce transaction capabilities and are mostly non-interactive types.
‰ (PhocusWright, 2002) Tourists from North America and Europe recorded high online
travel bookings (>60% of world online travel), an are where Melaka Tourism Sector
should exploit
‰ Higher foreign travelers, higher average length of stay and higher tourist spending is
possible if the state’s Tourism Sector leverages on the power of ICT

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EXECUTIVE SUMMARY:
Interpreting the Vision

Core Values
Core Purpose
Rich in heritage
• Economic growth - ICT to accelerate growth of Melaka Service oriented
(as a sector & enabler) Progressive & dynamic
• Bridging the digital divide - Make ICT education Progress with Quality of Life
accessible & affordable to all citizens of Melaka
• Wealth creation - Utilization of Knowledge and ICT to
increase the wealth of citizens of Melaka

ICT VISION
“Recapture past glory through
rapid advancement in knowledge
and ICT towards a fully developed
K-State”
Envisioned Future
• ICT as an important sector in Melaka economy
• ICT as the recognized enabler for Melaka economic
sectors
• A developed state with balanced spiritual and
physical development
• K-Society
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EXECUTIVE SUMMARY:
Overview of the Strategic ICT Framework
Recapture past glory through rapid advancement in knowledge and ICT
towards a fully developed K-State

Strategic Direction 1 Strategic Direction 2 Strategic Direction 3

Increase economic Develop Knowledge-


Create a Client-Friendly
wealth by focusing on Based Society & Develop
Government
high growth sectors Responsive Skill Base

Strategic Actions Strategic Actions Strategic Actions


Strategic Enabler 1
Develop and nurture high Enhance infrastructure to Making the Government
ICT Infrastructure & growth sectors to drive improve information more efficient,
Infostructure towards 2010 dissemination/availability transparent and
accessible to its clients
Maximize economic Create ICT awareness and using the power of ICT
Strategic Enabler 2 potential of high growth cultivate interest in
sectors using ICT knowledge and ICT Support transition to
electronic government
Education & skills Promote conducive Develop or expand environment through
environment to human capital through retraining and change
encourage higher value- targeted knowledge and management programs
add activities skills development
Strategic Enabler 3
Instill commercially
Build partnerships with Create incentives to oriented customer
Entrepreneurship relevant organizations encourage partnership relationship management
and align policies and between IHLs, R&D processes and culture in
incentives centres and the industry the government

Strategic Enabler 4 Gradually reduce


dependency on
traditional economic
Market Relationships
drivers

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EXECUTIVE SUMMARY:
Strategic Direction I: Focusing on High Growth Sector

Program 2
Program 2
Attract
AttractSSO
SSOFirms
Firms

Program 1 Program
Program33
Program 1
Tourism
TourismPromotion Tourism
Promotion TourismContent
Content
Portal Development
Portal Development

Strategic Direction 1
Strategic Direction 1
Increase economic
Increase economic
wealth by focusing on
wealth by focusing on
high growth sectors
high growth sectors Program 4
Program Program 4
Program66 Re-position
Biotechnology Re-position
Biotechnology&& Health/Education
Bioinformatics Health/Education
Bioinformatics Tourism
Tourism

Program
Program55
Partnerships
Partnershipsfor
for
Organized Growth
Organized Growth

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EXECUTIVE SUMMARY:
SD-1 Program: Tourism Promotion Portal
INITIATIVE
• To upgrade and unify current tourism related websites in Melaka under one
comprehensive tourism portal sponsored initially by the State Government –
portal may be handed over to the private sector once critical mass is achieved
• To provide opportunities for small and medium players in the Melaka Tourism
Sector to offer their offerings on the internet E
• To facilitate electronic purchase of tourism products in Melaka

RATIONALE

• At present, the current portal is static and non-interactive. Tourists should be able to do
everything on the internet from booking flight to booking hotel rooms to finding information
about in-city transportation to operating hours of tourist spots.
• Electronic purchase over the internet can be stimulated if it is fully backed by a trusted party the
such as the State Government
• A State Government backed portal will make it financially feasible for small to medium tourism
product supplier to market their product electronically

POTENTIAL BENEFITS

• Exposing the local tourism sector to more tourists specifically from developed nations with higher
spending power
• 40%-60% boost to tourism earnings in the State above the existing growth pattern – estimated
increase of RM1.3 billion to RM2.0 billion of GDP per annum

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EXECUTIVE SUMMARY:
SD-1 Program: Attract SSO Firms
INITIATIVE
• To attract Shared Services Outsourcing Firms to choose Hang Tuah Jaya as the
preferred centre of operations

RATIONALE E

• Melaka’s position in between the Klang Valley and Singapore makes it an attractive location for
SSO Firms
• The creation of a Cybercentre in Melaka will enable Melaka create the ideal business environment
(high quality infrastructures and performance guarantees) which is conducive to SSO business
• Melaka posses the right balance of hard and soft infrastructures with reasonably high quality of
life to attract SSO businesses
• Currently, Singapore Telecom is using Melaka for its SSO due to its cost advantage and various
factors conducive to the SSO business

POTENTIAL BENEFITS

• Creation of employments for 10,000 to 15,000 knowledge-workers


• Attracting high quality telecommunications and other business related infrastructures which will
contribute towards creating the critical mass to enable comprehensive rollout of broadband in the
State
• Generating consistent and assured income for the state and boosting the State’s GDP by RM1 –RM2
billion per annum
• The influx of k-workers will also create a positive impact to other sectors of the local economy to
further boost the local service sector
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EXECUTIVE SUMMARY:
SD-1 Program: Tourism Content Development
INITIATIVE
• To develop a Tourism/Culture/Multimedia Content Industry through
involvement from the Government, IHLs and local technopreneurs serving the
Melaka tourism sector.

E
RATIONALE
• Melaka possess the right mix of IHLs to support a Tourism/Culture/Multimedia Content Industry
• Virtual tours, clips and scenes will be developed using existing archives and scriptures. Output
from the Content Industry will then serve to increase the quality of tourism products (e.g.
museums, zoos, tourist parks, etc) and attract nurture more interest and boost revenues from the
tourism sector.
• As content will be required to be continuously updated, a steady stream of income will be
generated to create a sustainable growth to the proposed Content Industry and attract more
technopreneurs to participate and locate their operations in Melaka

POTENTIAL BENEFITS

• Contributing towards making Melaka a more “event tourism” oriented from the existing “place
tourism” oriented. This will encourage more repeat visits by tourists and further boost income
and growth of the local tourism sector
• Creating Melaka’s own Content Industry generating up to RM500 million demand in the local
economy
• Encourage the creation of critical mass in the Content Sector which will ultimately grow beyond
serving the local tourism sector

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EXECUTIVE SUMMARY:
SD-1 Program: Re-position Health/Education Tourism
INITIATIVE
• To collaborate with the Health and Education sectors and review/reposition
offerings on Health and Education Tourism around suitable niche within each
sector (e.g. Education Tourism to focus on tourism management, Hotel
catering, public relations, multimedia content development, etc. while Health
Tourism to focus on Cardilogy, Cancer, etc) E
• Including the re-packaged Health and Tourism sector products on the Central
Tourism Portal initiative highlighted under SD-1

RATIONALE
• Currently each health/education tourism sector is promoting itself in isolation without specific
focus. Both sector needs to be repositioned and strengthen in specific niche areas to create a
clearer market positioning to their clients and attract more high value clients
• Melaka needs to ensure that the market it carves for itself in both sectors are sustainable. A
clear market strategy which involves specific niche and focus areas will make Melaka more
attractive to potential clients while at the same time ensures that investments made in marketing
reap maximum returns. Carving the right niche and focus areas may also reduce effect of
competing and similar sectors in neighboring nations

POTENTIAL BENEFITS

• Advertising and promotion cost would be reduced as it is shared between the health/education
and the tourism sectors
• Stronger brand as Melaka places herself in a niche specialized market

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EXECUTIVE SUMMARY:
SD-1 Program: Partnerships for Organized Growth
INITIATIVE
• To create partnerships with commercial and IHL organizations to ensure that
other sectors of the economy grows in tandem with the demand created by
key focus sectors.

RATIONALE E

• Requirement of knowledge workers and technology companies such as higher quality housing,
entertainment, office space and etc can be developed to further improve the commercial
attractiveness of the state for business relocations and as centre of operations
• Demand generated resulting from the expansion of focus sectors (tourism, ICT and biotechnology
sectors) can be anticipated and met to encourage a higher yet more balanced growth in the local
economy

POTENTIAL BENEFITS

• Increase commercial attractiveness of the Melaka State to SSO Organizations, Technology


Companies and Knowledge Workers
• Facilitate a balanced growth in other sectors of the economy such as properties, construction,
education and services

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EXECUTIVE SUMMARY:
SD-1 Program: Biotechnology & Bioinformatics
INITIATIVE
• Focus on biotechnology and encourage the use ICT to maximize potential. Set
up database centre for biotech & bioinformatics
• personalized medicine & healthcare
• traditional herbal medicinal plants
• cataloging DNA marker technology for herbal & traditional medicine E
• database screening for anti cancer

RATIONALE

• Growth of biotechnology sector estimated to average from 12% to 17% annually will further boost
the State’s GDP
• Biotechnology and bioinformatics sector is expected to be the leading growth sector in the world
economy by 2030 and will continue to lead for a century to come

POTENTIAL BENEFITS

• Improved processes of biotech product, with spillover effect of improving cottage industries, e.g.:
higher quality and longer lasting cencaluk, dodol and gula melaka enabling bigger commercial
possibilities and higher profits
• Participate in the high growing Malaysian herbal sector (estimated at RM2 billion annually) which
is expected to grow to as large as RM13 billion by 2020

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EXECUTIVE SUMMARY:
Strategic Direction II: Developing K-Society and the
Necessary Skill Base

Program
Program11
Development
DevelopmentofofCritical
Critical
Mass
Mass

Strategic Direction 2
Strategic Direction 2
Develop Knowledge-
Develop Knowledge-
Based Society & Develop
Based Society & Develop
Responsive Skill Base
Responsive Skill Base

Program
Program44 Program
Program22
Aligning
AligningIHLs E-Melaka
IHLs E-Melaka

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EXECUTIVE SUMMARY:
SD-2 Program: Development of Critical Mass
INITIATIVE
• To develop critical mass of broadband users to encourage industry players to
rollout infrastructure at the last mile. For the State Government, this shall
involve connecting schools, IHLs, hospitals, government buildings, community
centers, shopping malls, mosque, libraries and etc
E

RATIONALE
• According to the National Broadband Plan, Malaysia has abundant availability of domestic
backbone capacity as compared to last mile broadband infrastructure – a critical mass (5%
connectivity) will encourage industry players to rollout infrastructure at the last mile
• Broadband is critical in the development of k-society, k-economy and the quest to be a developed
k-state:
• Pre-requisite for high-speed info-communications access
• New benchmark on national infrastructure and country competitiveness
• Support expansion of Multimedia Super Corridor (MSC) nationwide
• Facilitate the rollout of e-government and other flagship applications
• Potential for bridging the digital divide hence the knowledge divide

POTENTIAL BENEFITS
• Intervention by the State Government (i.e. connecting Government agencies, schools, hospitals,
etc) in developing critical mass will assist telecommunications industry to rollout broadband
widely within the State and help in the efforts to develop a k-society in Melaka

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EXECUTIVE SUMMARY:
SD-2 Program: e-Melaka
INITIATIVE
• To persist and continue with e-Melaka program to connect communities and
increase ICT awareness specifically among rural populations and other
segment of the population which are not exposed to ICT development

RATIONALE
• In its effort to develop a k-society, community and awareness program such as e-Melaka is
important to ensure that
• ICT awareness campaigns are implemented for population segments that are still not exposed
to ICT development
• Promote the State Government’s efforts to leverage on ICT to be more transparent and more
customer friendly. This will ensure that more support can be gathered from the public - a
critical ingredient of success

POTENTIAL BENEFITS

• Increase visibility of the State Government efforts to the public and will help the Government to
gather support from the public to bridge the digital divide
• Act as a promotional campaign to inform the public of new developed e-Government applications
and improve the ability of the Government to deliver its services more efficiently and effectively

