SEIZING AGENTIC AI OPPORTUNITY IN M’SIA

 

Leading companies are moving beyond experimentation as a third of “AI future-built” firms have deployed agentic solutions and are demonstrating measurable value.

MALAYSIA stands at a critical inflection point in the global artificial intelligence (AI) race.

After the surge of generative AI, a new wave is emerging in the form of agentic AI.

Agentic AI are AI execution models involving autonomous agents that coordinate across workflows, tools and systems with minimal human input.

While it stops short of true autonomous decision-making, agentic AI’s ability to make actionable decisions within predefined parameters is a game changer.

Malaysia has a solid foundation to build on.

According to Boston Consultant Group’s AI Maturity Matrix, which benchmarks 73 economies globally on AI exposure and AI readiness, Malaysia is classified as a “steady contender”.

It places the nation just one tier behind AI pioneers such as the United States, the United Kingdom and China.

This position reflects Malaysia’s significant exposure to AI, particularly in large sectors like retail and wholesale, telecommunication and financial services.

At the same time, it indicates a solid level of AI readiness, supported by forward-looking ambitions, policies and regulatory frameworks on AI.

An evolving AI landscape

AI is rapidly becoming a critical national infrastructure that empowers wider opportunities.

As a result, geopolitical shifts, compute access and sovereign capability increasingly determine economic outcomes and geopolitical influence.

The US and China lead the global AI race.

Tech companies from these two superpowers created 59% and 26%, respectively, of top-performing large language models (LLM).

This presents a conundrum for competing nations.

Relying solely on external technology providers poses challenges for corporate leaders and governments, especially since local regulations, data requirements and model availability are subject to shifting policies.

Against this backdrop, a small group of “GenAI middle powers” is emerging across Europe, Asia and the Middle East.

Each has distinct strengths that might allow it to compete as a regional or global technology supplier.

This race now expands beyond software to encompass hardware, infrastructure and technology adoption.

Malaysia must actively build its domestic AI capabilities to avoid high technology sovereignty risks as it looks to the future of agentic AI.

Execution speed and scale will dictate whether Malaysia leads in Asean or falls behind.

Encouragingly, the Digital Ministry, through the establishment of the National AI Office (NAIO), is driving a coordinated national AI agenda – spanning governance frameworks, cross-sector adoption and ecosystem development.

These efforts lay the critical foundations for more advanced applications, including the next wave of agentic AI.

Productivity multiplier

Globally, the shift is already underway and early signs indicate that the rise of agentic AI will be rapid.

BCG’s Build for the Future 2025 study shows that agentic AI’s share of AI-driven value is expected to nearly double from 17% in 2025 to 29% by 2028.

Leading companies are moving beyond experimentation – one-third of “AI future-built” firms have deployed agentic solutions and are demonstrating measurable value.

Early adopters are already unlocking tangible benefits. BCG’s study shows that while companies are exploring agentic AI across operations, support functions and innovation, customer experience is emerging as the top priority.

Leading use cases include deploying intelligent agents to autonomously handle Level 1 and Level 2 customer support, as well as optimising digital marketing campaigns – continuously adjusting bids to maximise returns, reallocating spend to high-performing channels and testing creatives in real time.

AI undoubtedly represents a powerful productivity multiplier for Malaysia.

It can strengthen key economic sectors such as manufacturing, financial services and many other industries. For SMEs, agentic AI can lower the cost of sophistication, providing access to capabilities once reserved for large enterprises.

Beyond the private sector, agentic AI can modernise public services and improve policy-making decisions and delivery in healthcare, education and justice.

It can help bridge urban-rural divides by expanding access to digital services and decision support.

In a nation balancing growth ambitions with demographic and fiscal constraints, agentic AI is not merely a technology upgrade – it is a lever for sustainable and inclusive growth.

Four strategic priorities

To compete effectively in this next phase of AI, Malaysia must act with clarity and intent across four priorities.

> Build sovereign AI capabilities. Malaysia could strategically build sovereign AI capabilities in areas where it has natural strengths and where risk mitigation matters most.

This includes expanding reliable access to compute, leveraging its growing data centre ecosystem.

A pragmatic and technology-neutral approach that combines global technology partnerships with targeted domestic capability-building will be more effective than pursuing full-stack independence.

Technology partnerships could focus on leveraging leading AI innovations from both Western and Eastern ecosystems in a neutral manner.

Open-source AI models offer a practical pathway to reduce dependency risks, accelerate adoption and support local customisation.

At the same time, efforts could focus on enabling responsible use of high-quality local datasets.

> Invest aggressively in talent. Malaysia must pair global talent attraction with sustained local capability development to build the AI workforce needed to compete at scale.

It could aggressively attract top global AI talent through competitive incentives, strong research ecosystems and vibrant innovation hubs, while simultaneously building a deep domestic pipeline of AI talent.

This requires strengthening STEM education, expanding university–industry collaboration, embedding AI in technical and vocational training and accelerating workforce upskilling across sectors.

> Scale national platforms. Malaysia must move from fragmented pilots to scaled national platforms, anchored on high-impact use cases – such as a unified government interface linked to MyDigitalID.

This platform provides a common foundation to embed AI agents that deliver personalised public services.

Scaling up such platforms will catalyse greater private-sector participation and ensure sustainable adoption of agentic AI.

In addition, Malaysia could strengthen exchange platforms that bring together the government, industry and academia to accelerate collaboration, capability-building and use case development.

Associations such as AI Malaysia (AIM), Malaysian Autonomous Intelligence & Robotics Association (MyAIRA), along with other industry associations, can play a critical role in sharing best practices, mobilising talent and aligning stakeholders to drive ecosystem-wide adoption of agentic AI.

> Implement pro-innovation regulation. Malaysia needs regulations that protect users but also preserve competition.

