Second Millennial 20/20 Asia Summit draws 3,000 visitors from 31 countries

Infographic based on a keynote at the Millennial 20/20 Summit 2017 in Singapore about how AI will customise the customer journey. The keynote was presented by Avis Easteal. Head of Consumer, Luxasia, and Vivek Vaidya, CTO, Marketing Cloud, Salesforce.

Chatri Sityodtong, Chairman and CEO of ONE Championship. opened the summit’s first day with a keynote on how to engage and embrace an audience at scale. Infographic based on the keynote. 

The second edition of the Millennial 20/20 Asia Summit has charted the future of retail marketing and commerce as it is likely to impact Asia’s digitally-savvy consumer landscape. A record 3,000 attendees from 31 countries examined innovation and disruption across key industries in anticipation of the “experience revolution” for future commerce over two days.

This year, the Millennial 20/20 Asia Summit welcomed new industry segments and content such as finance, AI as well as virtual and augmented reality, plus hosted experiential showcases by Facebook, Salesforce, Unilever Foundry, The Economist, Mondelēz International, Blippar, and Ksubaka.

The brand showcases allowed visitors to interact with innovations and technologies set to unlock new possibilities and frontiers, unearthing greater insight and analytics that will better equip them to tackle challenges from tomorrow’s ever-evolving marketplace.

Free tacos from The Economist's booth.

Feeding the Future by The Economist gave visitors a taste of manmade, sustainable meat, while A Vision of Marketing of Tomorrow and a Plan for Today showcase by Facebook saw visitors order coffees through a chatbot. Salesforce, one of the main sponsors for the summit this year, showcased Salesforce Einstein that helps businesses connect to their customers in a whole new way. Finally, the Unilever Foundry Start-up Street brought together some of the world’s most ambitious startups.

Speaking at the close of the summit, Simon Berger, Founding Partner, Millennial 20/20 said: “It’s great to see that the success of last year’s event has reached a new level this year! The lineup of speakers sponsors and showcases raised the bar this week, and I am already excited for next year’s agenda. The highlights for me this year included the Salesforce closing party and the successful launch of the inaugural Millennial Ones to Watch Awards. I thank all our partners and trendsetting brands and industry innovators that support the summit and I look forward to seeing you all again soon! M20/20 really embraces the new way to do business!”

Highlights from day one included the opening keynote by Chatri Sityodtong, Chairman & CEO of One Championship, who shared how the largest sports media property in Asia, which he built from scratch, answers the painpoints of engaging a younger audience.

It's all about personalisation, and that means tracking the right data to segment the audience further, said Anil Srinivas, Senior Director and Regional Lead, Ecommerce, Levi Strauss & Co., Kimberly-Clark's Juliana Chu, Director of Digital & Analytics, Asia Pacific, and Criteo's Alban Villani, GM, Southeast Asia, Taiwan & Hong Kong.

Personalisation was the name of the game. Personalisation in e-commerce and the revival of brick-and-mortar through curating in-store experiences as discussed by Levi Strauss & Co., Kimberly-Clark, and Criteo were also a hot topic.

Standout sessions from day two included a presentation by pioneers of the sharing economy, Uxin Group, Homeaway, Agoda, and Go-Jek on how to market products they do not own, and what ingredients are essential to define a unique value proposition for their company.

A panel in the Food & Beverage track discussed how Accenture, The Coca-Cola Company, and Uber are leading the Asian consumer revolution with their grasp on the region’s demand for personalised services, multiple languages, channel agnosticism, delivering services and solutions that meets Asia’s immediate desires, and its "collective personality".

Facebook encouraged visitors to order coffee by chatbot.

Instructions on
ordering coffee
at the Facebook
Messenger Cafe.

The personalisation theme continued in the discussions.

· Fusion of traditional values with innovation needed for the travel and hospitality industry

Speakers in the Travel & Hospitality track deliberated on how there is still a need to accelerate the pace of change and innovation while still holding traditional values that work in reaching out to today’s Millennial traveller. Personalised and bespoke experiences formed the crux of many of the successful case studies shared by speakers.

· Fashion and beauty: it’s all about me!