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EXECUTIVE SUMMARY:
SD-2 Program: Aligning IHLs
INITIATIVE
• To align IHLs in Melaka to offer more courses relevant to focus economic sectors
(i.e. tourism, ICT and biotechnology sectors)
• To encourage IHLs to get relevant accreditation from Lembaga Akreditasi Negara
(LAN) and be more attractive to both local and overseas students

RATIONALE
• As courses are recognized by LAN, IHLs will be more attractive to students, local and foreign.
• Currently, there are not many IHLs offering courses in the services industry and Melaka is able to
fill the niche

POTENTIAL BENEFITS

• Development of k-workers which are suitable and relevant to key economic sectors
• Creating an academic centre of excellence in the tourism and ICT sectors
• Foreign students will help generate income through long stay

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EXECUTIVE SUMMARY:
Strategic Direction III: Creating a “Client-Friendly”
Government

Program
Program11
Connecting
ConnectingPBTs/Depts
PBTs/Depts

Program Strategic Direction 3


Program44 Program
Customer
CustomerRelationship
Relationship Program22
Management Create a Client-Friendly Implement EG
Management Implement EG
Government

Program
Program33
Change
ChangeManagement
Management

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EXECUTIVE SUMMARY:
SD-3 Program: Connecting PBTs/Depts
INITIATIVE
• To connect PBTs and government departments to each other creating a web of
information
• Offering of services online

RATIONALE E

• Improve efficiency of processes by educating the public


• Improve transparency of government processes and preparing the government for the new k-
environment
• Providing the public with timely and accurate information to propel the local economy forward
and support growth of key economic sectors

POTENTIAL BENEFITS

• Reduced bureaucracy in Government processes and increase efficiency of government service


delivery
• Allow the State Government to focus on more strategic issue relating to developing sustainable
economic growth reduce time required to deal with issues resulting from operational ineficiencies

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EXECUTIVE SUMMARY:
SD-3 Program: Implement EG
INITIATIVE
• To fully implement electronic government at the State Government - the e-
Government programme aims at reinventing how the State Government works
and improve the quality of interactions with citizens and businesses through
improved connectivity, better access to information and services and better
processes and systems.

RATIONALE
• To integrate all State Government and federal EG initiatives and develop e-clusters i.e. tourism ,
education, health, ICT and biotechnology
• To enhance electronic delivery channel and mobile capability for Government portal
• Multi-channel delivery of services (Internet, WAP, Public access points and Call centres)
• To enhance efficiency of State Government’s overall service delivery

POTENTIAL BENEFITS

• Creating a more “client-friendly” government - increase efficiency of State Government process


and reduce unnecessary bureaucracy
• Create performance culture where processes require less “turn-around” time
• Implementation of one of the key indicators reflecting the transformation of Melaka towards a
developed k-state

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EXECUTIVE SUMMARY:
SD-3 Program: Change Management
INITIATIVE
• To implement change management programs throughout the entire State
Government parallel to the implementation of e-Government and the rollout
of online services from PBTs and other agencies

RATIONALE E

• Many are not ready to implement EG without training – Change Management programs will ensure
that the advancement and improvement in technology and processes are supported by the
appropriate quality and quantity of training programs and awareness campaigns to win the total
support and commitment from Government staff
• Past experience and lessons learned from the implementation of e-Government at Federal
Government has shown that appropriate investment in Change Management is critical to ensure
both people and technology can function in harmony to meet pre-implementation goals

POTENTIAL BENEFITS

• Ensure that the transition from traditional processes to technology driven processes can be
implemented smoothly with minimal user resistance
• Ensure that all affected Government staff are well educated of the benefits of new processes and
e-Government as a whole which is important as any negative feedback/perception from
Government staff can negatively affect Government services to the public. Degradation of
services resulting from lack of investment in Change Management may eliminate many potential
benefits that should be reaped with e-Government implementation

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EXECUTIVE SUMMARY:
SD-3 Program: Customer Relationship Management
INITIATIVE
• To implement a CRM solution for the entire state government to create a
client friendly environment for businesses and citizens

RATIONALE E

• CRM solutions will ensure that all issues and problems arising from Government services rendered
to business and the public are handled swiftly
• Implementation of such solutions will reduce bureaucracy and highlight weaknesses in
Government processes facilitating continuous improvement and promoting a performance driven
culture

POTENTIAL BENEFITS

• Melaka to be attractive for business due to the transparent and client-friendly environment
• Create Government that is more knowledge and information driven as opposed to the traditional
Government that is slower and process driven

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EXECUTIVE SUMMARY:
Implementation Timeline
2006 2007 2008 2009 2010

Project Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Project 1 Tourism Promotion Portal

Project 2 Attracting SSO Firms

Project 3 Tourism Content Development

Project 4 Reposition Health & Education Tourism

Project 5 Smart Partnership for Organized Growth

Project 6 Develop Biotechnology & Bioinformatics Sector

Project 7 Critical Mass for Broadband

Project 8 eMelaka – Phase II

Project 9 Melaka as Centre of Excellence

Project 10 Connecting PBTs/Deptst

Project 11 Implementing e-Government

Project 12 Change Management

Project 13 Implement CRM

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EXECUTIVE SUMMARY:
Conclusion
30% 10%
Enhance Economic Developing
Competitiveness K-Society
RM10 mil
RM43 mil Biotechnology RM108 million for 13 projects within 5 years
Broadband towards K-State development
Critical Mass
Content
Development E-Melaka Critical Success Factors:
‰ “Result oriented” - Focus on ICT
3 5
SSO Sector 10
5 Connecting PBTs implementation and buy-in rather than
Development
5 hardware and infrastructure
‰ “People centric” - K-Society (K-Workers)
15
development utmost importance to fuel
Tourism 15 economic growth in service centric
Promotion environment
Portal
‰ “Synergy & Sharing” - Integrated &
Collaborative implementation vital across
10 public sector, private sector and
30 communities
10 ‰ “Control over things...then things under
CRM Solution
control” – Professional management of
E-Government, projects (K-State program) needs capable
Change
Management delivery focused team, hands-on, on-
ground
RM65mil ‰ “Proactive not reactive” – Projects need
to have longer term view, regional and
Government Service Delivery global focus and responsive to market
changes ad dynamism
Excellence
60%
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Melaka ICT Strategic Blueprint

1.0. INTRODUCTION
1. Introduction
• Founded in the year 1396, Melaka represents one of the oldest recorded civilization in Peninsular
Malaysia. Located strategically at the heart of South East Asia, Melaka was known in the 15th century
as the centre of trade and knowledge of the region. Its historical influences have bequeathed Melaka
with a delightful mixture of people and cultures, all of whom contribute to the unique characteristics
of the state.
• Colonization by several foreign powers starting from the early part of 16th century has seen Melaka
gradually declining in importance to the region. This coupled with limited natural resources has
slowed the economic growth of the state prior to the Malaysian independence.
• Realizing its strengths and weaknesses, the state has managed to transform its economy focusing on
development of two main sector i.e. manufacturing and tourism. The state started inviting over
foreign investors in the early 70s and since then has met with commendable success. By end of 1997,
the state had registered a total investment of over RM16 bil., creating over 80,000 job opportunities.
• Today 30% of Melaka’s GDP is derived directly from its industry which is equally matched by its
booming tourism sector. To ensure that Melaka’s growth remains strong and sustainable, Melaka
needs to take the next step forward in it development, transforming its core economic sectors into
high value and knowledge driven sectors.
• As the country moves towards becoming a developed nation, knowledge was identified as the key
impetus and the birth of the Multimedia Super Corridor in mid 1990s is a testimony of the drive in
realizing the country’s Vision 2020.
• In line with global developments and opportunities, it is now timely for Melaka to leverage on the
advancement in ICT to further accelerate development across the state in line with its vision of
becoming a developed state. ICT has a strong affinity with knowledge and Melaka can successfully
launch high impact ICT initiatives that will propel the state to become a fully developed knowledge-
based state by 2010.
• This ICT Strategic Bluueprint contains the summary of recommendations and is a key segment of the
state’s ICT Masterplan designed to expedite Melaka’s drive to be a “ Developed K-State by 2010”.
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1.1. What is a K-State?

• In essence, a K-State is about attaining the


State’s mind shift to a culture in which the
State’s priority is to invest in the minds of all its
population to enable them to grow new emerging
industries, transform existing industries and path
the direction towards unimagined routes of
discovery to promote better life for current and
future generation.
• A K-State is not just for scientists or
technopreneurs or people working in “emerging”
industries. It will improve opportunities and
security for all people, whatever age, gender,
and level of education by strengthening
traditional industries, creating new jobs and
helping people to be retrained and re-skilled.
• In a K-State, the critical forces of political,
economics, social and technologies weaves
together in a common thread to form a
partnership of three powerful sectors namely the
public, private and community sectors in
collaboration to create both K-Society and K-
Economy

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1.2. Criteria of a K-State

Example of Criteria from The Heritage Foundation Knowledge Wheel (level of preparedness to embrace knowledge based
economy):
Share of worldwide computers in use
Business expenditure on R&D No. of computers per 1'000 people
Patents granted to residents Share of total worldwide MIPS

Total expenditure on R&D Computer power per capita

R&D personnel nationwide Connections to internet

Scientists & Engineers in R&D Investment in telecommunications

High-technology exports Telephone lines

Tertiary education enrolment Cellular mobile telephones

Secondary enrolment Television sets

Secondary pupil-teacher ratio Radios

Primary pupil-teacher ratio Fax machines


Literacy International call costs Malaysia
Newspaper circulation
United States
Total expenditure on education
Source : Economy Report 2001 * This chart is also described in Chapter 5
of the Third Outline Perspective Plan

35
1.3. What are the main thrusts of K-Economy and how is it
different from old industrial economy? (1)

MARKETS
Issue Old Industrial Economy New Knowledge Economy
Key Economy Drivers Large industrial firms Innovative entrepreneurial
knowledge-based firms
Economy Supplier Driven Customer Driven
Economic Development Steady & linear, predictable Volatile – fast change, with
explosive upsurges and sudden
downturns & chaotic – the
direction of the economy’s
changes not perfectly clear
Market Changes Slow & linear Fast & unpredictable
Lifecycle of Products / Long Short
Technologies
Scope of Competition Local Global hypercompetition
Competition Size: Big eats Small Speed: Fast eats Slow
Marketing Mass Marketing Differentiation

Source : MSCTC Analysis, 2004

36
1.3. What are the main thrusts of K-Economy and how is it
different from old industrial economy? (2)
ENTERPRISE
Issue Old Industrial Economy New Knowledge Economy
Pace of Business Slow Faster with ever rising customer
expectations
Emphasis On Stability Change Management
Business Development Approach Strategy pyramid: Vision, Opportunity driven, dynamic
Mission, Goals, Action Plans strategy
Success Measure Profit Market capitalization
Organization of Production Mass production Flexible & lean production
Key Drivers to Growth Capital Resources: People, Knowledge,
Capabilities
Key Sources of Innovation Research Research, system innovation,
knowledge mgmt, integration,
new business creation, venture
strategies, new business models
Key Technology Drivers Automation & mechanization ICT, e-business, computerized
design & manufacturing

Source : MSCTC Analysis, 2004

37
1.3. What are the main thrusts of K-Economy and how is it
different from old industrial economy? (3)

ENTERPRISE
Issue Old Industrial Economy New Knowledge Economy
Pace of Business Slow Faster with ever rising customer
expectations
Emphasis On Stability Change Management
Business Development Approach Strategy pyramid: Vision, Opportunity driven, dynamic
Mission, Goals, Action Plans strategy
Innovation Processes Periodic, linear Continuous, systemic
Production Focus Internal processes Entire value chain
Strategic Alliances with Other Rare, “go alone” mindset Teaming up to add
Firms complementary resources
Organizational Structures Hierarchical, bureaucratic, Interconnected subsystems,
functional, pyramid flexible, devolved, employee
empowerment, flat or
networked structure
Business Model Traditional, command & control New, refocused on people,
knowledge & coherence
Source : MSCTC Analysis, 2004

38
1.3. What are the main thrusts of K-Economy and how is it
different from old industrial economy? (4)

