DE-CIX Malaysia, Digital Penang revolutionise digital connectivity: Penang IX launches as the new hub for Internet Data Exchange

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Initiative aligns with broader digital transformation strategy for Penang
Plans to launch a new internet exchange at the Malaysia-Thailand border in 2024

DE-CIX Malaysia and Digital Penang have successfully launched the Penang IX powered by DE-CIX (PIX), an initiative aimed to reshape the digital landscape of the region. As a central hub for…Continue Reading

Hitachi court petition to wind up Fusionex, reveal grim picture of alleged unethical and irresponsible conduct by Ivan Teh and his senior leadership

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Great depth of detail of all irregularities and alleged wrongdoings
Suspicious transactions to V-Circle, Convedge for ‘development costs’

Despite it being the Christmas/year-end period when many corporate leaders take a break, tech CEOs, some as far away as in Chile, bombarded me with questions when Malaysian business weekly, The Edge, broke the story on…Continue Reading

East Ventures consistently races in the perfect storm: 2023 recap & 2024 outlook

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90% of growth-stage startups: 30% on path to profitability, 60% profitable & 10% adapting
Anticipate SEA digital economy is well-positioned to excel in the next economic recovery cycle

The tech industry weathered an intense “perfect storm” of crises these past two years. The global economy is in a complex state characterised by uncertainty, making caution…Continue Reading

In boost to investor confidence of social enterprises, Accelerate Global initiates buy back exercise at 20% premium

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Build track record as purpose driven, investor friendly social enterprise
Gearing up for next fundraising focusing on infra, community, human capital

Ending 2023 on a high note, youth-led social enterprise Accelerate Global Sdn Bhd, which in Nov 2021 raised US$102,400 (RM470,000) from 69 investors via equity crowdfunding with Ethis Malaysia, stayed true to…Continue Reading

How Japan is willingly ceding the future to China

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TOKYO — The next blow to the collective Japanese psyche will be falling behind Germany to become the fourth-biggest economy. Yet, 12 years on, Tokyo is still grappling with having watched China surpass it in gross domestic product terms.

It was in 2010 and 2011 that banner headlines proclaimed the changing of the guard, when the economic student amassed greater power than the teacher. China, like South Korea, Taiwan, Thailand and other Asian “tigers,” cribbed from parts of Japan’s development model.

Why, then, is Japan’s fiercely proud political establishment making it so easy for China to continue to throttle forward?

Many Japan pundits disagree with the terms of this debate vehemently. The force is strong with the conventional wisdom, which is that GDP matters far less than per capita income – a metric on which Japan blows the doors off China.

And, clearly, Chinese leader Xi Jinping has shot his economy in the foot enough times to slow progress. From disruptive crackdowns on tech to draconian Covid lockdowns, Xi has generated more headwinds than tailwinds since 2020.

Yet many global investors and academics can’t help but wonder what, oh what, Japanese Prime Minister Fumio Kishida’s Liberal Democratic Party is up to as Asia’s economic clock speeds up and China raises its game.

In 2013, the LDP returned to power with a bold plan to get Japan’s economic groove back. At the time, Prime Minister Shinzo Abe made unveiled references to reminding China whose continent Asia is.

Sadly, his pledges – to reduce bureaucracy, increase innovation and productivity, liberalize labor markets, incentivize a startup boom, empower women, attract more foreign talent and give Shanghai a run for its money as Asia’s financial center – fell by the wayside.

Although Abe succeeded in strengthening corporate governance a bit, the dearth of reforms elsewhere stunted wage growth. Hopes for a virtuous cycle of fattened paychecks and a surge in domestic demand never materialized.

The reason is that Abe relied almost entirely on aggressive monetary easing to save the day. A 30% plunge in the yen in the years after 2013 generated record corporate profits. The trouble is, it deadened Japan’s competitive drive, too.

Weaker exchange rates took the onus off corporate chieftains to innovate, restructure and take risks. Politicians had no need to recalibrate engines toward domestic demand-led growth and away from a 1970s-like export-centric model.

Rather than delivering a shock to an atrophied economic system, Abenomics cemented its flaws. Japan effectively squandered the last 10 years during which it had a window of opportunity to narrow the gap with China. Hence the confusion among investors and academics about what Abe’s protégé, Kishida, is up to with regard to raising Japan’s own economic game.