Policymakers could favour a flexible model over rigid frameworks, particularly in a fast-evolving technological landscape.

Malaysia could pursue a balanced approach – combining principle-based guidelines, regulatory sandboxes and sector-specific standards that can evolve alongside the technology.

Priming Malaysia for growth is critical, but it is essential that this is done through a forward-looking and ethical approach.

Malaysia has the opportunity to differentiate itself by championing ethical, inclusive AI.

This is a core foundation of effective AI adoption, and should align with national values, ensuring that trust and confidence underpin the next wave of innovation in agentic AI.

Defining the future

The stakes are clear. AI investment compounds rapidly. Early movers attract capital, talent and vibrant ecosystems.

The choice is not whether AI will reshape the Malaysian economy.

The choice is whether Malaysia will shape that transformation with speed, clarity and ambition while remaining anchored to core Malaysian values.

CF Ong is managing director and senior partner in Boston Consulting Group.

Bridging the rich-poor gap in Singapore

The recent pay increases are seen by some Singaporeans as a step forward, but critics view them as tweaking, rather than resolving, a fundamental problem.

WHEN Cabinet ministers took turns to rebuff a proposal to push up salaries of lowly-paid workers, most Singaporeans viewed it as good as buried.

Given the strict way the government is run, the revolutionary idea raised by former state economic adviser Professor Lim Chong Yah might well have faced the death sentence.

His think-out-of-the-box way of narrowing the economic gap called for the salaries of low-level workers to be raised by 50% over three years, and those at the top-end be frozen for a similar period.

The widening gap between rich and poor is becoming one of the most pressing problems here today. It threatens Singapore’s social fabric despite its strong GDP growth.

To the PAP, Prof Lim’s suggestion probably smacks too much of socialism.

But according to the professor, this land of record millionaires needs such a solution because it has for years been significantly under-paying its poorer workers.

The rich are becoming richer, and the poor poorer, not the best way to win votes.

The Boston Consulting Group said that 15.5% of Singapore households have at least S$1mil (RM2.4mil) in liquid assets, the highest percentage in the world.

But the earnings of the city’s 20% lowest paid had declined during the past 10 years.

The unequal growth was not due to globalisation or technological change, but the mass influx of foreign workers in the past 10 years, said prominent diplomat Prof Tommy Koh.

He said Singapore had a per capita income similar to Denmark, Finland, and Sweden, yet cleaners in these countries were paid some seven times more than those in Singapore.

Prime Minister Lee Hsien Loong’s response to Prof Lim was a firm “no” and said such pay increases must be matched by a rise in productivity.

That is virtually impossible as this growth slowed to an average 1% a year in the past decade.

However, I’m glad no one said “never” to Prof Lim. Due to the seriousness of the problem, it is unlikely any leader can swear that the concept will not be relooked at one day.

In fact, since Prof Lim’s controversial suggestion, a series of steep pay increases resembling — and even exceeding — his suggestion has been announced — although only for a duration of one year.

Prof Lim’s proposal was for an average of 16%-17% a year for a consecutive three years.

The recent ones included the following:

> SMRT announced that it was raising bus drivers’ salaries by 35%, but for a six- instead of five-day week.

> Public health workers, including nurses, will have had increases of up to 17% from last month.

> Social workers can expect pay rises of up to 15% this year.

> NTUC, the large union movement, announced that non-executive staff will get up to 15.8% in wage increment and adjustment.

> Several thousand junior and mid-level civil servants will get pay increases of between 5% and 15% this year.

The increases are, of course, unconnected to Prof Lim’s proposal but some observers believe the government is worried over, and may be responding to, the growing public unhappiness about stagnant salaries.

In its way, the job market seems to be lending support to Prof Lim’s proposed measures. The economic imbalance is the second worse in the world, next only to Hong Kong.

But Premier Lee disagreed.

“Although we want our workers to earn more, we cannot simply push up Singaporean wages as we would like,” he wrote on his Facebook page.

“The only way for our workers to do better is to compete on knowledge and innovation, upgrade our skills, and stay ahead of the pack.”

Critics, however, say this is near crisis time and it is not sufficient for the premier to stick to a conventional approach.

Meanwhile, the national wages advisory council, of which Prof Lim is former chairman, has for the first time since 1984 recommended a minimum quantum of pay raise.

It suggested S$50 (RM120) plus an unspecified percentage for workers earning less than S$1,000 (RM2,400) a month.

Although critics say it is a far cry from what is needed, it is apparently aimed at drawing a minimum line.
The authorities have always rejected calls for a minimum wage in Singapore.

Ryan Ong of Yahoo Moneysmart commented: “No offence and all, but that’s about as helpful as a pair of blunt scissors.

“I guarantee a whole bunch of companies are already reading ‘unspecified percentage’ as ‘nothing’.”

Some Singaporeans welcome the recent pay increases as a step forward but critics view them as tweaking, rather than resolving, a fundamental problem.

But as the debate flows, a dark shadow is appearing on the horizon that can worsen the situation and threaten any prospect of strong pay increases.

The global economy appears to be slowing down as it faces woes from Europe, which Singapore has strongly invested in, and an economic slowdown in China.

More employers are likely to become more concerned about avoiding being pulled down rather than how much to raise staff salaries.

A local daily reported that some industries, including shipping, are already feeling the pinch from the slowing Western markets.

Some are planning measures to reduce costs or retrench workers as a short term solution, TODAY reported.

This puts the squeeze on the government’s social compact of promising jobs and a reasonable living standard to Singaporeans in return for their political support.

The grounds at home and abroad are becoming tougher for everyone.

INSIGHT: DOWN SOUTH By SEAH CHIANG NEE

cnseah05@hotmail.com 

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