WORKFORCE
Issue Old Industrial Economy New Knowledge Economy
Leadership Vertical Shared: employee
empowerment & self leadership
Work force characteristics Mainly male, high proportion of No gender bias; high proportion
semi-skilled or unskilled of graduates
Skills Mono-skilled, standardized Multi-skilled, flexible
Education requirements A skill or a degree Continuous learning
Management employee relations Confrontation Cooperation, teamwork
Employment Stable Affected by market opportunity
/ risk factors
Employee seen as Expense Investment

Source : MSCTC Analysis, 2004

39
1.4. The K-Economy Transformation

R&D activities, enabled by ICT networks can now cross company,


There are wide industry and international boundaries, allowing Melaka’s research
implications -new and industry to participate in the global research effort and gain
business models, new better access to the global knowledge base. This demand new
Research & collaborative arrangements and capabilities to manage research
industry structures, new Development activities and IP, as well as national innovation policies that
kinds of social interaction accommodate this mode of operation. Science & industry
and new forms of development agencies are working to establish these new innovation
regulatory arrangements. policies
There is also a gap now A broad range of global content-based and export-oriented goods
wide opened. Technology and services are developing, including interactive multimedia,
and business digital film and TV, computer & online games, educational content
developments are pulling Communications production, digital publishing and online music. However, the
ahead of industry & Media market for cultural content cannot develop ahead of broadband
rollout; yet at the same timed broadband development is hindered
arrangements and
by limited availability of content. Broadband and digital content
government regulation policies are addressing this nexus
that we inherited from Major ICT related innovations have included incorporation of
20th century. e.g. (computerised) numerical controllers into machines, robotics and
Internet content local area (LAN) communication and control networks in factories.
regulation, intellectual However, there are wide disparities in productivity growth rates of
property protection, Manufacturing different manufacturing industries and it appears that less high-
electronic privacy tech, capital intensive industries are recording lower productivity
growth. It also found a strong correlation between domestioc ICT
protection, critical inputs and productivity growth, suggesting that ICT was a central
infrastructure security factor driving productivity growth
and government service Shared ICT infrastructures will become the norm and agenices will
delivery Government be able to aggregate the services offerings of other agencies to
provide packages “integrated services”.
40
1.5. The Challenges & Opportunities of K-Economy (1)

Growing
Melaka cannot afford to neglect the challenges dependence on OPENNESS to the
Institutionalization
of K-Economy transformation. Throughout SHARING knowledge
of CONTINUOUS
golabl economy
history, major new technologies have led to & information BTW through TRADE,
INNOVATION,
INDIVIDUALS, INVESTMENT &
predictable but far reaching cycles of change. COMMUNITIES &
PRODUCTIVITY
EXCHANGES of
IMPROVEMENT &
ORGANISATIONS to INFORMATION,
EDUCATION/SKILLS
The ICT cycles has begun, but the change we coordinate economic
FORMATION
KNOWLEDGE &
have seen is merely the beginning. Successful & social SKILLS
relationships
adjustments to the technology will create a
platform for long-term competitiveness,
renewal of regional communities and stronger FEATURES OF SUCCESSFUL K-ECONOMIES
social cohesion

Whether we want or not, there is no choice but MELAKA NEEDS TO RESPOND


to continue to adapt. The challenge is to ensure
Melaka’s response is strategic, coherent &
effective and in developing the new “ways of
working” to realise the full potential. GLOBAL DEVELOPMENTS

The opportunities lie in applying information,


knowledge & skills to improve Melaka’s The information & knowledge
economy and society and strengthen its The importance of intensive activities are
competitiveness INFORMATION, KNOWLEDGE, themselved being REPETEADLY
SKILLS & COMMUNICATION in TRANSFORMED BY NEW
These calls for collaboration between the public Information and communications
both economic & social
sector, the private sector and community to activities will continue to grow TECHNOLOGIES which keep
create the conditions for a successful K- emerging all the time
Economy

Source : MSCTC Analysis, 2004


41
1.5. The Challenges & Opportunities of K-Economy (2)
Technology Dimension of ICT Products & Services
These technologies will do more than
make business and personal
communications more efficient. They
allow business and consumers to
bring together “integrated”
information, transactions and
services that will cut complexity and
cost out of whole sectors of
economy. This can only happen when
business & government agencies, ICT
users & developers learn how to work
together to provide a seamless
service to customers and citizens
The combination of technology
change, falling prices and renewed
cost-consciousness is difficult for the
ICT production sector. These factors
suggest that it is unlikely that the
Source : MSCTC Analysis, 2004
industry will return to the high rates
of industry growth as seen in 1990s.
However, they also offer new
opportunities and new markets and
the industry continues to have a ICT customers need an adaptable, innovative ICT sector
bright future. to advise on, to create, to build and implement new ICT.
There is no dichotomy between production and use of
ICT. Both are needed in a successful K-Economy.
42
1.5. The Challenges & Opportunities of K-Economy (3)

ICT & K-Economy. Why ICT have remarkable impact?


New Emerging ICT
1. ICT has a strong affinity with information and knowledge. In an
economy where knowledge, information and communications are
central, a technology that significantly reduces the cost of
storing, processing and communication info is bound to have a
strong impact. The internet has magnified this impact by
providing an international “information infrastructure”. The
telecommunications network, originally for voice
communications, now supports a much wider range of
communications, including audio, video, data & financial
transactions
Knowledge ICT Information
2. Price (cost) of ICT continues to fall, making an ever-widening
range of applications commercially possible. At the same time,
cost of building network infra is falling faster than the cost of
either computing or data storage facilities. It is increasingly
cost-effective to connect to other people’s ICT than to own and
operate an internal ICT system. Innovative apps of these new
technologies in previously unrelated areas is also transforming
the nature of products and services themselves, as well as how
they are developed in non-ICT sectors of the economy
Falling prices
3. New ICT is emerging all the time, triggering new waves of
innovation that drive long term growth.
Source : MSCTC Analysis, 2004

43
1.6. What will Melaka as a K-State entail?
Provides its entire citizen with the opportunities to improve their skills and secure and high value jobs though
properly funded lifelong learning and vocational education programs;

Makes every school a centre of excellence and provides all children with quality education;

Has universities that attract world’s leading researchers and teachers, and

Encourage fundamental research and the study of State’s advantages (e.g Biodiversities) as well as applied
knowledge (that takes the research to market) in key niche areas.
Creates and promotes effective
linkages between research and
organizations (adequate state Transformed culture that
database, inventory of skills, emphasizes knowledge, excellence
Education and innovation and aims for it to be
resources and environment or
Government in its international reputation e.g.
generally referred to as the
“cadastre”) and enable effective
System countries like Finland and Ireland or
coordination to take advantage of states like Victoria and Bangalore
the available opportunities and whereby “image” is being
mitigate foreseeable threats; transformed by creating an
Economic inventory of internationally
Works imaginatively and Community recognized goods and services;
creatively as catalyst, System
encourager, information Uses knowledge resources to
provider, infrastructure supplier, promote public goods, encourage
major customer and example of access and equality, provide
“best practice”; and resources and opportunities for the
Based on innovation and creation or rural and overcome social, class,
Promotes a strategy of ensuring commercialization of ideas and that reverses ethnic and gender barriers;
investment in “key niche areas” serious imbalances in trade through high value
where it can establish a added good and services Creates a more challenging and
leadership or global position. creative environment that help
Supports the provision of leading edge reverse the “brain drain” and assist
telecommunications, transport and primary in importing the needed skills
infrastructures throughout the state and
application of knowledge to simultaneously to Strengthen great heritages such as
promote energy efficiency, higher living standards customs, museums, arts, historical
and creation of jobs. sites.
44
Melaka ICT Strategic Blueprint

2.0. CURRENT STATE ANALYSIS


2. Current State Analysis

High Readiness:
• Ready infrastructure – satisfactory Low Readiness:
internet/access points
• Most businesses not ICT enabled
• Initiated a reasonable number of
good programs & community • Mainly internal process driven
involvements • No real collaboration/sharing
COMMUNITY PRIVATE
• High internet penetration SECTOR SECTOR

• High ICT literacy Comprises:

• High PC penetration • Manufacturing


PUBLIC
SECTOR • Services
Comprises:
• Students, Working Population,
Housewives & Retirees
• Rural & Urban
• Young & Old

Medium Readiness:
Comprises:
• Growing investment in ICT
• State Govt Admin Office
• Good back end systems / connectivity
• District & Land Offices
• District Local Councils • Projects not integrated (Pockets of initiatives)

46
2.1. Melaka’s economy progressing strongly

• Melaka’s economy is coursing through strongly


• Melaka’s GDP per capita is the 4th strongest in Malaysia
after WP, Selangor & Penang

Real Income Per Capita (Malaysia & Melaka)

38000
40000

35000 32000 38000


30000 26000
RM (Current Price)

30805
25000

20000 17556 23610


15244
15000
16870
10000
14582

5000

0
2000 2005 2010 2015 2020
Year
Melaka Malaysia Population – 0.7 mil
Size – 1,650 km2
Source: 8MP, OPP3 & MSCTC Analysis GDP – RM12.2 bil (2004)
Note: Real Income Per Capita (Current Year) GDP growth – 7.4% (2003-2004)
Per Capita – RM17,556 (2004) 47
2.2. Tourism and Manufacturing driving Melaka’s GDP

Construction 2.8% ‰ GDP equivalent to 3% of Malaysian


Agriculture 3.9% economy
Mining 0.1%
‰ GDP growth faster than Malaysian
economy
Other Services 37%
‰ GDP per Capita higher than
3%4% •Private health services is national average
thriving in Melaka. Indonesian
patients visit Melaka’s private ‰ Tertiary sector is the biggest
28% hospitals due to its cost sector & driver of growth.
competitiveness. Doctor to
patient ratio is one of the highest
65% in the nation
‰ 65% of Melaka’s GDP contributed
by the services sector growing at
Tourism 28% approximately 10% per annum from
2002 to 2004
•28% of Melaka
economy is derived from
tourism
•1 in every 4 of tourists
to Malaysia visits
Melaka.
Manufacturing 28%

•Manufacturing contributes 28% of the


economy.

48
2.3. Public Sector embracing ICT

Melaka Cybercentre will support Melaka’s developed state mission by 2010,


K-State development and overall MSC’s agenda

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Initiating Phase Visioning Phase Implementing Phase

• Target
• K-Economy • E-Melaka • Basic Data Melaka State Vision Developed
division & initiatives 2004 published State status
incubator set launched Developed State
• 14,552 2010 • RM26,000 GDP
up
• Comprise of 12 housewives & per capitab
• 9a sector “e” initiatives: pensioners
Main Projects Strategy Indicator
tourism • e-Govt trained
development • e-Community
strategy • e-Education Balanced
23 Indicators
identified Development
• e-Tourism
• Melaka
• e-Commerce
Broadband Plan
• e-Politic Biotechnology
unveiled
• e-Youth
• e-Health • Melaka ICT Economy /
ICT Urban / Rural Between Races
Humanity
• e-Mosque Blueprint study
• e-Security commissioned
Manufacturing
• e-Media
• Melaka MSC Physical / Fardu Ain / Fardu
• e-Women Spiritual Kifayah
Cybercentre Tourism
submission
Agriculture

Human Capital
a Currently, Development
12 tourism sectors identified
b 1990 prices – Source: Melaka Basic Data 2004
49
2.4. Public Sector, Educational Institutions and Private
Sector are gearing up to embrace Knowledge and ICT
aggressively
‰ 95% of public servants in Melaka are equipped with PC & e-
mail access
‰ All 3 Pihak Berkuasa Tempatan - MBMB, MDJ and MPAG have
web presence to educate the public on its roles and plans
‰ Melaka State Investment Centre (MSIC) was created to play
the role as integrated investment promoter in ICT related
fields
‰ IHLs in the State offers second highest ICT related courses
per student population in Malaysia and produces highest
population ratio with tertiary education after Klang Valley &
Penang
‰ Multimedia University (MMU) actively promoting ICT
education in the State
‰ Syarikat Pemasaran Melaka was created to buy, package and
market quality products
‰ K-Economy Incubator set up to facilitate the development of
Melaka as a centre for service industries, R&D&D
‰ 174 mosques connected through the e-Mosque network
‰ 45 cybercafes (31 in Central Melaka)

