With the development strategy of Post COVID-Development Strategy (PCDS) 2030 becoming more active in Sarawak, the ideal situation where the state would move towards achieving an economic status of high-income and developed nation not only requires massive infrastructure projects but also the evolution of its local business environment. The recent directive by Datuk Patinggi Tan Sri (Dr) Abang Johari to local suppliers to excel, innovate, and digitalize is a necessity to build a global supply chain.

With the help of advanced digital technologies and focusing on achieving operational excellence, local businesses will be able to overcome their limitations and emerge as vital members in the region. It is crucial for Sarawak, which makes use of its natural endowments to establish itself as a leader in terms of renewable energy in ASEAN.

Given that the foreign investments pouring into the state are indeed valuable, the local suppliers have no choice but to meet the international standards of collaboration. Indeed, the professionalization and digitalization of businesses in Sarawak will not only help realize the objectives by 2030 but will further facilitate the process.

Fast-paced development

It is worth mentioning that the Premier emphasized the need to take into account the fact that Sarawak's fast-paced development and its role in the renewable energy sector should result in vendors moving beyond the local borders of the state. In order to become competitive enough both at the regional and global levels, there are a number of important strategic objectives that businesses in Sarawak have to pursue.

Thus, businesses have to go digital through the use of e-commerce and social networking services. Moreover, the Premier urged locals to speak international languages, namely English and Mandarin in order to build up networks and establish communications.

Sarawak’s journey towards economic prominence can be attributed to the effective collaboration of the state government, government-related bodies, and the private sector.

The result of this partnership has made it possible for Sarawak to attain the status of a high-income state for four successive years by beating its 2030 development targets.

While moving away from dependency on the exploitation of its natural resources, Sarawak is focusing on building a world-class economy through strong institutions,
well-equipped labour force, and healthy business ecosystems. In order to continue with this trend, the state plans to focus on future industries including but not limited to artificial intelligence, satellite technology, and semiconductor industry considering that data forms the basis of the new digital world economy.

Need to compete in the digital world

Under the Post COVID 19 Development Strategy (PCDS) 2030, the government will continue with efforts to enhance human capital, develop SMEs, and improve energy and digital infrastructure. With the continued evolution of Sarawak, there is a need to push local vendors to update themselves and adopt artificial intelligence in order to be able to compete in the digital world economy.

In striving for economic success, Sarawak is keen on developing a first-class vendor community, which will guarantee that its industrial plans are accompanied by an advanced and efficient logistics chain. Being focused on working with service providers, Sarawak is ensuring that there is no discrepancy between massive industrial projects and local logistics facilities needed for their support.

This approach is supported by three competitive advantages including a developed logistics system, digital transformation, and energy excellence. The combination of all the factors mentioned above creates synergy, which increases the level of productivity and efficiency of the process. In summary, all the aspects discussed above indicate that
Sarawak is aiming at overcoming regional limitations and becoming a strong economic and energy force in Asia.

SMEs at crossroads

Given that the world is moving towards sustainability in its economic practices, SMEs are at a crossroads. Though they are key players in this process of change, SMEs are beset by certain structural challenges, mainly “the resource gap.” Unlike their counterparts, SMEs lack the funding, expertise, and standardized systems that would enable them to monitor their carbon footprints and adhere to ESG (Environmental, Social and Governance) requirements as well as operate on a circular business model.

Moreover, their limited bargaining power in the supply chain means that they have to implement green practices at the demand of larger organizations, but lack financial backing and guidance to implement such changes.

Digitizing business processes

In order to address these challenges, the SMEs need to evolve from treating sustainability merely as a compliance issue to seeing it as an important strategic consideration for future competitiveness.

In terms of reduction, it involves the use of “low-hanging fruits”, which would be digitizing their business processes to cut down on their energy usage and waste, which is a cost-effective approach at the same time.

Cooperation is important here too; as the SMEs would be able to pool their resources together in industry clusters or peer cooperatives or even supply chains in order to cover the cost of green technologies and certification. In addition, the use of government-sponsored green financing incentives and digital platforms can play a part in bridging the technological gap.