Fashion and beauty brands and retailers today are being tasked with knowing customers better than they’ve ever known them before, and delivering an experience tailored to them. Personalisation continues to be the key to success in retail. Major brands discussed the demand to blend creativity into experiences that can be rolled out across all consumer touch-points.

· E-commerce of tomorrow to focus on frictionless, “human-first” approach

The hyperconnected consumer of today has more than one way to buy products and services, and to discover and interact with brands. Today’s consumers are also the most tech-savvy to date, expecting seamlessness in omnichannel commerce. Speakers on this track concretised strategies that put the consumer at the forefront, also discussing how best to remove hindrances that could mar the consumer’s overall experience and overall impression of the brand.

· Personalisation key to demand generation in food and beverage industry

With street food, popups and unique food experiences on the up, established brands are facing an uphill task of generating demand for their products. Major players in the food & beverage industry discussed how they can leverage newer technologies to create lasting relationships with consumers.

· Convergence of finance and technology giving rise to the future of banking and money

Speakers of this track converged to discuss the rise of mobile money, cryptocurrencies, and other digital technologies that continue to take banking beyond its physical branch context. Industry veterans also debated on whether physical cash is heading towards extinction, given the sharp rise in mobile wallet payments in the region.

Infographics summarising
sessions.

· Decentralised media consumption key to defining marketing and advertising

Marketers and advertisers of today are challenged with engaging technologically-savvy consumers across generations. Future-ready marketers discuss the decentralised approach to marketing to the masses, harnessing new platforms and formats to reach consumers in creative and unique ways. Games, influencers and artificial intelligence (AI) formed some of the positive case studies shared during this session.

· Innovation beyond “brand gimmicks” to define the future of e-commerce

Innovation towards tomorrow’s e-commerce should revolve around the empowerment of communities. Brands need to constantly evolve and adapt to not only avoid losing market share, but to also drive effective consumer experiences and growth. The region’s most innovative companies came together to explore the future of mobility, which sees services going to consumers rather than the other way around, as is traditional.

· AI and bots will be a retail mainstay

With a strong indication that a majority of customer interactions in retail will be managed by AI by 2020, retailers gathered to discuss how best to leverage this technology in meeting the dynamic demands of tomorrow’s consumers. Retailers also discussed how new-age partnerships with non-retail firms may be needed to meet the demands of Millennial consumers.

"The brands and showcases at Millennial 20/20 congregated some of the brightest minds in retail, marketing and commerce. The customer of today is in control of their shopping experience. The holy grail for retailers and marketers is to meet them on their terms," said Simon Tate, APAC Area VVP, Marketing Cloud, Salesforce.

This year’s summit also saw the launch of M20/20 Backstage, a closed area of the summit that hosted brand and retailer roundtables, workshops and lunches. The backstage programme included closed-group discussions on opportunities and challenges facing the industry. Highlights of the programme included:

· The Future of Brands and Retailers: Commerce Marketing hosted by Criteo. In the discussion, brands and retailers discussed the future of technology to shape customers’ expectations, personalisation, retention of a strong voice with consumers and the ingredients to create a vibrant future.

· Data Driven Customer Experience Management hosted by Salesforce. C-suite brands and retailers addressed the fourth industrial revolution.

This year’s summit also supported the Accenture Consumer Technology Awards (ACTA) as well as the launch of the Millennial 20/20 One’s to Watch Awards (MOWA). The MOWA were designed to celebrate the ecosystem catering to consumers. Winners included:

• Mondelez for their China Oreo Music Box Campaign in the Killer Campaign category, 
• Ksubaka for Best Retail Solution, 
• DBS for Millennial Brand 2017, 
• Unilever Foundry & Level 3 for Eco-system Star of the Year and 
• Arcadier for Millennial Commerce-Enabler. 

The ACTA recognises and rewards early-stage innovators that are pushing the boundaries to better engage with the Millennial consumer in the automotive, consumer goods & services, retail and travel industries. Raincheck, LittleSea, Simgo and ProxToMe walked away with the Millennial Shopper, Millennial Consumer, Millennial Traveller, and Millennial Driver prizes respectively.

Teo Correia, Senior MD, Accenture, noted that the company has been the global title partner of M20/20 since the beginning. He said the event continues to be relevant and lead the way for future business events. "Accenture and M20/20 promote the new way of doing business!’’ he said.