50
2.5. Public, Private and Community participation is
prevalent across the state
One Village One Product
Duyong
Serkam
Rembia Kuih Cakar
(Prawn/Seafood)
(Handicraft) Ayam)

Ayer Panas
Alai (Kelapa Mawar)
Paya Rumput (Inang Inang) Bukit Sedanan
(Melaka Delite) (Taufu)

Kuala Linggi
(Gula Melaka)

Ramuan China
(Quail)

Bukit Asahan
(Pamelo)

Durian Tunggal
Mashid Tanah (Dodol)
(Spices) Ayer Keroh
(Crystal)

Ayer Molek Sg Rambai


(Durian) (Duku)
51
2.6. Telecommunication penetration – one of the highest in
Malaysia
Melaka’s telecommunication penetration is among the highest in Malaysia after
Klang Valley and Penang.
Internet Dial-up Penetration (%), 2004 PC per Household (%), 2000 Cellular Penetration (%), 2004

MSIA

WP LABUAN

WP KL

T'GGANU

S'GOR

S'WAK

SABAH

P. PINANG

PERLIS

PERAK

PAHANG

NEGERI 9

MELAKA

K'TAN

KEDAH

JOHOR

0 10 20 0 5
30 10 15
40 20 25 0
50 10 20 30 40 50 60 70 80
Sources: MCMC, 2004; DoS 2002
52
2.7. State Government eager to adopt and embrace ICT

JOHOR

K'TAN

NEGERI 9

PERAK

P. PINANG

S'WAK

T'GGANU
KEDAH

MELAKA

PAHANG

PERLIS

SABAH

S'GOR

WP KL
INDICATOR
YEAR (SOURCE)

Identification of location(s)
within the state for
Y Y Y Y Y Y Y N Y Y Y Y Y Y
nucleus ICT development
- MSC Macro Study, 2005
% of government staff with
PCs 58 70 20 95 * * 49 25 90 23 100 * 35 *
- MSC Macro Study, 2005
* Data not available

• The State Government of Melaka with its dynamic and visionary leadership has
increased utilization of technology in its daily work process to increase productivity
and effectiveness of Government machineries

53
2.8. State Government driving towards 2010
Melaka has outlined major projects for the Ninth Malaysia Plan (2006 – 2010).

NO PROJECT / PROGRAM BUDGET (RM’000)


1. UPGRADING OF BATU BERENDAM AIRPORT - (S) 37,000
2. RESEARCH AND DEVELOPMENT OF MELAKA BIOTECHNOLOGY 112,500
3. SPORTS COMPLEX (STADIUM) 138,000
4. BUILDING “UNIVERSITI PERGURUAN PEREMPUAN MELAYU MELAKA” AT RIM JASIN 500,000
5. BUILDING “UNIVERSITI KESENIAN, KEBUDAYAAN DAN WARISAN” AT BEMBAN JASIN 700,000
6. BEAUTIFICATION PROJECT SG. MELAKA PHASE 3 187,786
7. WATER PLANT LANCANG PHASE III 240,000
8. JERNEH DAM, LUBOK CHINA 100,000
9. CIQ MELAKA RIVER (PASSENGER JETTY) – (S) 4,500
10. TRAIN TRACK (FROM TAMPIN TO MELAKA CITY) 256,000
11. TAPAK PELUPUSAN SISA PEPEJAL ‘SANITARY LANDFILL’ 87,765
12. NEW HOSPITAL FOR ALOR GAJAH DISTRICT 70,000

13. UPGRADING JALAN INDUSTRI MELAKA STATE 300,000


14. UPGRADING AND REPAIRING JALAN MUAR – MELAKA – ALOR GAJAH – SIMPANG AMPAT 178,000
15. ENTRANCE TO KOLEJ UNIVERSITI TEKNIKAL KEBANGSAAN MALAYSIA (KUTKM) – (S) 23,000
16. TOURIST ROUTE FOR THE WHOLE OF MELAKA STATE 600,000

• More than one-fifth of its RMK9 budget for mega-projects will be focusing on building its bullish tourism
sector
• 35% of its RMK9 budget for mega-projects will be directly focusing on building its education sector
• More than RM100 million has been identified to fuel the growth of Melaka’s Biotechnology sector
• Approximately RM500 million has been identified for ICT development
54
2.9. Melaka – desirable business environment

• Among the lowest SAIDI Index for electricity in Malaysia which shows strong
stability in power supply
• Melaka offers higher quality of life compared to the Malaysian average

INDICATORS YEAR MALAYSIA MELAKA


• SAIDI Index (projected) 2004 111.4 74.2

• No of hospital bed per 100,000 population 2003 177.6 220.5

• Population per doctor 2003 1,377 1,138

• Population per dentist 2003 10,399 7,898

• No of post offices per 100,000 population 2002 2.5 3.4

• Road Development Index 2004 0.22 1.09

• Fixed telephone line per 1,000 population 2004 189.5 209.7

• Air Quality Index 2004 40 49

• Crime per 1,000 population 2004 6.1 4.6

55
Melaka ICT Strategic Blueprint

3.0. ISSUES AND CHALLENGES


3.1. Manufacturing sector growth not impressive of late (1)

State GDP
(RM Billions) 5

0
Agriculture Manufacturing Services Others Economic
Sector
2002 2003 2004
Source: Data Asas (UPEN), 2004

• Growth of the manufacturing sector in the State has flatten over recent
years
• Most of the existing large investments in manufacturing are based on foreign
intellectual property which translates to lower value add to the local
economy
57
3.1. Manufacturing sector growth not impressive of late (2)
Net FDI Inflow
(USD Billions)
60.0

50.0

40.0

30.0

20.0

10.0

0.0
1990 1995 2000 2001 2002 2003
-10.0
China India Malaysia Singapore
Source: Database of UNCTD, 2005

• Growth of FDI Inflow to Malaysia fueled by the manufacturing shown signs of weakening
• Recent development has seen China as world largest FDI recipient (specifically in
manufacturing and E&E) due to its significant cost advantages
• Malaysia will find it difficult to attract new sizeable investments in manufacturing and
will need to move to higher value add activities to maintain growth
58
3.2. Tourism Sector yet to fully leverage on ICT potential

‰ The Tourism Industry in Melaka is one of the largest contributor to the state GDP (28%
of GDP - RM3.4 bil) – Malaysia’s Tourism revenue stands at RM29.7 billion in 2004
‰ 4 mil tourists visits Melaka annually (i.e. 1 in 4 tourists to Malaysia) - 75% of tourists
are domestic travelers - Significant number of tourists are day-travelers which
resulted in Melaka inability to secure tourism revenues proportionate to the number
of tourist arrivals (potential: RM7.4 billion)
‰ Malaysian suppliers generally slow to exploit potential of E-Commerce.
ƒ Static web presence widespread, but limited in content.
ƒ Little “E-Enablement” or integration into operational systems.
ƒ On-line products are generally point-to-point air tickets, hotel rooms only
booking etc.
‰ In Canada, online booking represent one-third of all travel spending while 60% of
travelers uses internet for pre-travel research (Malaysia: 14.7%) - Currently, many
tourist information websites are available on Melaka but none of these websites
posses e-commerce transaction capabilities and are mostly non-interactive types.
‰ (PhocusWright, 2002) Tourists from North America and Europe recorded high online
travel bookings (>60% of world online travel), an are where Melaka Tourism Sector
should exploit
‰ Higher foreign travelers, higher average length of stay and higher tourist spending is
possible if the state’s Tourism Sector leverages on the power of ICT

59
3.3. Health tourism growing and showing potential

‰ The Health Tourism Industry in Melaka has been consistently registering an


average of 3000 foreign patients per month, most of whom are from
Indonesia, through campaigns and promotions done by the private
hospitals.

‰ Melaka’s close proximity to Sumatera makes her an attractive and much


cheaper alternative for medical treatment than Singapore and to some
extent, even Jakarta.

‰ The growing health tourism is in-line with the Federal Government’s


initiative to develop Malaysia’s health tourism.

‰ There is room for collective campaigns among the private hospitals so that
the services offered are better reflected and promoted through the use of
ICT such as improvements in the pre and post hospitalization services such
as: from flight booking facilities to accommodation to proposed
recuperation activities for patients to relaxation with family at spa
resorts.

60
3.4. Education tourism growing and showing potential

‰ Education tourism in Melaka is growing and has not been maximised yet.

‰ The registered number of foreign students in Melaka for 2004 is at 30,667


and growing.

‰ Most students come from ASEAN and some from the Middle-East and China.

‰ To further promote education tourism, Melaka could get accreditation of


local IPTS from other countries. This will allow students to take certain
courses or semesters in Melaka, which will be accepted and credited by
their IPTS in their own countries. Students will then be able to tour
Malaysia.

‰ The use ICT can create more awareness among the ICT-savvy students
around the region of Melaka’s untapped potential.

61
3.5. New Growth Sector: ICT – A Powerful Enabler of the
New Economy
… For the purpose of development goals for a nation, ICT can be a powerful enabler…
„ Power to store, retrieve, sort, filter, • Applicable to all, personal, …because its unique characteristics
distribute and share information = business and government dramatically improve communication
efficiency gains in production, • Multifunctional & flexible and the exchange of information to
distribution and markets. • Developed to meet strengthen and create new economic
„ Supply and production chains diverse needs and social networks.
streamlined = leaner & > effective
business processes and transactions Pervasive &
„ Users can acquire from original
Leads to new products, services and

cy
„ Cross Cutting provider hence reducing need for

Di
en
distribution channels within traditional

Fa
intermediaries.

sin
ici

cil
industries + innovative business A considerable source of efficiency as

Eff

ter
„

ita
ins
models and whole new industries.

me
les allows for specific needs or

tes
Ga
Barriers to entry È, competition Ç

dia
„
ICT preferences to be served
ab
En

tio
Characteristics

n
Allows for zero or declining

n E work
„
Di

• Through expansion of networks, ICT

r
marginal costs.
git

ble
can transcend cultural and linguistic

et
al

„ Replication of content is virtually

na
In

&N
barriers anywhere, anytime
&V
Na

free regardless of its volume, and • Users with access can benefit from

al
irtu
tur

tio
marginal costs for distribution

ob
exponentially increasing returns as
e

ea
a

Gl
and communication are near Disseminates
l

Cr
usage increases
zero. Information &
„ ICT can radically reduce Knowledge
transaction costs. Separates content from
„

physical location
„Flow of information impervious to geographic

boundaries, remote communities become


integrated and information, knowledge and
culture accessible to anyone
Source: UNDP

62
3.5.1 ICT Value Added - Malaysia

12000.0
ICT Service Value Added (RM’ Mil)
4018.9
10000.0
3014.7
1271.7
2269.6
8000.0 708.1
RM Million

378.3

6000.0 Mobile Value Added 218.3

4000.0

2000.0

0.0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Computer & Related Activities Fixed/Other Telecommunications Mobile

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Value Added (RM’ Mil) 3.225 3.641 3.958 4.883 5.510 6.169 7.354 8.275 8.032 9.161 10.05

As a% of GDP (%) 2.8 2.9 2.8 3.2 3.3 3.4 3.7 4.5 4.2 4.4 4.8

Note: Does not include Wholesale, Retail and Rental of ICT products

Source: MSCTC Analysis

63
3.5.2. Indicators - Malaysia

‘000 1990 1995 2000 2003e


Population 18,102 20,689 23,490 25,021
Households 3,771 4,310 4,911 5,389
Main Telephone Lines 1,819 3,340 4,754 4,670
• per 100 inhabitants 10.0 16.1 22.0 18.7
• per 100 households 37.9 (92) 55.9 66.4 61.7
Mobile cellular subscribers 13 873 5,122 11,424
• per 100 inhabitants 0.7 (91) 4.2 21.8 45.7
Personal computers 410 (92) 750 2,200 3,500
• per 100 inhabitants 2.2 3.6 9.91 14.0
Internet subscribers - 18 1,659 2,600
• per 100 inhabitants - 0.1 7.1 10.4
Estimated Internet users - 30 4,977 7,800
• per 100 inhabitants - 0.1 21.5 31.2
Estimated TV households n/a n/a 4,000 n/a
• % households with TV n/a n/a 81% n/a
Satellite Dishes - 29.4 (96) 561 1,001
• as a % of TV households - 6.8% 13% 18.6%
Source: DOSM, ITU

64
3.6. New growth sector - biotechnology and bioinformatics

‰ The biotechnology industry is currently one of the highest growing industry in


the world (valued at USD700 billion in 2004 with an annual turnover of USD75
billion).
‰ It is estimated that by 2030 biotechnology and life sciences will be the
leading industry globally and will continue to lead for a century to come.
‰ Malaysian herbal market alone is valued at RM2 billion with 90% products
imported from overseas – local market is expected to surpass RM13 billion by
2020.
‰ The World Bank projects that the global biotechnology industry to grow
between 12% to 17% p.a. until 2008 and will continue to grow at a healthy
rate of 8% p.a. in the following years
‰ Biotechnology has been identified by the Federal Government as a key and
necessary driver of economic growth in achieving developed nation status
and Vision 2020.
‰ In its effort to achieve developed state status and consistent with the efforts
of the Federal Government, Melaka should ensure that it leverages of the
economic drive offered by biotechnology and bioinformatics.

