Malaysian Economics: Telecommunication sector

8. Discuss on how the telecommunication sector is able to generate the economic growth in Malaysia.

    Economic growth refers to an increase of economic activity in one country over a period of time, which lead to the increase in the amount of good and services compared to previous times.  Telecommunication sector is fundamental as it promotes continued economic growth.

    First, if we look from the business side, telecommunication is an important sector to expand and grow the business.  A study found that companies that fully utilized communication for their business can help them expanding their business across the country which help them to gain new customers and allow them to invest more in the industry.  Hence, they will be more productive and profitable in comparison to those that do not use communication as their medium to grow their business. When the Malaysian companies collaborate with foreign companies like Indonesia, and gain new customers, the GDP (Y) will increase as the government may implement consumption tax, namely GST or SST through the products they sell.  Besides, as they are expanding their business, the firms will open more job opportunities and advertise job openings on social media like LinkedIn or JobStreet.  Here, we can see telecommunication also plays an important role in reducing the unemployment rate. When more people work, more workers must pay income tax to the government and income (Y) increase. The increase and the development of the level of economic activity will lead to an increase in goods and services in an economy.  Therefore, it may generate the economic growth in Malaysia.  From the other side, the low unemployment rate will increase employment, GDP will increase, the standard of living of the society will increase as well as the economic will grow rapidly.

    Next, as we know, they are three factors that may generate economic growth: more capital, more employees, and fully utilized of those two existing factors. Telecommunication might be a part of fully utilized of more capital’s factor.  Telecommunication makes an improvement of efficiency in our communication.  Nowadays, telecommunication allows us to share pictures, voices, videos, and others.  Hence, telecommunication became an essential component of today's commercial environment.  Customers may interact with companies and have online interactions or face-to-face conversations concerning their problems.  Suppose a customer wants to make a complain about the hygiene of the workers in a restaurant, he may lodge a report directly to the company through the customer service.  Usually, companies always provide the contact information or customer service’s contact in their official website.  With such a platform, the customer can reach out the company easily with a picture or video as a proof.  Hence, the company can make any improvement to their services to gain the customers’ trust.  Then, the companies may have built a good relationship with the existing customers let alone the customers will leave a good review about their services or goods in Internet.  This will help the company to attract more people to purchase their services or goods.  Thus, more products or services produce to meet the demand which lead to economic growth.  Besides, economic growth would happen if the company advertised their goods on social media.  For instance, McDonald’s made a better use of social media to interact with their existing and potential customers by using YouTube, Twitter and other platforms. Every time the new product will be launched, people would know by watching the advertisement.  Hence, more people would buy it, which means the demand of that product would also increase.  Hence, it will generate the economic growth.

    To conclude, telecommunication sector plays a crucial role in generating economic growth in Malaysia.  Hence, the Malaysian government should invest more in telecommunication sector as it will benefit the country in the long run.













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