The late former Prime Minister Shinzo Abe and his protégé Fumio Kishida, the current premier. Photo: Screengrab / Al Jazeera

Kishida started off well enough in October 2021. He rose to the premiership with his own ambitious “new capitalism” scheme to raise middle-class incomes. Yet like his mentor’s plan, Kishidanomics has been far more aspiration than actual retooling.

These two-plus years were fertile for Kishida to alter tax policy to encourage startup activity. In fact, he had an audacious plan to tap Japan’s US$1.6 trillion Government Pension Investment Fund to finance startups.

It’s the most creative idea the LDP has had to date to jumpstart the growth of Japan’s venture capital industry. Little has come of it, though. Kishida has prioritized fiscal stimulus and Bank of Japan easing over structural reform.

Nor has Kishida reinvigorated the unfinished Abe reforms. In the interim, China’s slowdown and the highest US bond yields in 17 years turned the tables on Japan’s post-pandemic recovery. The economy shrank 2.9% in the July-September period from the previous quarter.

There’s little in recent data to suggest the economy has gained any steam in the October-December quarter. This means Kishida will be even more preoccupied than usual, and less likely to resurrect the reform process.

This downshift also reduces the odds that BOJ will be “tapering” or normalizing rate policy anytime soon. If BOJ Governor Kazuo Ueda wasn’t comfortable pivoting away from quantitative easing in 2023, the odds may be even lower amid a deepening recession.

All this means Japan’s “opportunity cost” problem persists. When government after government chooses the easy way to boost growth, they’re choosing not to build economic muscle. This has been the trade-off the LDP accepted for decades, but especially these last 10 years.

Image: Hedgeye

If only Abe had made good use of his nearly eight years in office to remake the economy instead of relying on a weak yen, Japan might be booming. If only Abe’s successor Yoshihide Suga had used his 12 months in office to reanimate Japan’s animal spirits. Or if Kishida hadn’t let 26 months pass without putting any major upgrades on the scoreboard.

Now, with his approval rating at 17%, Kishida has negligible political capital to shake up the economy. As scandals engulf the LDP and opposition parties pounce, Kishida will be too busy in 2024 struggling to keep his job to do it.

As reform hopes fade, China has even freer reign over Asia’s future. For all China’s challenges, including a giant property crisis, the self-sabotage that Japanese politicians are inflicting on the economy plays right into Beijing’s hands.

Kishida is having to ramp up government spending to address the recession. This latest burst of borrowing is almost certain to pique the interest of credit rating companies like Moody’s Investors Service, which recently threatened to downgrade the US and China.

With a national debt more than twice GDP, Tokyo has limited fiscal space to act. This, in turn, will complicate Kishida’s plan to boost military spending by 50% over the next few years. Again, great news for Xi’s China as Tokyo’s security ambitions run into headwinds, too.

When investors and academics in Asia wonder why Japan thinks time is on its side, or what Kishida’s government is thinking, it’s a valid question. The longer Tokyo takes to answer it, the better it is for China’s ability to own the future.

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FIKRA ACE Accelerator 2023 picks Global Psytech and Pewarisan as winners

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Opportunity for cohort to run Proof-of-Concept projects with industry partners
Fikra Ace lays foundation for future innovation & collaboration in Islamic finance

FIKRA ACE, an extension of the Securities Commission Malaysia’s (SC) Islamic Capital Market (ICM) ecosystem efforts since 2021, is dedicated to advancing Islamic fintech through systematic approaches by identifying innovative fintech companies, supporting…Continue Reading

Sidec exposes 5 companies to cutting edge e-commerce with trip to Hangzhou

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Participants from Selangor e-Commerce Xccelerator Programme 2023
Exposure inspires a founder to change mindset from local/SEA to global

The Selangor Information Technology and Digital Economy Corporation (Sidec), recently concluded an overseas trip, part of the Selangor E-Commerce Xccelerator Programme 2023 (ECX23). Taking place from 3 to 9 Dec, five companies from the programme took…Continue Reading

Boosting employment growth in India

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Over the years, India has undergone notable shifts in its employment dynamics within its vast and diverse economy. The evolving employment landscape is witnessing significant growth potential in numerous sectors.

India’s unemployment situation has shown fluctuations in recent years. This October, the unemployment rate rose to a two-year high of 10.09%. This increase is primarily attributed to rising joblessness in rural areas.

However, it is worth noting that in the period from July 2022 to June 2023, the unemployment rate for individuals aged 15 years and above reached a six-year low of 3.2%, indicating a positive trend in specific periods. The long-term projection suggests a gradual decline, with an expected unemployment rate of around 7.50% in 2024 and 7.70% in 2025.