Highlights from the showfloor included:

Identify the sales genome - demographics of consumers - from publicly available sources such as social media, which is used here to track the use of butter for a dairy manufacturer. Manufacturers are typically distanced from the consumer by middlemen such as retailers and may not know much about who purchases their products. Such a system, created by Accenture, would offer them more insights.

The Hololens Planogram Editor, demonstrated by Accenture, uses Microsoft's Hololens and software to create a virtual planogram anywhere. A planogram allows retailers to plan the layout of a shelf.

This demonstration, also at the Accenture booth, shows a virtual fitting room that uses a Kinect to support gesture-based control. Software on the laptop below identifies facial expressions and can map them back to whether a shopper is pleased with products selected.

The Kinect was also used to recognise gestures that control product selection in this e-grocery retail demonstration. Such a system could be useful for people who are not tech-savvy, and retailers would not need a touch screen.  

Salesforce had a discussion area set out like a camping ground.

Blippar uses digital technology to help brands engage with consumers. Its #futbolnow Pepsi campaign received 2.4 million interactions from 1.2 million unique users and involved scanning the cans to download videos, music and an augmented reality game. The company also has image recognition technology that can recognise over 370,000 public figures, and any car in the US with 99.67% accuracy.

Digimind offers social media and competitive intelligence. Statistics displayed at its booth included the fact that 60% of the 2.3 billion Millennials in the world live in the Asia Pacific region. 

At the A Vision of Marketing of Tomorrow and a Plan for Today showcase by Facebook various success stories were highlighted, including how Garena used the custom audiences feature to reach registered players who had not played its game in at least 14 days. Mobile app engagement ads with an incentive - a gift or virtual currency - were displayed to encourage them to keep playing. Shanghai-based video game developer and publisher Lilith used app event optimisation and mobile app install ads to attract gamers who are willing to pay for in-game features. They also identified international lookalike audiences of gamers who are likely to install and pay. This display notes that Facebook's mobile app ads capture attention, drive action, app discovery, and influence people to keep returning to the app.

Key takeaways from the sessions at the event included:

The five keys to enabling digital conversions at scale are deliverability, design, content, contextualisation and globalisation, says Scott Heimes, Send Grid CMO.

What they say about lasting brand love. Lawrence Law, Global Brand Director, Diageo - Johnnie Walker, Vita Coco's Patrick Wang, GM - Asia Pacific, and Chris Bowen, VP for Customer and Commercial, APAC, The Coca-Cola Company, used
'PIE' - purpose, innovation and experience - to explain.

Global fashion and beauty brands are being forced to be more creative and experiential. Ideas discussed by panelists Yvonne Perpetua Ng - Senior Marketing Manager, The Estee Lauder Companies; Cynthia Zhong, Moiselle GM, Asia Pacific;  Director for Marketing, Covetella, Kamana Bhaskaran and Dione Song.Chief Commercial Officer of Love, Bonito included using gamification, focusing on real people for interactions, and including the offline stage.

Warren Hayashi, President, Asia Pacific for Adyen, introduced the concept of unified commerce, sometimes called O2O, or offline to online.

Augmented reality is changing the retail experience, says Chris Bell, Commercial Director, APAC, Blippar.

Oreos souped up with augmented reality in the personalised Oreo Music-Box campaign with Alibaba helped Mondelez stay true to the brand while attracting Millennials, said Ganesh Kashyap, Senior Director, Mondelez International. The campaign broke all records, attracting 200 MM+ (million-plus) consumers in 12 hours and attracted 90% more new Millennial consumers to the brand.

Amit Bansal, Accenture MD and Analytics and AI Delivery Leader, plays devil advocate in asking whether established brands can really go digital. For him, artificial intelligence (AI) is the new user interface (UI).

Kayak Chief Commercial Officer Debby Soo profiles the Millennial traveller in the region: 54% will check flight prices before they book, and 65% are frustrated seeing lower flight prices after they have booked. 

Richard Heath, Executive Director, and Chi Wei Teo, Group Account Director from Kantar Millward Brown look at common demands across consumers in Gen X, Y and Z. Everyone is moved by the right content, they say.

