Internet bigger slice of Malaysia’s GDP than US

(The Malaysian Insider) – A study by Google and McKinsey & Company has found that the internet has grown to become a major Malaysian industry and one that contributes more to GDP than US or China.

The report, “Online and Upcoming: The Internet’s Impact on Aspiring Countries” released today said that the internet contributed 4.1 per cent of Malaysia’s GDP in 2010 or US$9.75 billion (RM29.64 billion) out of US$238 billion.

This puts Malaysia among the highest of the fast 30 growing countries that the report highlights as crucial to the internet’s future.

Nimal Manuel, Principal at McKinsey & Company Malaysia said that the contribution to GDP included software and services as well as hardware.

Malaysia was ranked low in human capital however with just 505 R&D researchers per million people, as compared with 1,166 in fellow aspiring country Argentina and 5,615 in Japan.

The report also pointed out that domestic online consumption is below average where private consumption comprised 70 per cent of the internet’s impact in aspiring countries on average as compared to just 40 per cent for Malaysia.

“If policies are put in place to support financial and human capital development, including raising venture capital and R&D spending and lowering the cost of starting a business, the future of Malaysia’s internet ecosystem looks strong,” said Manuel.