As India progresses on its economic development journey, the following opportunity sectors are anticipated to play a pivotal role in shaping its employment outlook.

India’s leadership in the Fourth Industrial Revolution (4IR) drives innovation and creates a demand for skilled professionals in software engineering, data science, and digital marketing. The digital economy is poised to generate 60 million to 65 million jobs by 2025, aligning with the global shift toward digitization.

The development of Industry 4.0 also brings about innovative marketing, creating new product opportunities. To meet these evolving needs, individuals must acquire industry-specific technical skills.

Financial sector

The expansion of the financial sector, fueled by increasing demand for banking and insurance services, generates substantial employment opportunities. Financial technology is pivotal in reshaping the industry, leveraging digital banking and technology integration in insurance to make significant contributions.

This transformation involves a digital shift, with non-bank entrepreneurs offering innovative customer-facing and back-office financial technology solutions, presenting both challenges and opportunities for the sector. The growth of fintech firms is expected to continue, presenting new technological opportunities and further shaping the future of financial services.

Health care

The health-care sector is experiencing substantial growth, and the hospital industry is anticipated to reach a value of US$132 billion this year. The key drivers behind this growth include the increasing elderly population, a growing awareness of health-care needs, and the integration of technology, particularly telemedicine, which enhances accessibility to health-care service facilitated by advanced technologies and remote medical services.

Tourism

India’s burgeoning tourism industry is witnessing substantial growth, presenting employment opportunities across diverse sectors. The hospitality services sector, valued at $23.5 billion, is projected to reach $29.61 billion by 2028.

Key areas offering employment prospects include hotel management, responding to the increased demand fueled by the thriving tourism industry, travel agencies playing a pivotal role in tourism, and the culinary arts sector benefiting from the anticipated 23% compound annual growth rate in culinary tourism from 2023 to 2033.

Retail

The retail sector in India is undergoing a substantial transformation, primarily driven by the ascent of e-commerce. E-commerce emerges as a pivotal player in this shift, with expectations of significant market growth.

The retail market is anticipated to reach a value of $2 trillion by 2032. The e-commerce boom is influencing retail dynamics and shaping logistics and supply-chain strategies, necessitating effective navigation of the intricate logistics landscape in the retail business.

Global Capability Centers

India’s Global Capability Centers (GCCs) are integral to the IT-enabled services sector, playing a pivotal role in shaping employment opportunities. Encompassing diverse domains such as customer support, IT consulting, finance, and accounting, these GCCs contribute to a broad employment landscape.

The trend of establishing new GCCs and expanding existing ones is noteworthy, with 18 new GCCs established in the first half of 2023 alone.

Energy sector

India’s advancements in renewable energy, particularly solar and wind power, present promising employment opportunities. The year 2022 witnessed a remarkable surge in renewable-energy jobs in India, totaling almost a million, with hydropower leading at 466,000 jobs and the solar industry alone adding 52,080 jobs, anticipating reaching 1 million jobs by 2030.

Globally, renewable-energy jobs reached 12.7 million in 2022, emphasizing a growth trend despite challenges, with India playing a significant role in contributing to the global clean-energy workforce.

E-shopping

The surge in online shopping drives significant job creation across diverse sectors, notably in logistics and delivery services, where increased demand creates opportunities for drivers, warehouse staff, and logistics professionals.

The thriving e-commerce landscape, particularly in India, also leads to expanded hiring across various professional roles, including marketing, technology, customer service, and operations within e-commerce companies.

MSMEs

Micro, small, and medium-sized enterprises play a crucial role in India’s economy, contributing more than 30% to GDP and providing essential employment. The MSME sector, comprising more than 63 million businesses, is considered the growth engine of India’s economic development, contributing significantly to GDP, exports, and employment generation.

Startups

India’s flourishing startup ecosystem, propelled by government policies and tax incentives, has substantially impacted job creation and global competitiveness.

Key points include the pivotal role of the Startup India initiative in fostering innovation and direct job generation. As the third-largest startup ecosystem globally, boasting about 50,000 startups with consistent annual growth, the sector attracts private capital, drives innovation, and significantly contributes to economic competitiveness.

In conclusion, India’s employment landscape is substantially transforming across various sectors, from digital services to a thriving startup ecosystem. With government initiatives and a dynamic workforce, India is well positioned for diverse and robust employment growth as it continues its vision of becoming the world’s third-largest economy by 2027-28.

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