65
Melaka ICT Strategic Blueprint

4.0. SETTING THE DIRECTION


4.1. SETTING THE DIRECTION: ICT Development taking
centre stage
In Asia Pacific, various countries are adopting different growth models to suit specific national
development plans

ICT development
zones Malaysia
Hong Kong

Singapore
Investment focus

Japan

Korea
Advanced
networks

Australia
India

China
Basic Philippines
Access
Facilitating Substantial Instrumental
Government involvement
Size of National ICT Spending
Source: Singapore IT Federation, February 2002

67
4.1.1. ICT Initiatives – focus of new economic strategy

Globally, ICT initiatives are becoming a vital enabler to economic development, taking shape in
almost every country

United Kingdom Finland Mainland China Japan


• Modernising Government • World leader in mobiles • Large market and customer • Mobile commerce
• E-envoy (WAP, 3G, handsets) base leadership
• UK Online Government portal • World leader in mobile • Entry into the WTO (i-mode, 3G etc)
• Accelerated timescale for applications • Access to large IT • Vision 21 for info
eGovernment • eCitizen initiative workforce communications

Canada Hong Kong


• Mature • Digital 21
eGovernment • Invest Hong Kong
environment • Deregulated
• Smart Communities telecommunications
• Low internet charges • Promotion of B2B
exchanges

Singapore
United States
• Singapore One
• New federal • IT2000
Israel India Australia • InfoComm21
government portal
• Silicon Valley • S$1.5 billion on
• Leader in Internet • High volume of IT • Strategic Framework for
• Thought leadership, eGovernment
security prof. Information Economy
new business • Accelerated
• Reform of domestic • Rapidly upgrading • Access to skilled labour
models and deregulation of
telecom market. Mid infrastructure and • Sydney 2020 vision
exchanges telecom sector
2000 regulations. • Corprocure B2B exchange

Source: MSCTC Analysis, 2004

68
4.1.2. ICT includes both manufacturing & services

ICT sector is defined as


“ a combination of manufacturing and services industries that capture, transmit and display data
and information electronically” (ISIC rev 3/OECD)

Manufacturing classes Services classes

Office, Accounting Television and radio Instruments and appliances Wholesale of machinery,
& Computing machinery transmitters and for measuring, checking, equipment and supplies
apparatus for line testing, navigating and
telephony and line telegraphy other purposes, except
industrial process Rental of office machinery
Insulated Wire &
equipment & equipment (including
Cable computers)
Television and radio receivers,
sound or video recording or
Electronic Valves & reproducing apparatus and Industrial process
Tubes and other associated goods equipment Telecommunications
Electronic components

Computer & Related


Activities

Source : The OECD Definition of the ICT Sector, Measuring the Information Economy 2002, OECD

69
4.1.3. ICT as a Sector - Services

Malaysia adopts ISIC rev 3 definition of ICT which conforms to OECD countries definition
The following diagram shows the relevant economic activities which make up the ICT services sub-
sector in the Malaysian context. A more detailed explanation of the activities are attached in
appendix section.

ICT Services

Wholesale of Rental of office Computer & Related


Telecommunications Activities
machinery, equipment machinery & equipment
and supplies (including computers)

Wholesale of Rental of office Telephone services Data communication


(public & mobile) service (including Hardware Consultancy Database Activities
machinery, equipment machinery&
& supplies equipment (including network operations)
Television & radio Software Consultancy Maintenance &
computers)
transmission services & Supply Repair of Office,
Paging service
Accounting &
Other Computing
Data Processing
telecommunications Machinery
Services
services n.e.c

Other Computer
Related Activities

Under Category Under Category Real


Wholesale and Retail Estate, Renting and
Trade Business Activities

Source: Malaysia Standard Industrial Classification 2000


* In most cases, ICT services, such as telecommunication and computer related activities, constitute between 70% and 90% of total
ICT sector value added.

70
4.1.4. ICT Value Added - Malaysia
12000.0
ICT Service Value Added (RM’ Mil)
4018.9

10000.0
3014.7
1271.7
2269.6
8000.0 708.1

378.3
RM Million

6000.0 218.3

4000.0

2000.0

0.0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Computer & Related Activities Fixed/Other Telecommunications Mobile

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Value Added (RM’ Mil) 3.225 3.641 3.958 4.883 5.510 6.169 7.354 8.275 8.032 9.161 10.05
As a% of GDP (%) 2.8 2.9 2.8 3.2 3.3 3.4 3.7 4.5 4.2 4.4 4.8

Note: Does not include Wholesale, Retail and Rental of ICT products

Source: MSCTC Analysis

71
4.2. Other Local ICT Initiatives

Population – 0.7 mil


Size – 1,650 km2
Density Ratio – 363.64 per km2 Population – 4.6 mil
GDP – RM10 bil Size – 7,962 km2
GDP growth – 6.5% (2003) Density Ratio – 565 per km2
Per Capita – RM17,000 (USD4,474) GDP – RM 228 bil (2004)***
PENANG GDP growth – 6.2% (2004)***
Per Capita – RM48,900(2004)***

MELAKA Population – 1.4 mil SELANGOR


Size – 1,031 km2
Density Ratio – 1373 per km2
GDP – RM18.2 bil (2003)
GDP growth – 6.9%
Per Capita – RM20,034**

72
4.2.1. Strategic Framework of Penang ICT Blueprint

Vision: Penang will be a world-class competitive k-economy and a


pervasive k-society through knowledge enrichment and ICT excellence
within the context of Vision 2020
8 STRATEGIC GOALS
information and knowledge
affordable access to
Ensuring equitable and

quality knowledge workers


Producing a critical mass of

economy and organizations


Creating the learning

adoption of e-business
Promoting the widespread

production processes
production and post-
knowledge intensive pre-
value chain towards more
Moving up manufacturing

customer experience
effectiveness and positive
machinery for efficiency,
E-enabling the government

social sustainability
and digital divide to attain
Eliminating the knowledge

development
Promoting local content
5 INITIATIVES / THRUSTS
K-Worker Electronic
Connectivity E-Economy Digital Equity Good
Development
Governance
Penang K-ICT Blueprint is formulated to provide a roadmap for the development of k-economy to support the
goal of a fully developed state by 2010 as enunciated in Second Penang Strategic Development Plan

73
4.2.2. Lessons Learnt in Penang K-ICT Blueprint

Organisation Programs Actual Benefits Lessons Learnt

Government • Penang K-ICT Blueprint • Telephone density of • Must create conducive


• Penang K-ICT • Strategic K-Economy 26 subscribers per 100 conditions for the
Council identified 8 Initiatives on: population (Nov ‘03) marketplace
strategic goals. ƒ K-Worker well ahead of national (enterprise &
Development. rate of 14 subscribers entrepreneurship) to
ƒ Connectivity. per 100 population. lead.
• 3rd highest rate of • Publicize a clear vision
ƒ E-Economy. mobile phone users, and direction for K-
ƒ Digital Equity. PC ownership, Internet Economy.
ƒ Electronic Good connection in • Better incentives to
Governance. households. attract investments in
• ICT infrastructure is knowledge-intensive
better than most SEA sectors i.e. assessment
(except Spore). rates and price of land
for R&D.
• Mindset change to
appreciate education
as the springboard for
developing K-Economy.

74
75

Modernize/diversify agriculture
Environment

sectors (outskirts & farms) to


increase productivity (esp. food
Vision: Selangor to be a fully Developed and Industrial state by 2005

& livestock production)


Encourage/promote growth of
small & medium scale
industries/supporting industries
in rural areas
E-Government

Provide more low & middle cost


4.2.3. Strategic Framework of Selangor Maju

house
Widen/increase number of
middle-class Bumiputra
5 INITIATIVES / THRUSTS

entrepreneurs (entrepreneur
10 STRATEGIC GOALS

development program)
Curb & eradicate social Effective
problems
Redefine/reorganize local
councils (environment, income
& expenditure)
Create pool of skilled &
technology literate labor force

Efficient
Integrated & comprehensive
education program
Balance of development &
growth in housing, forestry,

Educated
industry & agriculture
Support MSC, Putrajaya &
Cyberjaya
4.2.4 Lessons Learnt in Selangor ICT initiatives

Organisation Programs Actual Benefits Lessons Learnt

Government • Federal • MSC Flagships: • Spill over from • Need a strong


Government, Smart School, the federal champion to lead
Multimedia Super MyKad, initiative most of • Concerted effort
Corridor, Cyberjaya, Telehealth, the flagship pilot from relevant
Putrajaya EGovernment project are in agencies for
Selangor sustainable
• Create IT development
industry within
Selangor (MSC)
• Improve service
delivery for the
private sector
• Create
employment
opportunities for
IT Industry

76
4.3. Selective International ICT Initiatives

Population - 4.9 mil (70% in Population – 4.0 mil (75% in Republic)


Melbourne)
Size – 70,280 km2
Size – 227,416 km2
Density Ratio – 78.26 per km2
ONTARIO Density Ratio – 21.55 per km2
GDP – USD768 bil (RM677 bil)
GDP – USD133 bil (RM505 bil)
GDP growth – 9%
GDP growth – 2.6%
Per Capita – USD31,041
Per Capita – USD26,974

Belfast
Ottawa

Population - 12.0 mil Dublin


Toronto IRELAND
Size – 1,077,011 km2
VICTORIA
Density Ratio – 11.14 per km2
GDP – USD326 bil (RM1,234 Melbourne
bil)
GDP growth – 1.3%
Note: Maps are all not to scale
Per Capita – USD24,774

77
4.3.1. Ireland – ICT as a Sector
Vision: Ireland to be a world leader in ICT by 2005
Strategic Strategic Strategic Strategic Strategic
Direction 1 Direction 2 Direction 3 Direction 4 Direction 5
Strategic Enabler 1

R&D

Strategic Enabler 2

Education

Strategic Enabler 3

Infrastructure
Develop
Achieve Attract new
Strategic Enabler 4 Move up expanded, Encourage
Centre of capital
technology educated and indigenous
Excellence intensive
Fiscal Policies & Incentives value chain responsive ICT sector
status investment
skills base
Strategic Enabler 5

Entrepreneurship

Strategic Enabler 6

Market relationships

Strategic Enabler 7

Intelligence gathering

78
4.3.1. Ireland – Focus, Sample Programs & Sample Results

Key Focus Sample Programs Sample Results

Ireland Research & Promote liaisons between government ICT sector employs 90,700 people in
Development agencies, universities, multi-national & over 1,300 companies up in 2003
indigenous sectors; Enhanced venture (19,000 in 1990).
capital environment. Over 300 overseas companies in the
ICT sector have a presence in Ireland.
Education Increase students in technology subjects in
Indigenous software sector employs
primary, secondary & tertiary levels; Up-
18,000 people (3000 in 1992).
skill people in workplaces; Increase home
Ireland is the largest exporter of
access to technology.
software in the world.
Infrastructure Upgrade/Improve key road & air access; One third of all PC's sold in Europe
Develop regional airport hub. are manufactured in Ireland.
Turnover in the ICT sector was over
Taxation Introduce targeted tax relief for industry
€51 billion in 200.
to engage in R&D; Amend legislation on
Total exports of ICT products and
stock options to allow a greater number of
services amounted to almost €30
ICT companies to qualify.
billion in 2002 (34% of all exports).
Entrepreneurship Encourage ICT start-ups & In 2002, thirty-two IDA-backed ICT
entrepreneurship; Package financial firms invested €120 million in R&D.
incentives.
Market relationships Develop marketing package with IDA
Ireland.
Intelligence gathering Develop a statistical profile of the ICT
sector

79
4.3.1. Lessons Learnt in Ireland ICT initiatives

Organisation Programs Actual Benefits Lessons Learnt

Government • Enterprise • Focuses on 3 key areas: • Significant • Need to create


Ireland ƒ Technology businesses are a vibrant
innovation emerging from Irish enterprise
ƒ Internationalisation
university campuses. culture.
ƒ Business
• Partnered leading
Irish companies to
development develop from high
growth start-up to
respected
international players.