Chatbots will bring new meaning to commerce. Beniot Lavaud, Global Head of Digital, Bluebell Group; Head of Marketing for Nguyen Kim Trading Long Tran and Marcus Tan, CEO and Co-founder, AIQ say 85% of transactions will require no human interaction by 2020, even though brands will need to engage with customers on a 360 basis.

The Millennial 20/20 Summits focus at a unique time in the industry, where brands and retailers are dealing with a more-complex and ever-evolving consumer that requires them to think of innovation, disruption and technology as key components of their future. The event series looks to address this like no other event series has done before through a curated experience of multiple conference stages, immersive and experiential showcases and organised networking experiences.

Each of the regional summits look into the future of next-generation commerce from the perspective of a digitally savvy consumer with a micro-focus on key pillars that include: retail, marketing, mobile, payments, video, social, e-commerce, customer relationship management (CRM), advertising, big data, virtual reality, augmented reality, voice, Blockchain and AI. The multiple conference stages are run with industry specific tracks including retail, e-commerce, marketing & advertising, innovation, travel & hospitality, food & beverage, finance and fashion & beauty.

Explore:

The 2018 Summit will take place again at the ArtScience Museum in Singapore on 3 and 4 October 2018. Email Millennial 20/20 at team at millennial20-20.com to participate in 2018.

Hashtag: #M2020

Epson sponsors photography exhibition on Korean divers in Singapore

Source: Epson Singapore. HAENYO SINGAPORE will be on show in Singaopre
till 23 November.

Epson Singapore is the official print sponsor for Singapore-based French professional photographer Jose Jeuland's first-ever photography exhibition on haenyo (해녀), female divers from Jeju Island, South Korea at The Fullerton Hotel, Singapore. Epson is supporting the exhibition with prints produced by one of its commercial and industrial photographic production printers.

HAENYEO SINGAPORE is a collection of portraits of haenyo printed using the Epson SureColor 64" SC-P20070 with UltraChrome PRO Pigment Ink, on Epson’s Signature Worthy Hot Press Bright paper, which is designed for fine art use.

Tan May Lin, GM, Sales, Marketing and Customer Service Division, Epson Singapore said, “Epson Singapore is proud to be the official print sponsor for Jose’s first ever photography exhibition in Singapore. Jose has captured wonderfully compelling stories that bring the raw emotions of the haenyo sea women to life. With Epson’s photo graphic production printers, we’re excited that our unique combination of Epson’s printhead technology and UltraChrome PRO archival ink technology can help deliver the very best representation of his artworks in final print format.”

As the official print sponsor for HAENYEO SINGAPORE, Epson's professional printing technology aims to enable visitors to experience haenyo portraits and their story of hardship in a visually stunning way.

Jeuland said, "I am thankful for Epson's support as I launch my first-ever photography exhibition here in Singapore. Epson's unique printing technology accentuates the key features of the haenyeo as seen from the photographs at the exhibition. This in turn portrays the raw emotions of these women of great fortitude. With Epson's support, I am happy to share the inspiring story of the Haenyeo women-divers from Jeju, Korea."

The exhibition-quality prints were created with Epson’s UltraChrome PRO nine-colour pigment ink system on Epson’s 64" SureColor SC-P20070 printer. The system supports an extended colour gamut and four levels of black, and advanced PrecisionCore MicroTFP printhead technology to develop vibrant prints with lasting durability.

Used with Epson’s Signature Worthy media, this printing technology produces exceptional colour gamut and high maximum density (D-Max), offering photographic-quality prints.

Details:

HAENYEO SINGAPORE
Till 23 November 2017
East Garden Foyer, The Fullerton Hotel Singapore
Admission is free 

Banking and investment services CIOs see digitalisation as a priority

Banking and investment services CIOs are increasingly convinced that their old business models and existing value propositions will not be sustainable in the future, according to a survey from Gartner. Gartner’s 2018 CIO Agenda Survey gathered data from 3,160 CIO respondents in 98 countries and across major industries, including 354 banking and investment services CIOs.

When it comes to strategic business priorities, the survey found that digital business/digital transformation is more important for banking (first priority for 26% of respondents) than for all industries (17%). Just behind digitalisation at 25%, growth/market share is a further key priority. This is followed by the complementary focus areas of profit improvement and customer focus (12% and 11% respectively).

