By Siti Balkis Mohamed Ibrahim and Dr Faiz Masnan

The Fourth Industrial Revolution (IR 4.0), driven by artificial intelligence (AI), data analytics and automation, is transforming economies and societies around the world.

Malaysia's embrace of digital transformation is evident in the National Artificial Intelligence Roadmap 2021-2025 and the Malaysia Digital Economy Blueprint (MyDIGITAL). Successful implementation of AI goes beyond just frameworks or policies; it requires visionary and adaptive leadership.

With the increasing digitisation of the world, Malaysian public universities are expected to provide world-class education through well-established digital environments.

However, many continue to depend heavily on periodic funding from the Ministry of Higher Education to maintain and upgrade their various systems and services. This dependence on funding also leaves Malaysian universities exposed, older systems will become obsolete, and university leaders may have to weigh the option of innovation or costs.

New form of digital leadership

While technology will continue to bring new obstacles and hurdles, we are beginning to realise a new form of digital leadership that is characterised not only by the sprouting of new technologies but primarily by strategic planning, resilience, and innovative use of research and human resources.

The most powerful example of digital leadership in action is PayNet Digital Campus 3.0, a collaborative initiative involving 25 public universities with over 24 million cashless transactions between August-December 2024, which converts to an astounding average of 66 transactions per UiTM Perak student! This initiative involved around RM 1.02 million, and underscores that we can achieve great things with relatively little funding.

These universities implemented QR payments and e-wallets that significantly reduced cash usage and fostered digital-first student mindsets. This initiative embodies leadership that carefully aligns technology adoption with strategic vision, and the realities of funding.

It showed that Malaysia recorded a score of 91.2/100 in academic readiness in QS's 2025 Future Skills Index, ranking 4th in Asia, but scored a dismal 35.4 in economic transformation. The underperformance in economic transformation indicates a disconnect between education output and economic demand.

While these initiatives serve to reinforce the interest in digital leadership in universities, it is ultimately the responsibility of the university leaders to ensure that their campus systems take full advantage of these government funding opportunities.

Budget 2025 provided RM64.1 billion to education, out of which RM18 billion was allocated to higher education (up from RM16.3 in 2024), which included:

• RM600 million on R&D including AI and cybersecurity.
• RM4 billion on scholarships and student support.
• RM50 million on AI education, and RM20 million on E&E engineering.

Such allocations indicate a clear determination on behalf of the nation. However, much of the digital systems fall under the ministry's general infrastructure budget and is often shared among competing interests.

Digital competency of the educator

In this light, progressive leaders are taking a phased approach to digital roadmaps. Treating systems upgrades as modular parts that will evolve based on their needs and affordability, while prioritising those areas where system changes may have the highest impact. This includes important areas like finance, student services, and LMS platforms, particularly with a view to open-source solutions, which might subsequently lower costs and improve returns on investments through collaborative development.

To be effective in building internal capacity, digital leaders shouldn't just think about technology, but instead how their success relies on being people-focused (stakeholders).

Studies have shown that the digital competency of the educator by far is the largest influence on the use and adoption of systems.

For instance, usage of Moodle directly relates to how tech literate the educator is, as well as their formal and informal confidence and/or skill set to incorporate them as a component of their daily practices.

Universities that have invested time and money in ensuring staff capacity building, have generally seen a larger internal uptake of those platforms which lessens their reliance on external vendors.

It is important to find the middle ground, through strategic agility, financial innovation and policy alignment. Leaders will sequence their upgrades so that replacing obsolete systems will slow exposure to cybersecurity threats and ongoing administrative and processing inefficiencies.

Furthermore, in terms of financial innovation, leaders may adopt industry collaborations with external organisations such as Google Cloud to stretch budgets and to better develop their campuses digital ecosystem.

Policy alignment

Last but not least, is policy alignment. As Malaysia evolves consistent with both the Higher Education Blueprints and Digital Blueprints, public universities will be readying themselves for the national expectations within their digital infrastructure, embed hybrid learning and focus on student employability.

Public universities that rely on the ministry for funding have recently experienced digital leadership that is shifting what can be done under restricted budgets.

From cashless campuses to staged flexibility for technology updates, leaders are being creative and still doing digital transformation on a budget which will benefit the student experience, the quality of operations, and their resiliency as an institution.

However, much to overcome, and without stable funding and flexibility, the digital agenda may stall because it will lack momentum in practice.

If we want to see real changes, we need to ensure that the ministry and the leadership of universities allow for a new way of thinking about longer funding mechanisms, building capacities, and strategic frameworks that go beyond short-term cycles.

At the end of the day, digital leadership is more than just technology. It is vision, resourcefulness and courage, which has been displayed every day in Malaysian public universities, even with a short budget.

-- BERNAMA

Siti Balkis Mohamed Ibrahim and Dr Faiz Masnan are with the Faculty of Business & Communication, Universiti Malaysia Perlis.