Association • ICT Ireland • Identified 7 key areas: • ICT sector have • Need to
(collaboration of ƒ R&D moved up the respond with
assoc.) ƒ Education technology value speed,
ƒ Infrastructure chain. decisiveness
ƒ Taxation • Ireland have an and innovation
ƒ Entrepreneurship expanded, educated to the
ƒ Market relationships and responsive skills constantly
ƒ ICT sector profiling base. changing
• Ireland have demands of the
attracted significant global
additional inward marketplace.
investment.

80
4.3.2. Victoria (ICT as Enabler & Sector)

Vision: To be a Globally Recognised ICT hotspot by 2010

Strategic Strategic Strategic Strategic Strategic Strategic


Direction 1 Direction 2 Direction 3 Direction 4 Direction 5 Direction 6

Strategic Enabler 1

Governance

Strategic Enabler 2
Building a Growing Improving Promoting
Infrastructure Boosting E- Connecting
learning industries of infrastructure new style of
Commerce communities
society future & access Government
Strategic Enabler 3

Skills

Strategic Enabler 4

R&D

81
4.3.2. Victoria – Focus, Sample Programs & Sample
Results
Key Focus Sample Programs Sample Results
Victoria Building a E-Education. Student: computer ratio improved
learning society from 1:5 to 1:3.9.
Growing ICT Industry and Key Industry Symposium. ICT investments worth RM1.8 bil &
industries of Tourism Online to boost Victoria tourism 5000 new jobs created within 4 years.
future offerings online.
Bioinformatics Consortium to create an
emerging industry to grow.
Technology Demonstration Projects.

Boosting E- E-Commerce Exhibition Projects Program More than 1000 companies listed on
Commerce (ECEPP) to develop E-Business Clusters. VicIT.
E-Commerce Info Centre to establish a one- 39 councils shared RM4.7 mil to
stop-shop for E-Commerce. implement 26 e-commerce projects.
Connecting Connecting Communities 2001. More than 10,000 public internet
communities access terminals established.

Improving Regional Connections 2002. Over 700,000 people connected to


infrastructure & VicOne network through 3500 sites.
access
Promoting new Electronic Commerce For Procurement (EC4P) Over 450 Government services can be
style of for Government procurement. accessed online through Multiservice
Government Express.

82
4.3.2. Lessons Learnt in Victoria ICT initiatives (1)

Organisation Programs Actual Benefits Lessons Learnt


Government • Ministry for State • Connecting • A complete master plan • Public and Private Sectors
and Regional Victoria to boost ICT needs to be coherent in
Development development in directions and objectives.
Victoria. • Full commitment by all
• A common focus for all stakeholders is essential.
pubic and private
sector entities.

• Ministry for • Knowledge and • A wholistic and • Standardised curriculum


Education and skills for the standardised is essential for ICT
Training innovation framework for Victoria development.
economy Education system. • Education plans and
• Increased skills frameworks needed to
development among sustain ICT development
Victorians. • Stakeholders buy- in is
crucial.

Associations • Australian • Victoria ICT • A knowledge sharing • Common platforms


Information Symposium platform to boost ICT needed for Businesses to
Industry development. interact with each other.
Association • A networking platform • Associations play a key
for businesses to role in promoting ICT
interact and create usage and adoption.
partnerships.

83
4.3.2. Lessons Learnt in Victoria ICT initiatives (2)

Organisation Programs Actual Benefits Lessons Learnt

Private • Australian • Australian • Automating • Private sector’s


Automotive Automotive workflows so active
Manufacturers Network allowing for participation is
Exchange. increased process crucial.
efficiencies. • Business case
• Increased needed to kick-
business start and sustain
opportunities for initiatives.
Australian Auto
parts suppliers
and
manufacturers.

• AJB Publishing • Information • Encouraged • Recognition and


Technology and development and incentives needed
Telecommunica- growth of the ICT to boost ICT
tions Awards sector. development
momentum.
• Platforms are
needed for
Businesses to
showcase skills
and capabilities.

84
4.3.3. Ontario (ICT as an enabler)

Vision: Information and information technology (I&IT) to advance


government’s business vision

Strategic Strategic Strategic


Direction 1 Direction 2 Direction 3
Strategic
Enabler 1

Infostructure
Strategic
Promoting Developing a
Enabler 2 Transforming Lifelong consumer-
government Learning
Infrastructure centered model
administration
Culture for healthcare
Strategic
Enabler 3
Incentives
& Policies

85
4.3.3. Lessons Learnt in Ontario, Canada ICT
initiatives
Organization Programs Actual Benefits Lessons Learnt

Government • Department of • Ontario Knowledge • ICT is integrated into the • Education is key
Education Network for learning environment in bridging digital
Learning which enable learners and divide
teachers to have
interactive learning
experience
• The establishment of
satellite Communications
for remote schools that
ensures equitable access
for learning programs
throughout the province

• Telehealth Ontario • More than 43% of the • Need to secure


callers do not have to visit user and
doctor or emergency stakeholder buy-
rooms for health advice in.
• Processes and
service delivery
needs to be
structured and
standardized.

86
4.3.4. Key Lessons Learnt

State must have the following critical


PENANG
success factors:
• A clear agenda on ICT & indicators
• Top level champion & full commitment from
stakeholders (private sector engaged)
• Focused investment in Education & Human ONTARIO VICTORIA
Capital Development
Melbourne
• Programs to capitalise on strategic
advantages SELANGOR
Ottawa
• Well developed infrastructure & conducive
environment
Toronto
• Clear and stable policy, Good PR, Marketing
& Outreach programs (publicise clear vision
& directions for
K-Economy)
Note: Maps are all
• Good sets of data/information for effective not to scale

decision making
IRELAND

Dublin

87
4.4. Interpreting the Vision

Core Values
Core Purpose
Rich in heritage
• Economic growth - ICT to accelerate growth of Melaka Service oriented
(as a sector & enabler) Progressive & dynamic
• Bridging the digital divide - Make ICT education Progress with Quality of Life
accessible & affordable to all citizens of Melaka
• Wealth creation - Utilization of Knowledge and ICT to
increase the wealth of citizens of Melaka

ICT VISION
“Recapture past glory through
rapid advancement in knowledge
and ICT towards a fully developed
K-State”
Envisioned Future
• ICT as an important sector in Melaka economy
• ICT as the recognized enabler for Melaka economic
sectors
• A developed state with balanced spiritual and
physical development
• K-Society
88
4.5. Strategic Thrusts
• Leapfrog economic growth using ICT to spur knowledge based value
creation
• Align ICT program to drive state economic growth and social priorities
• Focus and invest in key niche areas with quick wins and high potential
returns
• Complement federal & local initiatives to improve competitiveness,
productivity & value-add

2 3
Government Enhance
Service Delivery Economic
Excellence Competitiveness
Community Private
Sector Sector
THRUSTS

Public
Sector
Churning Out Knowledge Workers
1
“Recapture past glory through rapid
advancement in knowledge and ICT
towards a fully developed K-State”
89
4.5.1. LEAPFROG economic growth using ICT to spur
knowledge based value creation
… Melaka needs to maintain a minimum average GDP growth rate of 8% p.a.
to achieve fully developed state status by 2020 …

Real Income Per Capita (Malaysia & Melaka)


38000
40000

35000 32000 38000


30000 26000
RM (Current Price)

30805
25000

20000 17556 23610


15244
15000
16870
10000
14582

5000

0
2000 2005 2010 2015 2020
Year
Melaka Malaysia Population – 0.7 mil
Size – 1,650 km2
Source: 8MP, OPP3 & MSCTC Analysis GDP – RM12.2 bil (2004)
Note: Real Income Per Capita (Current Year) GDP growth – 7.4% (2003-2004)
Per Capita – RM17,556 (2004) 90
4.5.2. ALIGN its ICT program to drive state economic
growth and social priorities
Melaka should focus its efforts and resources on high growth sectors and
sectors with high value add while gradually reduce dependencies on
declining sectors and sectors with lower value add to the local economy

Melaka GDP Distribution 2004 Melaka GDP Distribution 2020


GDP(’87) – RM7.4 bil GDP’87 – RM23.8 bil
GDP/Capita (’87) – RM10.5k GDP/Capita (’87) – RM26k
Construction
Agriculture & Mining Construction
3%
4% 2% Agriculture & Mining
3%

Manufacturing
28% Manufacturing

Services 3X 20%

65% FOR ILLUSTRATION ONLY

Services
75%

… focus on strengths …
… address weaknesses …
91
4.5.3. FOCUS and invest in key niche areas with quick wins
and high potential returns

Market Size Growth Potential Competitive Adv. Access to Market

ICT as a Sector

Manufacturing
Guide: Services
Market Size – Shared Services/
Comparative Local &
Global industry size
Outsourcing œ œ
(SSO)
Growth Potential – Creative
Industry growth rates Multimedia œ
Competitive Advantage Bio-Informatics
– With respect to
Melaka’s strategic ICT as an Enabler
strength
Services
Access to Market – Ease
of entry Tourism œ œ
Education œ œ
Health œ œ
Biotechnology œ
Manufacturing
Support œ

High œ Medium Low

92
4.5.4. COMPLEMENT federal & local initiatives to improve
competitiveness, productivity & value-add

National initiatives such as the following


will be able to provide a cost effective Realign Vision
way to rollout its ICT programs Access
Access
to to
Funds
Funds

s
rcse
throughout the State and position Melaka

soruce

Ac DDiissiinnt
ceA teerrmm
Reou
in the development efforts by Federal

scsc eeddi
toes

FFa ssMt ioonn


accil
teo iaatti
stso R

iliitta a
attee k
Government:

ss
or M
ces
Acces

eatr
Community Private

Ac
COMMUNITY
COMMUNITY PRIVATE
PRIVATE

ske
Sector Sector
National Broadband Plan,

D
SECTOR
SECTOR SECTOR
SECTOR
‰

HR
sR/ D ts
Ac
cAec

/ tH
PUBLIC
PUBLIC

MSC status for Institutions of Higher

n
Public

ssce
‰
SECTOR
SECTOR

altes
Sector

en
tsos

lT
Learning,

In

Ttoa
tof
Entry Identify

oIrnm

tsos
scse
for
atm
MSC flagships,

cAec
‰

ioant

Ac
Access
Access
to to
Incentives
Incentives

ion
‰ National Incubator Network,
‰ National Agriculture Policy,
‰ National Policy on Biological Diversity Prepare
Melaka needs to also provide compelling Source: MSCTC“ VIPER Model”
incentives in the form of hassle free
bureaucracy for investors.