Banking and investment services CIOs also place a relatively high priority on the globalisation of their businesses (7%), a priority which does not make the top 10 at all for the all-industries average. Geographic expansion is clearly important for a business that is both easier to scale over physical distances using electronic movements of money, and seeking higher growth in emerging markets.

In response to the question ‘Which technology areas do you think are most important to helping your organisation differentiate and win (achieve your mission)?’ Business intelligence (BI)/analytics topped the list with banking sector CIOs at 26% followed by digitalisation/digital marketing at 21%.

In terms of differentiating technologies, four categories stand out when compared to other industries:

- Artificial intelligence (AI) is seen as more differentiating (8%) for banking than the all-industries average (5%).

- The combination of application programming interfaces (APIs) at 4% and omnichannel/multichannel technologies at 3% are not especially high, but they are not present at all in the all-industries top 10.

- Legacy modernisation is a top 10 item for the banking industry, but not present in the all-industries list.

- The Internet of Things (IoT) is a top-10 item for all industries (6%), but is not present for banking and investment services.

- Blockchain does not feature in the list, as it ranked 20th for banking and investment services. Despite the attention and visibility, it is not yet seen as a differentiating technology for banks.

"Digital transformation and its related technologies such as APIs are more important for banking than for other industries,” said Pete Redshaw, Managing VP, Gartner. “Banks and other banking and investment services organisations clearly recognise that the status quo is not sustainable, and they must disrupt themselves before it is done to them."

Redshaw added: "These priorities point to a continuing tension between two opposing forces. On the one hand, there is a need to rapidly transform the business, while, on the other hand, there is the innate inertia that arises from a huge IT estate that supports a heavily regulated industry."

Figure 1. Top Tech to Win

Rank		Banking/Investment Priorities		% Respondents
1		BI/analytics		26%
2		Digitalisation/digital marketing		21%
3		Mobility/mobile applications		11%
4		Artificial intelligence		8%
5		Cloud services/solutions		8%
6		Legacy modernisation		4%
7		Application programming interfaces		4%
8		Customer relationship management		4%
9		Automation		3%
10		Omnichannel/multichannel		3%

Source: Gartner (October 2017)

Planned additional spend on digitalisation/digital marketing is also much more prominent in the banking and investment services sector (22%) than the all-industries average (12%).

"This is an industry that recognises that a firm must become truly digital - in culture, value and technology - if it is to stand a chance of surviving and thriving," Redshaw said.

Cloud is ranked lower in the banking sector (fourth versus second for all industries) but has the same percentage assigned to it (13%). Banks would like to make more use of public cloud, but are held back by their risk-averse culture and their regulators.

For AI, there is only a small difference in absolute terms between banking and all industries, but it is a large one in relative terms (7% versus 4% — nearly double). Being able to turn raw data into actionable information by spotting unexpected patterns or developing superior algorithms will strongly differentiate banks that do this well from their more mediocre rivals.

Figure 2. Top New Tech Spending

Rank	Banking/Investment Priorities	% Respondents
1	Digitalisation/digital marketing	22%
2	BI/analytics	18%
3	Cyber/information security	13%
4	Cloud services/solution	13%
5	Data management	10%
6	Mobility/mobile applications	9%
7	Networking, voice/data communications	7%
8	Infrastructure/data centre	7%
9	Artificial intelligence/machine learning	7%
10	System/process information	7%

Source: Gartner (October 2017)

 

Explore:

Buy the 2018 CIO Agenda: Banking and Investment Services Industry Insights report

Unstoppable Rex game channels traffic to YuuZoo's social commerce platforms

Source: YuuZoo. Unstoppable Rex has become a top mobile game in months.

Unstoppable Rex, a mobile game officially launched on 23 September 2017, has reached the No. 1 position in Hong Kong in the action games and overall games categories. 

Developed by Sandbox Global and marketed by Singapore Exchange-listed YuuZoo Corporation, the free-to-play runner mobile game has been downloaded over 186,000 times since its soft launch in July. It has generated an average per paying user (ARPPU) of US$23 of revenue, with the game seeing around 1,960 new users per day and one-day retention of 48%, versus an industry average of around 30%. 

