By Ts Dr. Hj Ramli Amir, former President of the Chartered Institute of Logistics and Transport (CILT) Malaysia and Vice-President of CILT International for Southeast Asia
KOTA KINABALU: Sabah stands at a critical juncture. To escape the pitfalls of underdevelopment, it must urgently embrace digital transformation while preparing its workforce and infrastructure to harness high-tech industries. These twin imperatives—digitizing existing systems and future-proofing the economy—are intertwined. Without a skilled workforce and modernized logistics, Sabah risks missing out on global tech investments and deepening socio-economic disparities. This analysis synthesizes the urgency of digital adoption with strategies to position Sabah as a competitive hub for advanced industries.
The Critical Need for a Data-Centric Knowledge Economy in Sabah
Sabah’s economic landscape is evolving with the emergence of high-tech industries such as renewable energy, advanced manufacturing, digital services, and logistics modernization. As these sectors expand, the demand for data engineers, AI specialists, and digital infrastructure experts is becoming critical. A data-driven ecosystem will enable Sabah to enhance decision-making, optimize industrial operations, and attract foreign investments in technology-driven sectors.
By fostering a data-centric knowledge economy, Sabah can transition from a traditional resource-based economy to a high-value digital and innovation-driven hub, ensuring long-term economic sustainability and global competitiveness. Establishing AI-driven logistics, smart manufacturing systems, and real-time data analytics capabilities will position Sabah as a strategic player in the regional digital economy.
Socio-Political Foundations for a Tech-Driven Future
Bridging the urban-rural digital divide is essential, as over 40% of Sabah’s population lives in remote areas with limited access to education, healthcare, and governance. Deploying e-learning platforms, telehealth, and e-governance tools can democratize opportunities and reduce urban-rural inequality. Digitizing land registries, permit approvals, and public service delivery reduces bureaucratic corruption, addressing long-standing grievances over resource mismanagement. Blockchain-based systems could enhance accountability in sectors like forestry and agriculture.
A transformation in education is necessary to ensure high-tech readiness. Modernizing curricula to prioritize STEM and coding from primary school levels creates a talent pipeline for industries such as AI, robotics, and agritech. Vocational upskilling through partnerships with global tech firms like Siemens and Huawei can strengthen TVET programs with a focus on IoT, renewable energy, and advanced manufacturing. Improving language proficiency and critical thinking skills will further enable Sabahans to collaborate in global tech ecosystems.
Inclusive governance plays a role in this transformation. Targeted scholarships and mentorship programs can integrate women and indigenous communities into tech roles, leveraging traditional knowledge in sustainable industries like ecotourism or bioprospecting. Decentralized policymaking empowers local leaders to tailor technology initiatives to regional needs, such as agritech in the interior and marine technology in coastal zones.
Economic Transformation: From Agriculture to AI
Modernizing core sectors with technology is key to Sabah’s economic transformation. The agricultural sector can benefit from IoT sensors, drone monitoring, and AI-driven supply chains, boosting yields for smallholder farmers. Digital marketplaces such as e-Sabah can connect farmers directly to global buyers, cutting out middlemen. The tourism sector can be revitalized with virtual reality tours, AI-powered bookings, and contactless services to promote Sabah’s biodiversity responsibly. Small and medium enterprises can leverage e-commerce platforms and digital payment systems such as SabahPay to expand their reach and streamline operations.
Attracting high-tech investments requires foundational infrastructure. Reliable 5G networks, broadband expansion, and data centers are prerequisites for luring semiconductor manufacturers, cloud service providers, and green tech firms. Special Economic Zones, such as Kota Kinabalu Industrial Park, can be designated as high-tech hubs with tax incentives for research and development. Sabah’s abundant renewable energy potential in solar and hydropower presents an opportunity to attract ESG-focused investors in sustainable energy and carbon credit markets.
Job creation and youth retention must be part of this transformation. Reskilling workers from declining sectors, such as logging, into tech-augmented jobs like drone operation, data analysis, and solar technology will create new employment opportunities. Mandating tech firms to reserve a percentage of roles for local apprenticeships can reduce the outflow of talent to Kuala Lumpur or Singapore.
Logistics in Dire Straits: Tech as a Lifeline
Sabah’s logistics sector, plagued by poor connectivity, inefficient ports, and fragmented supply chains, remains a bottleneck for economic growth. High-tech industries demand precision, speed, and transparency, which current systems cannot support. Upgrading Kota Kinabalu Port with AI-driven cargo management and IoT sensors can reduce delays, while training workers in automation systems will ensure smooth transitions to high-tech logistics.
Drone-based and autonomous delivery systems can bypass road infrastructure gaps, improving last-mile medical supply distribution to remote villages and plantations. Implementing blockchain technology in customs and export documentation will enhance transparency and reduce corruption and delays. A more efficient logistics system will lower business costs, boost agricultural exports, and ensure rural communities receive essential goods like vaccines, making Sabah more attractive for high-tech manufacturers that require reliable supply chains.
Strategic Recommendations: Bridging Gaps, Building Futures
A Sabah Digital Talent Initiative can be established to fund STEM scholarships, coding boot camps, and tech apprenticeships, supported by a state-led fund sourced from a percentage of oil and gas royalties. Collaborations with universities such as Universiti Malaysia Sabah can launch AI and renewable energy research centers to drive technological innovation. Rural tech hubs should be created, with 500 community digital centers equipped with internet access, VR training tools, and e-government kiosks by 2030. High-tech logistics corridors, including drone highways and automated warehouses along key routes such as Sandakan-Tawau, will enhance connectivity. Incentives should be provided for corporations that invest in local upskilling, such as tax breaks for firms funding chip design courses. A robust cybersecurity framework must be developed, including a Sabah Cyber Command to protect critical infrastructure and ensure data integrity.
A Race Against Time
Sabah’s window to act is narrow. Global tech giants are investing heavily in Vietnam, Thailand, and Peninsular Malaysia, while Sabah’s logistics and skills gaps continue to widen. However, the state’s unique assets—untapped renewable energy, biodiversity, and a young population—position it to carve niches in agritech, ecotourism, and green manufacturing.
The stakes are existential. Without digital transformation and high-tech readiness, Sabah risks perpetual dependency on low-value sectors and worsening inequality. By prioritizing inclusive education, tech-driven governance, and logistics modernization, Sabah can transform from a marginalized state into a beacon of sustainable, high-tech growth in ASEAN. The time for rhetoric is over—the era of action must begin now.