93
4.5.4. COMPLEMENT federal & local initiatives to improve
competitiveness, productivity & value-add (2)

There are many potential investment/funding avenues available. Melaka can tap and leverage on
the vast amounts of funding available (RM 2.5 billion) for ICT and also the key services industries
Funding Type ICT Industry Industrial Agricultural Tourism Infra/Utility Other Ministries
Development Development Development Development
ƒ Govt. RM 2.5 bil RM 7.8 bil RM 1 bil RM 27bBil MITI, MIDA –
Allocation SME– RM1 bil ƒ Transport: incentives for
RM 22bil manufacturing,
ƒ Utilities: agriculture &
RM 5.5 bil tourism
ƒ Comm
RM 228 mil
ƒ Venture 20 Venture
Capital Capitalist RM2bil
ƒ Grants 12 Grant Schemes
with grants
totaling RM500 m
Focus To help spur the To strengthen Continue to be To obtain rapid Increase
growth of operations and guided by NAP3 tourism growth efficiency,
technology and capabilities of to be a modern, on a sustainable productivity,
also nurture R&D enterprises in dynamic and basis quality and
activities in the order to compete competitive reliability of
ICT industry liberally and sector infrastructure
globally facilities and
services
Eligibility Malaysian owned
co (30%)
MSC Status would
be more
advantageous
94
4.5.4. Strategic Thrust 4: COMPLEMENT federal & local
initiatives to improve competitiveness, productivity
& value-add (3)
Grant Scheme Focus Allocation
1. Commercialization of To provide partial funding to qualified R&D projects to be RM 100 mil
R&D (CRFD) commercialized
2. Demonstrator To encourage meaningful participation in ICT-based projects RM 100 mil
Application Grant and to encourage the use of knowledge for value creation
Scheme (DAGS)
3. E-Manufacturing Grant To assist SMEs to used ICT to improve their competitiveness, SMIDEC
efficiency & productivity
4. Engineering Design To assist SMEs to enhance their engineering design capabilities SMIDEC
Grant and enable them to carry out their own design in-house
5.Industry R&D Grant To build strong and innovative industrial technology capability MOSTE
Scheme (IGS) across all sectors
6.Intensification of To focus on R&D activities on areas which have potential for IRPA
Research in Priority enhancing the national socio-economic position
Areas (IRPA)
7. Market Development To assist SMEs in undertaking activities for the development of MATRADE
Grant (MDG) export markets
8. MSC R&D Grant Scheme To assist in developing relevant multimedia technologies & RM 100 mil
(MGS) applications in line with MSC
9. Rosettanet Grant (RNG) To prepare Malaysian cos for early adoption and RM 5 mil
implementation of RosettaNet
10. Technology Acquisition To promote technology upgrading through the introduction & MTDC
Fund (TAF) utilization of modern and efficient technology in
manufacturing & physical development of existing & new
products & processes
95
Melaka ICT Strategic Blueprint

5.0. THE ICT STRATEGIC FRAMEWORK


5.1. Overview of the Strategic ICT Framework
Recapture past glory through rapid advancement in knowledge and ICT
towards a fully developed K-State

Strategic Direction 1 Strategic Direction 2 Strategic Direction 3

Increase economic Develop Knowledge-


Create a Client-Friendly
wealth by focusing on Based Society & Develop
Government
high growth sectors Responsive Skill Base

Strategic Actions Strategic Actions Strategic Actions


Strategic Enabler 1
Develop and nurture high Enhance infrastructure to Making the Government
ICT Infrastructure & growth sectors to drive improve information more efficient,
Infostructure towards 2010 dissemination/availability transparent and
accessible to its clients
Maximize economic Create ICT awareness and using the power of ICT
Strategic Enabler 2 potential of high growth cultivate interest in
sectors using ICT knowledge and ICT Support transition to
electronic government
Education & skills Promote conducive Develop or expand environment through
environment to human capital through retraining and change
encourage higher value- targeted knowledge and management programs
add activities skills development
Strategic Enabler 3
Instill commercially
Build partnerships with Create incentives to oriented customer
Entrepreneurship relevant organizations encourage partnership relationship management
and align policies and between IHLs, R&D processes and culture in
incentives centres and the industry the government

Strategic Enabler 4 Gradually reduce


dependency on
traditional economic
Market Relationships
drivers

97
5.2. Strategic Direction I: Focusing on High Growth Sector

Strategic Direction 1 focuses on key actions to be taken to guide the state


towards K-Economy status and ultimately move Melaka towards being a
Strategic Direction 1 developed K-State by 2010:
Increase economic ‰ Focus on high growth sectors of the future which have the potential to
wealth by focusing on
high growth sectors accelerate GDP growth of the State by 8% per annum. These high growth
sectors are the Tourism Sector, ICT Sector and Biotechnology Sector
Strategic Actions
‰ Leverage on the power of ICT to maximize potential benefits from new
Develop and nurture high focus sectors. This involves the transformation of traditional business
growth sectors to drive processes onto new digital platforms to exploit untapped potential
towards 2010
‰ Promote an attractive business environment with relevant supporting
Maximize economic
potential of high growth
infrastructure to encourage higher value-add activities and attract interest
sectors using ICT and investments from the commercial sector to achieve critical mass in
chosen sectors
Promote conducive
environment to ‰ Develop strong partnerships with critical organizations such as tourism
encourage higher value- product suppliers, telecommunications providers, property developers,
add activities
healthcare sector, IHLs, transportation sector and etc to ensure that
Build partnerships with cohesive move is made to create the right platform on which key sectors
relevant organizations can thrive. Policies and incentives from the Government should be re-
and align policies and aligned to facilitate and mould commercial partners towards the state’s
incentives
economic agenda
Gradually reduce
dependency on
‰ Although it is important to maintain traditional economic sectors to
traditional economic maintain momentum in employment and GDP figures, conscious effort
drivers should be made to ensure that further efforts to attract investments are
balanced against the sectors’ growth potential in supporting the state’s
drive towards fully develop status - 2010

98
5.3. Strategic Direction II: Developing K-Society and the
Necessary Skill Base
Strategic Direction 2 Strategic Direction II focuses on key actions to be taken to mould the citizens
Develop Knowledge- of Melaka towards K-Society status which is imperative to move Melaka
Based Society & Develop towards a developed K-State by 2010:
Responsive Skill Base
‰ Efforts should be made to enhance infrastructure and facilitate information
Strategic Actions
dissemination capabilities. This will primarily involve an deliberate effort
Enhance infrastructure to from the State Government to create a 5% critical mass of users which is
improve information critical to encourage vendors of last mile connection to be commercially
dissemination/availability
active.– promotion in Melaka? – wireless city - Promote broadband/wireless
Create ICT awareness and access at key community areas
cultivate interest in
knowledge and ICT ‰ Continue efforts to bridge the digital divide by creating programs focusing
Develop or expand on creating ICT awareness and to cultivate interest in knowledge and
human capital through utilisation of ICT. This may involve further developing the existing E-
targeted knowledge and Melaka program to focus on awareness campaigns for communities with low
skills development
exposure to ICT (e.g. populations in rural areas and non-k-workers).
Create incentives to
encourage partnership ‰ Develop and expand human capital via programs dedicated to educate and
between IHLs, R&D train relevant entrepreneurs and workers in the targeted high growth
centres and the industry
sectors
‰ Create partnerships with IHLs, R&D Centres and the private sector to
ensure that relevant academic courses and research work are develop to
maximize the potential of the targeted high growth sectors (e.g. Tourism
Diplomas, Hotel & Catering Degrees and Content Development on Culture
and Edutainment)

99
5.4. Strategic Direction III: Creating a “Client-Friendly”
Government

Strategic Direction 3 Strategic Direction III focuses on key actions to be taken to steer the State
Government of Melaka towards K-Government status – an essential ingredient
Create a Client-Friendly
Government
to move Melaka towards a developed K-State by 2010:
‰ Making the Government more efficient, transparent and accessible to its
Strategic Actions clients using the power of ICT. This will include connecting the services of
Making the Government PBTs and Government Departments to the internet and promote higher
more efficient, accountability and transparency in service offerings.
transparent and
accessible to its clients ‰ Review/realign processes and implement EG at state level to promote an
using the power of ICT
efficient, transparent and accessible government
Support transition to
electronic government ‰ Implement Change Management program parallel to development of new
environment through processes to facilitate transition of processes and guide users through the
retraining and change
management programs
entire Awareness, Interest, Desire and Acceptance (AIDA) cycle

Instill commercially ‰ Implement a comprehensive Client Relationship Management solution for


oriented customer the entire state government to create a client friendly environment for
relationship management
processes and culture in
businesses and citizens. This will not only serve to increase the efficiency
the government of the State Government but it will also increase citizens’ trust in the
Government efforts to be more citizen centric – an important ingredient in
a successful K-State.

100
Melaka ICT Strategic Blueprint

6.0. PROGRAMS AND PROJECTS


6.1. Strategic Direction I: Focusing on High Growth
Sector

Program 2
Program 2
Attract
AttractSSO
SSOFirms
Firms

Program 1 Program
Program33
Program 1
Tourism
TourismPromotion Tourism
Promotion TourismContent
Content
Portal Development
Portal Development

Strategic Direction 1
Strategic Direction 1
Increase economic
Increase economic
wealth by focusing on
wealth by focusing on
high growth sectors
high growth sectors Program 4
Program Program 4
Program66 Re-position
Biotechnology Re-position
Biotechnology&& Health/Education
Bioinformatics Health/Education
Bioinformatics Tourism
Tourism

Program
Program55
Partnerships
Partnershipsfor
for
Organized Growth
Organized Growth

102
6.1.1. SD-1 Program: Tourism Promotion Portal
INITIATIVE
• To upgrade and unify current tourism related websites in Melaka under one
comprehensive tourism portal sponsored initially by the State Government –
portal may be handed over to the private sector once critical mass is achieved
• To provide opportunities for small and medium players in the Melaka Tourism
Sector to offer their offerings on the internet E
• To facilitate electronic purchase of tourism products in Melaka

RATIONALE

• At present, the current portal is static and non-interactive. Tourists should be able to do
everything on the internet from booking flight to booking hotel rooms to finding information
about in-city transportation to operating hours of tourist spots.
• Electronic purchase over the internet can be stimulated if it is fully backed by a trusted party the
such as the State Government
• A State Government backed portal will make it financially feasible for small to medium tourism
product supplier to market their product electronically

POTENTIAL BENEFITS

• Exposing the local tourism sector to more tourists specifically from developed nations with higher
spending power
• 40%-60% boost to tourism earnings in the State above the existing growth pattern – estimated
increase of RM1.3 billion to RM2.0 billion of GDP per annum

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6.1.2. SD-1 Program: Attract SSO Firms
INITIATIVE
• To attract Shared Services Outsourcing Firms to choose Hang Tuah Jaya as the
preferred centre of operations

RATIONALE E

• Melaka’s position in between the Klang Valley and Singapore makes it an attractive location for
SSO Firms
• The creation of a Cybercentre in Melaka will enable Melaka create the ideal business environment
(high quality infrastructures and performance guarantees) which is conducive to SSO business
• Melaka posses the right balance of hard and soft infrastructures with reasonably high quality of
life to attract SSO businesses
• Currently, Singapore Telecom is using Melaka for its SSO due to its cost advantage and various
factors conducive to the SSO business

POTENTIAL BENEFITS

• Creation of employments for 10,000 to 15,000 knowledge-workers


• Attracting high quality telecommunications and other business related infrastructures which will
contribute towards creating the critical mass to enable comprehensive rollout of broadband in the
State
• Generating consistent and assured income for the state and boosting the State’s GDP by RM1 –RM2
billion per annum
• The influx of k-workers will also create a positive impact to other sectors of the local economy to
further boost the local service sector
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6.1.3. SD-1 Program: Tourism Content Development
INITIATIVE
• To develop a Tourism/Culture/Multimedia Content Industry through
involvement from the Government, IHLs and local technopreneurs serving the
Melaka tourism sector.