Set in a futuristic world, Rex is a Tyrannosaurus Rex that has been enhanced with grabbers by scientists in a laboratory. The goal is to help him escape from his containment tube and rampage through the city outside. Social and e-commerce features in the game have allowed YuuZoo to draw users to its many social commerce verticals, allowing users to browse the marketplace and make purchases.

Since its release, Unstoppable Rex has been featured on the App Store under the categories New Games We Love and New Indie Games We Love across Southeast Asia. The game has most of its downloads in Vietnam, followed by Thailand, the Philippines, Malaysia, Indonesia and Singapore.

“Games are one of the central pillars in YuuZoo’s business model and we place great emphasis on developing exciting games through our platform. We are delighted about our partnership with Sandbox Global, and the success that our games have seen so far,” commented Chong Siong, Group Head of Marketing and MD, YuuZoo Thailand.

Malaysia's 2018 Budget reflects push towards fourth industrial revolution

Source: Malaysia Economic Report. Information and Communication Index.

According to Malaysia's Economic Report for the year the information and communication subsector is expected to sustain its strong growth momentum, expanding 8.5% in 2017 (2016: 8.1%) supported by the launching of latest smartphone models, price reductions on earlier premium models and an increase in subscriptions to value added services offered by telecommunication companies.

The subsector recorded growth of 8.3% in the first half of 2017 (January-June 2016: 8.6%). The communication segment remained as the major contributor to growth, growing at 9.3% (January-June 2016: 9.8%) following aggressive promotional activities by telecommunication companies and introduction of new telephone models. Meanwhile, the information segment grew 5.7% (January - June 2016: 3.6%) and computer services rose 6.4% (January-June 2016: 7%).

The figures were released in conjunction with the announcement of Malaysia's 2018 Budget. Delivered by YAB Dato' Sri Mohd Najib Tun Haji Abdul Razak, PM and Minister of Finance of Malaysia, Budget 2018 is themed Prospering An Inclusive Economy, Balancing Between Worldly And Hereafter, For The Wellbeing Of Rakyat, Towards TN50 Aspiration. Transformasi Nasional 2050 or TN50 is Malaysia's national transformation strategy between 2020 and 2050 to become one of the top 20 countries in the world, introduced in the Budget last year, and the rakyat refers to the ordinary people of Malaysia.

PM Najib shared that Malaysia aims to:

- Become a high-income advanced economy in 2020;

- Record RM2 trillion of economy and trade value by 2025;

- Benefit from its fourth industrial revolution initiative IR 4.0 by 2030;

- Have a more competitive workforce with nearly zero defects by 2040; and

- Rank among the top 20 advanced countries in the world

The government will continue to focus on infrastructure and socioeconomic development, especially for industries related to petroleum, logistics, aerospace, rail, robotics and automation, and export-oriented industries.

The 2018 Budget, which will be active over an election year, has something for everyone. Some of the projects announced include:

- RM170 million to upgrade ICT equipment for public safety purposes. This includes  upgrading the Royal Malaysia Police's (PDRM's) 1PDRMnet system. Another RM100 million will be used to upgrade its communication systems.

- RM1 billion through Malaysia Communications and Multimedia Commission (MCMC) to develop communication infrastructures and broadband facilities in Sabah and Sarawak;

- RM672 million for electricity supply in rural areas, including RM620 million for Sabah and Sarawak, benefitting 10,000 rural homes.

- RM5 billion under the Green Technology Financing Scheme to promote investment in green technology industry;

- The government will also promote a cashless society and economy through effective employment of foreign workers. The migration from signature-based payment cards to more secure PIN-based payments was enforced from 1 July 2017. Beginning 2018, Bank Negara Malaysia will monitor salary payment through local bank accounts for foreign workers, excluding domestic helpers.

Skills acquisition for a future world

RM250 million is allocated for educational projects, including:

- A new science, technology, engineering and mathematics (STEM) centre to develop the latest learning methods to train STEM specialist teachers. The centre will leverage existing facilities at teachers training institutes in collaboration with the Academy of Science Malaysia;

Enhanced computer science modules including a coding programme in primary and secondary school curriculums, which currently exist in form one to three, the lower secondary classes, where students are typically aged 13 to 15;

Allocate a sum of RM190 million to upgrade 2,000 classes into 21st Century Smart Classrooms to enhance creative-based learning and innovative thinking.

