Digital transformation rides high on the leadership agenda of the many Covid-19 pandemic tales being written up these days. The global Islamic economy is also evolving with technology playing a more crucial role in the quest for survival and laying the seeds of recovery.
While there are various valuations linked to different ways of addressing the size of the global Islamic economy, the 2019/20 Global Islamic Economy Report estimates that Muslims spent some US$2.2 trillion in 2018 on halal food, pharmaceutical and lifestyle products.
With the focus on current digital transformation issues, thought leaders today (13 May 2020) came together in a webinar on 13 May 2020, organised by UK-headquartered IslamicMarkets to share ideas on the continued evolution of the global Islamic economy.
Moderated by Co-Founder and Principal Elipses Abdul Haseeb Basit, the panel featured the national postal service Pos Malaysia Chairman Datuk Yasmin Mahmood who is also Advisor to artificial intelligence (AI) ecosystem player Skymind Global, and RFI Foundation Vice Chairman, Board of Trustees, Dr Sayd Farook whose work includes advising on strategy and foresight at the Executive Office of the Vice President and Prime Minister of the United Arab Emirates (UAE) and Ruler of Dubai.
In recent years, the digital economy has emerged steadily as an economic force. For example, according to the Department of Statistics Malaysia (DOSM) digital economy growth, which had grown 9% annually between 2010 to 2016, is way faster than overall GDP growth. Having reached a contribution of 18.5% to the overall economy in 2018, an accelerated adoption of digital culture is being touted as an important economic catalyst especially in the current the health crisis by the Malaysian government.
Similarly, the UAE reportedly emerged as a leading digital economy with 18% share of the Gulf region’s overall economy. The volume of the digital economy in the Middle East closed on US$30 billion by the end of 2018 and was increasing at some 30% before the pandemic.
Challenges coming under the spotlight in the current health crisis include societal and policy disconnects. The panellists also detailed forthcoming challenges such as the impact on inflation, reduced economic growth, and a less resilient economy to face further challenges.
“Incentives for transformation can come from bottom-up and top-down,” said Abdul in his introduction.
“Areas needing to be addressed include macro areas such as inequality as seen in the health and financial sectors. On a micro level, we need to develop areas, including humanitarian projects, greater financial inclusion, and sustainability across multiple sectors.”
As an industry veteran, Yasmin held that innovation and reshaping existing models formed a large part of the work of moving forward in digital transformation – both within the current crisis, and the coming post Covid-19 world.
“There has been a compelling proposition for pervasive digitalisation prior to the pandemic. The pandemic has forced the biggest ever super boost to digital adoption,” added Yasmin, who was formerly the CEO of Malaysia Digital Economy Corporation in its transformational years as a leading digitalisation agency, and also Microsoft Malaysia’s Managing Director during the company’s “Golden Era” in Malaysia from 2006 to 2010.
Pointing to one potential silver lining of the pandemic as a ‘super booster’ for digitalisation, Yasmin detailed various examples of ‘boosted adoption’ which embrace different sectors in Malaysia’s daily working and social life. These technologies include the sudden boom in the adoption of the video conferencing apps such as Microsoft Teams and Zoom in both social and business scenarios.
“Post-pandemic, we will see a much-needed adoption of other digitalised areas such as eCommerce,” she further added. “We have seen the coming of age of eCommerce in the last few weeks including Malaysia’s example of digital bazaar Ramadan to comply with social distancing rules under the current restricted movement order (a form of lockdown). It is a sound logistical delivery system which also adheres to social distancing measures, and completes the order cycle – while keeping everyone safe. “
“When we fast forward to today, financial services has taken a huge leap forward with the Islamic Digital Economy initiative,” said Yasmin.
Dr Farook said UAE’s digital story follows a similar evolution, thanks to active encouragement from the UAE government, have yielded some positive results. “Grocery aggregators, for example, have multiplied their business by at least 4 to 5 times. Pivoting to the new demand is driving digital transformation.”
“Last year, we said we should have a doctor for every citizen,” he continued. “We have even seen startups use their agility to get clinics and smaller hospitals online. In a crisis, we need rapid experimentation in teams and addressing use cases. “
He agreed with Yasmin that disruption would continue to accelerate the healthcare, financial services and education verticals, among others. Commenting on Islamic banks, Dr Farook said that they are already embarking on digital transformation programs in the UK.
Imagineering the future
Many roles will be disrupted, he further stressed. Both speakers agreed that there needed to be a global wave of nationwide reselling and relevant programs to prepare for the digital era.
Assuming that there will be no return to the ‘old normal,’ Yasmin reiterated: “The pandemic has turned out to be a catalyst in changes that needed to be made. I foresee AI becoming embedded into every role of the future. China’s control of the pandemic can also be attributed to the use of big data – both on cloud and on-premise.”
Innovation married to frontier technologies was already at the forefront in the pre-pandemic days. In 2019, this wave is making headway into different sectors including healthcare during the current pandemic. In the new normal, many roles that no longer need to be physical will become digitalized.
However, it is the nurturing of ecosystems through increased funding and innovation that will help smooth the way forward.
Private-public collaboration has quietly built up Malaysia as a leading Islamic Digital Economy (IDE) hub, said Yasmin. Since 2017, MDEC has been encouraging a fusion of talents, investment, with other factors needed to build a major centre, and which has been recognised in various studies including as a top Islamic Economy in Islamic finance.
On a wider front, the discussion moved towards the consensus that now was the time for reviewing the future of work, of different models reshaping how we do work and live and behave.
“Even before the pandemic, over the past two decades, the world has witnessed revolutionary changes in how consumers and businesses connect through technology,” Yasmin commented. “Today, we stand amid a technological revolution that has the potential to fundamentally shift the way we live, work, and relate to each other.”