E
RATIONALE
• Melaka possess the right mix of IHLs to support a Tourism/Culture/Multimedia Content Industry
• Virtual tours, clips and scenes will be developed using existing archives and scriptures. Output
from the Content Industry will then serve to increase the quality of tourism products (e.g.
museums, zoos, tourist parks, etc) and attract nurture more interest and boost revenues from the
tourism sector.
• As content will be required to be continuously updated, a steady stream of income will be
generated to create a sustainable growth to the proposed Content Industry and attract more
technopreneurs to participate and locate their operations in Melaka

POTENTIAL BENEFITS

• Contributing towards making Melaka a more “event tourism” oriented from the existing “place
tourism” oriented. This will encourage more repeat visits by tourists and further boost income
and growth of the local tourism sector
• Creating Melaka’s own Content Industry generating up to RM500 million demand in the local
economy
• Encourage the creation of critical mass in the Content Sector which will ultimately grow beyond
serving the local tourism sector

105
6.1.4. SD-1 Program: Re-position Health/Education Tourism
INITIATIVE
• To collaborate with the Health and Education sectors and review/reposition
offerings on Health and Education Tourism around suitable niche within each
sector (e.g. Education Tourism to focus on tourism management, Hotel
catering, public relations, multimedia content development, etc. while Health
Tourism to focus on Cardilogy, Cancer, etc) E
• Including the re-packaged Health and Tourism sector products on the Central
Tourism Portal initiative highlighted under SD-1

RATIONALE
• Currently each health/education tourism sector is promoting itself in isolation without specific
focus. Both sector needs to be repositioned and strengthen in specific niche areas to create a
clearer market positioning to their clients and attract more high value clients
• Melaka needs to ensure that the market it carves for itself in both sectors are sustainable. A
clear market strategy which involves specific niche and focus areas will make Melaka more
attractive to potential clients while at the same time ensures that investments made in marketing
reap maximum returns. Carving the right niche and focus areas may also reduce effect of
competing and similar sectors in neighboring nations

POTENTIAL BENEFITS

• Advertising and promotion cost would be reduced as it is shared between the health/education
and the tourism sectors
• Stronger brand as Melaka places herself in a niche specialized market

106
6.1.5. SD-1 Program: Partnerships for Organized Growth
INITIATIVE
• To create partnerships with commercial and IHL organizations to ensure that
other sectors of the economy grows in tandem with the demand created by
key focus sectors.

RATIONALE E

• Requirement of knowledge workers and technology companies such as higher quality housing,
entertainment, office space and etc can be developed to further improve the commercial
attractiveness of the state for business relocations and as centre of operations
• Demand generated resulting from the expansion of focus sectors (tourism, ICT and biotechnology
sectors) can be anticipated and met to encourage a higher yet more balanced growth in the local
economy

POTENTIAL BENEFITS

• Increase commercial attractiveness of the Melaka State to SSO Organizations, Technology


Companies and Knowledge Workers
• Facilitate a balanced growth in other sectors of the economy such as properties, construction,
education and services

107
6.1.6. SD-1 Program: Biotechnology & Bioinformatics
INITIATIVE
• Focus on biotechnology and encourage the use ICT to maximize potential. Set
up database centre for biotech & bioinformatics
• personalized medicine & healthcare
• traditional herbal medicinal plants
• cataloging DNA marker technology for herbal & traditional medicine E
• database screening for anti cancer

RATIONALE

• Growth of biotechnology sector estimated to average from 12% to 17% annually will further boost
the State’s GDP
• Biotechnology and bioinformatics sector is expected to be the leading growth sector in the world
economy by 2030 and will continue to lead for a century to come

POTENTIAL BENEFITS

• Improved processes of biotech product, with spillover effect of improving cottage industries, e.g.:
higher quality and longer lasting cencaluk, dodol and gula melaka enabling bigger commercial
possibilities and higher profits
• Participate in the high growing Malaysian herbal sector (estimated at RM2 billion annually) which
is expected to grow to as large as RM13 billion by 2020

108
6.2. Strategic Direction II: Developing K-Society and the
Necessary Skill Base

Program
Program11
Development
DevelopmentofofCritical
Critical
Mass
Mass

Strategic Direction 2
Strategic Direction 2
Develop Knowledge-
Develop Knowledge-
Based Society & Develop
Based Society & Develop
Responsive Skill Base
Responsive Skill Base

Program
Program44 Program
Program22
Aligning
AligningIHLs E-Melaka
IHLs E-Melaka

109
6.2.1. SD-2 Program: Development of Critical Mass
INITIATIVE
• To develop critical mass of broadband users to encourage industry players to
rollout infrastructure at the last mile. For the State Government, this shall
involve connecting schools, IHLs, hospitals, government buildings, community
centers, shopping malls, mosque, libraries and etc
E

RATIONALE
• According to the National Broadband Plan, Malaysia has abundant availability of domestic
backbone capacity as compared to last mile broadband infrastructure – a critical mass (5%
connectivity) will encourage industry players to rollout infrastructure at the last mile
• Broadband is critical in the development of k-society, k-economy and the quest to be a developed
k-state:
• Pre-requisite for high-speed info-communications access
• New benchmark on national infrastructure and country competitiveness
• Support expansion of Multimedia Super Corridor (MSC) nationwide
• Facilitate the rollout of e-government and other flagship applications
• Potential for bridging the digital divide hence the knowledge divide

POTENTIAL BENEFITS
• Intervention by the State Government (i.e. connecting Government agencies, schools, hospitals,
etc) in developing critical mass will assist telecommunications industry to rollout broadband
widely within the State and help in the efforts to develop a k-society in Melaka

110
6.2.2. SD-2 Program: e-Melaka
INITIATIVE
• To persist and continue with e-Melaka program to connect communities and
increase ICT awareness specifically among rural populations and other
segment of the population which are not exposed to ICT development

RATIONALE
• In its effort to develop a k-society, community and awareness program such as e-Melaka is
important to ensure that
• ICT awareness campaigns are implemented for population segments that are still not exposed
to ICT development
• Promote the State Government’s efforts to leverage on ICT to be more transparent and more
customer friendly. This will ensure that more support can be gathered from the public - a
critical ingredient of success

POTENTIAL BENEFITS

• Increase visibility of the State Government efforts to the public and will help the Government to
gather support from the public to bridge the digital divide
• Act as a promotional campaign to inform the public of new developed e-Government applications
and improve the ability of the Government to deliver its services more efficiently and effectively

111
6.2.3. SD-2 Program: Aligning IHLs
INITIATIVE
• To align IHLs in Melaka to offer more courses relevant to focus economic sectors
(i.e. tourism, ICT and biotechnology sectors)
• To encourage IHLs to get relevant accreditation from Lembaga Akreditasi Negara
(LAN) and be more attractive to both local and overseas students

RATIONALE
• As courses are recognized by LAN, IHLs will be more attractive to students, local and foreign.
• Currently, there are not many IHLs offering courses in the services industry and Melaka is able to
fill the niche

POTENTIAL BENEFITS

• Development of k-workers which are suitable and relevant to key economic sectors
• Creating an academic centre of excellence in the tourism and ICT sectors
• Foreign students will help generate income through long stay

112
6.3. Strategic Direction III: Creating a “Client-Friendly”
Government

Program
Program11
Connecting
ConnectingPBTs/Depts
PBTs/Depts

Program Strategic Direction 3


Program44 Program
Customer
CustomerRelationship
Relationship Program22
Management Create a Client-Friendly Implement EG
Management Implement EG
Government

Program
Program33
Change
ChangeManagement
Management

113
6.3.1. SD-3 Program: Connecting PBTs/Depts
INITIATIVE
• To connect PBTs and government departments to each other creating a web of
information
• Offering of services online

RATIONALE E

• Improve efficiency of processes by educating the public


• Improve transparency of government processes and preparing the government for the new k-
environment
• Providing the public with timely and accurate information to propel the local economy forward
and support growth of key economic sectors

POTENTIAL BENEFITS

• Reduced bureaucracy in Government processes and increase efficiency of government service


delivery
• Allow the State Government to focus on more strategic issue relating to developing sustainable
economic growth reduce time required to deal with issues resulting from operational ineficiencies

114
6.3.2. SD-3 Program: Implement EG
INITIATIVE
• To fully implement electronic government at the State Government - the e-
Government programme aims at reinventing how the State Government works
and improve the quality of interactions with citizens and businesses through
improved connectivity, better access to information and services and better
processes and systems.

RATIONALE
• To integrate all State Government and federal EG initiatives and develop e-clusters i.e. tourism ,
education, health, ICT and biotechnology
• To enhance electronic delivery channel and mobile capability for Government portal
• Multi-channel delivery of services (Internet, WAP, Public access points and Call centres)
• To enhance efficiency of State Government’s overall service delivery

POTENTIAL BENEFITS

• Creating a more “client-friendly” government - increase efficiency of State Government process


and reduce unnecessary bureaucracy
• Create performance culture where processes require less “turn-around” time
• Implementation of one of the key indicators reflecting the transformation of Melaka towards a
developed k-state

115
6.3.3. SD-3 Program: Change Management
INITIATIVE
• To implement change management programs throughout the entire State
Government parallel to the implementation of e-Government and the rollout
of online services from PBTs and other agencies

RATIONALE E

• Many are not ready to implement EG without training – Change Management programs will ensure
that the advancement and improvement in technology and processes are supported by the
appropriate quality and quantity of training programs and awareness campaigns to win the total
support and commitment from Government staff
• Past experience and lessons learned from the implementation of e-Government at Federal
Government has shown that appropriate investment in Change Management is critical to ensure
both people and technology can function in harmony to meet pre-implementation goals

POTENTIAL BENEFITS

• Ensure that the transition from traditional processes to technology driven processes can be
implemented smoothly with minimal user resistance
• Ensure that all affected Government staff are well educated of the benefits of new processes and
e-Government as a whole which is important as any negative feedback/perception from
Government staff can negatively affect Government services to the public. Degradation of
services resulting from lack of investment in Change Management may eliminate many potential
benefits that should be reaped with e-Government implementation

116
6.3.4. SD-3 Program: Customer Relationship Management
INITIATIVE
• To implement a CRM solution for the entire state government to create a
client friendly environment for businesses and citizens

RATIONALE E

• CRM solutions will ensure that all issues and problems arising from Government services rendered
to business and the public are handled swiftly
• Implementation of such solutions will reduce bureaucracy and highlight weaknesses in
Government processes facilitating continuous improvement and promoting a performance driven
culture

POTENTIAL BENEFITS

• Melaka to be attractive for business due to the transparent and client-friendly environment
• Create Government that is more knowledge and information driven as opposed to the traditional
Government that is slower and process driven

117
6.4. Summary of Programs and Projects

Program Description Owner Estimated Budget


• Tourism Promotion Portal BPP RM15 mil

• Attracting SSO Firms MSIC RM5 mil

• Develop Tourism Content Development BPP RM10 mil

• Re-position Health and Education Tourism BPP Nil

• Partnership for Organized Growth UPEN Nil

• Develop Biotechnology and Bioinformatics Sector IBM RM3 mil

• Develop Critical Mass to facilitate broadband usage MICTH RM5 mil

• Move e-Melaka into Second Phase K-Economy RM5 mil

• Aligning IHLs to develop Melaka as Centre of Excellence UPEN Nil

• Connecting PBTs and Departments JKM RM15 mil

• Implement Electronic Government at State Government JKM RM30 mil

• Implement Change Management program JKM RM10 mil

• Implement Customer Relationship Management Application JKM RM10 mil

118
Melaka ICT Strategic Blueprint

7.0. IMPLEMENTATION TIMELINE


7. Implementation Timeline

2006 2007 2008 2009 2010

Project Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Project 1 Tourism Promotion Portal

Project 2 Attracting SSO Firms

Project 3 Tourism Content Development

Project 4 Reposition Health & Education Tourism

Project 5 Smart Partnership for Organized Growth

Project 6 Develop Biotechnology & Bioinformatics Sector

Project 7 Critical Mass for Broadband

Project 8 eMelaka – Phase II

Project 9 Melaka as Centre of Excellence

Project 10 Connecting PBTs/Deptst

Project 11 Implementing e-Government

Project 12 Change Management

Project 13 Implement CRM

120
Melaka ICT Strategic Blueprint

8.0. CONCLUSION
8. Conclusion
25% 20%
Enhance Economic Developing
Competitiveness K-Society
RM10 mil
RM43 mil Biotechnology
Broadband RM108 million for 13 projects within 5 years
Content
Critical Mass towards K-State development
Development E-Melaka
3
Critical Success Factors:
10 5
SSO Sector
5 Connecting PBTs ‰ “Result oriented” - Focus on ICT
Development
5 implementation and buy-in rather than
hardware and infrastructure
15
‰ “People centric” - K-Society (K-Workers)
Tourism 15 development utmost importance to fuel
Promotion economic growth in service centric
Portal
environment
‰ “Synergy & Sharing” - Integrated &
10 Collaborative implementation vital across
30 public sector, private sector and
10 communities
CRM Solution
‰ “Control over things...then things under
Change
E-Government, control” – Professional management of
Management projects (K-State program) needs capable
delivery focused team, hands-on, on-
RM65mil ground
‰ “Proactive not reactive” – Projects need
Government Service Delivery to have longer term view, regional and
Excellence global focus and responsive to market
55% changes ad dynamism

122
Thank you

123