Encouraging venture capital funding

The government supports venture capital activities:

- RM1 billion from major institutional investors for investment in venture capital in main selected sectors will be coordinated by the Securities Commission (SC);

- Income tax exemption will now include management and performance fees received by venture capital management companies, effective from year of assessment 2018 to 2022;

- A proposed cut in the minimum investment in venture companies from 70% to 50%, effective for the years of assessment 2018 to 2022;

- Companies or individuals investing in venture capital companies will enjoy tax deductions equivalent to the amount of the investment made in the venture companies, limited to a maximum of RM20 million annually; and

- Income tax exemption incentives are now extended to 31 December 2020 for angel investors, limited to the amount invested in venture companies.

National Blue Ocean Shift (NBOS)

PM Najib said NBOS will be implemented at a faster pace, at a low cost with high impact. The NBOS uses Blue Ocean Strategy techniques to accelerate change.

For 2018, RM300 million is earmarked to implement NBOS programmes, including construction of new UTCs, a Blue Ocean Entrepreneur Township, a mobile community transformation centre (CTC), entrepreneurship programmes, a Global Entrepreneurship Community as well as inclusive and vibrant social entrepreneurs. CTCs bring information and services as well as entrepreneurial opportunities to locals where no transformation centres currently exist.

Fourth industrial revolution

- The government will implement the Malaysia Digital Policy, under which matching grants worth RM245 million will be given under the Domestic Investment Strategic Fund to upgrade smart manufacturing facilities.

- There will also be a centre in Cyberjaya, Selangor to be revamped as a one-stop centre for corporate companies and universities to develop prototype products and elevate innovation.

More tax incentives are now available:

- An extended incentive period on the accelerated capital allowance of 200% on automation equipment from year of assessment 2018 to year of assessment 2020;

An extended incentive period for the accelerated capital allowance of 200% for manufacturing and manufacturing-related services sectors; and

A capital allowance for ICT equipment, which includes spending on computer software development, is claimable for the period of four years beginning year of assessment 2018 to 2020, including for SMEs. 

Digital Free Trade Zone
 
Malaysia will be the first in the world outside China to establish a Digital Free Trade Zone (DFTZ) that comprises an e-Fulfilment Hub, Satellite Services Hub and e-Service Platform to stimulate growth in electronic trade, PM Najib said. The DFTZ, announced 22 March 2017, will transform KLIA as the regional gateway, and encouraged development in the e-wallet market in Malaysia. Ant Financial Services Group, the operator of Alipay, has collaborated with Touch 'n Go to transform the payment landscape.

The first phase of the DFTZ aims for 1,500 SMEs to participate in the digital economy and is expected to attract RM700 million worth of investment and create 2,500 job opportunities. In conjunction with this move, the government will:

- Provide RM83.5 million to construct infrastructure for the first phase of DFTZ in Aeropolis, at the Kuala Lumpur International Airport (KLIA); and

- Increase the minimum value for imports from RM500 to RM800 to establish Malaysia as a regional e-commerce hub.

To maintain an ecosystem conducive to innovation the government will also expand the regulatory sandbox approach to facilitate companies to test new ideas and business models.

Income-generating opportunities in a digital world

- RM100 million to expand eRezeki, eUsahawan and the eLadang Programmes under the Malaysia Digital Economy Corporation (MDEC). The eRezeki initiative helps individuals become part of the online workforce; eUsahawan exposes Malaysian youth and micro entrepreneurs to digital entrepreneurship; while eLadang is a new programme around smart agriculture; and

- In line with IR 4.0, all registered taxi drivers who wish to shift to work for e-hailing companies can draw on a grant amounting to RM5,000 towards the purchase of a new car.


When it comes to capital market measures, the Digital Investment Management Framework, introduced by the Securities Commission of Malaysia in May 2017, sets out licensing and conduct requirements for offering automated discretionary portfolio management services to investors (robo-advisor services). Requirements include:

• Technology capabilities in place including identification of a competent person within the company who has sufficient understanding of the risks and rules of the algorithm applied; 
• A risk management framework that is sufficiently robust to manage risks associated with the offering of automated discretionary portfolio management services including cyber security resilience; 
• The outcomes produced by the algorithm are consistent with the digital investment manager’s strategy; and 
• Written policies are in place to monitor and regularly test the algorithm employed.

Datuk Yasmin Mahmood, CEO, MDEC commented in a blog post, "We are delighted that Budget 2018 is focused on accelerating growth and enhancing the wellbeing of the rakyat as well as in further enhancing Digital Malaysia. The digital economy continues to be a key driver of growth, contributing some 18.2% of Malaysia’s GDP this year, and expected to exceed the projected target of 20% earlier than 2020."

Datuk Yasmin added that the RM100 million allocation for the eRezeki and eUsahawan programmes will ensure that the digital economy continues to be inclusive for the well-being of the rakyat, and in particular the B40 and M40 groups.

"With both programmes going into their third year, we estimate that 150,000 rakyat would be trained in 2018; resulting in 341,745 rakyat participating in both programmes with an estimated total income and revenue of RM544 million according to calculations," she said in the MDEC blog.

"We are also pleased to note that digital inclusivity has also been extended to a new flagship initiative called eLadang to encourage farmers to leverage the latest smart farming technologies (such as IoT [the Internet of Things] and BDA [big data anaytics]) to improve yield and pendapatan (income)."

MDEC is also pleased with initiatives around education of the TN50 generation, as "this would ensure Malaysia’s students have exposure to the #mydigitalmaker education initiative launched last year."

Datuk Yasmin explained that #mydigitalmaker is a joint public-private-academia initiative with the aim of transforming the youth community from being users of digital innovation to producers or digital innovators. "This includes skills such as coding, app development, robotics, embedded programming and creative technology; all of which will ultimately help to strengthen problem-solving and creativity amongst our future generation," she said.

"Our forecast reveals that we need 1 million digital workers, such as coders, application developers and software engineers, by 2025. With the continuous emphasis on talent development for the future of work, this is indeed encouraging for Malaysia to continue nurturing our bright young talent."

Datuk Yasmin also commented on the measures to encourage more venture capital activities. "This is a visionary stance by the Malaysian government as the startup ecosystem is the job creators of the future. We introduced two highly successful initiatives last year*, the first being the Malaysia Digital Hub initiative that supports startups and communities while creating greater opportunities for them to connect to the ASEAN and global digital ecosystem; and secondly, the Malaysia Tech Entrepreneur Programme (MTEP) – an initiative by the Malaysian Government that aims to attract global technopreneurs and help them to realise their fullest potential out of Malaysia and to scale their businesses regionally and globally," she said.

Malaysia Digital Hub supports tech and digital co-working spaces, their startups and communities with support from the government. Growing startups, global tech companies, accelerators as well as talent builders and investors are targeted with incentives such as coaching and mentorship, access to funding, and freedom of ownership for foreign companies.

The MTEP is focused on attracting gifted and ambitious individuals from all over the world, and helping them to kickstart their startups in Malaysia. Under the MTEP, both new and established entrepreneurs can apply to set up a startup in Malaysia, with the application process to take up to 21 days.

With regards to initiatives around IR 4.0 and the digital economy such as smart manufacturing she said: "These moves stem from the reality today that, in a hyperconnected world, it is becoming abundantly clear that artificial intelligence (or AI) is the defining force of the fourth industrial revolution. AI is the natural progression from data analytics, and as such, Malaysia should start looking at developing a National AI Framework. This will then be an expansion of the National BDA (big data analytics) Framework. AI is the 'game changer' for the fourth industrial revolution," she said.

Datuk Yasmin also called the new digital free trade zone a game changer. "DFTZ is proving to be a massive game changer for Malaysia which will see Malaysia’s SMEs doubling exports, and establish Malaysia as a regional transshipment hub for e-commerce logistics while creating 60,000 jobs by 2025," she said.

"I am happy to say that the DFTZ will 'go live' on 3 November and 1,900 export-ready SMEs will be flagged off to begin their export journey. This is an encouraging number of SMEs as our previous target was 1,500 SMEs.

"For the first time, the world will see a physical and virtual zones with additional online and digital services to facilitate cross border e-commerce and invigorate internet based-innovation."

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Read the text of the 2018 Budget speech

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*Datuk Yasmin is referring to the fiscal rather than the calendar year. Both initiatives were introduced in April 2017, the previous fiscal year.