Sarawak wants its creative industry to lead Malaysia’s digital economy

The Malaysian state of Sarawak wants to double its economy in seven years. The last time its economy doubled, it took over two decades.

Artificial Intelligence (AI) data centres and its ecosystems are one of the priorities in the strategy portfolio, says the Sarawak Digital Economy Corporation (SDEC)’s CEO, Sudarnoto Osman, to GovInsider, at the sidelines of the Borneo Animation & Games Festival (BAGFEST) 2026.

The event was jointly organised by Malaysia’s Digital Economy Corporation (MDEC) and SDEC.

Connectivity, talent development, and a homegrown creative industry all follow the same logic: stop exporting the raw input, keep the value-add at home, says Osman.

Sarawak’s growth

As the host for the event, Sarawak stood at the centre of the conversations around what it means to grow the national digital economy.

Osman shares that the event was an initiative that aligned with current regional goals.

SDEC’s current strategy, focused on digital economy, sits inside Sarawak’s Post-Covid Development Strategy (PCDS 2030), which is a blueprint that replaced an earlier plan.

Sarawak now aims to have its digital economy contribute 20 per cent of the regional GDP by 2030, aligned with national plans that situate the digital economy as a core pillar of Malaysia’s national economy.

“What normally takes 20 years, we want to do it within seven years,” he says, noting that the document was launched in 2021.

“The numbers are not scary; we will get there some way or another. It’s just a matter of time.”

To meet that target, the region is advancing different plans in parallel. Data centres, connectivity, and the creative economy, highlights Osman as the main priorities.

In terms of internet connectivity, in the last five years the region went from 54 per cent of internet coverage to its current 94.5 per cent.

Once connectivity is in place, use cases can emerge, he says. From farmers automating irrigation through a phone app to small businesses moving to e-commerce, all of these have an impact on the digital economy.

“The government can only facilitate, the rest is up to the people to use it and achieve,” he adds.

The shift toward data centres for AI, for example, was a way of converting energy into computing infrastructure that supports jobs across other sectors, investment, and local spending, he explains.

The state has designated land for the sector near Kuching and opened parts of it to foreign-owned investment, with a few groups showing interest in building data centres in Sarawak, according to him.

SDEC is also funding some of the underlying infrastructure directly, while also structuring public-private partnerships and courting fully private-funded projects to enhance the digital economy.

The creative economy

The same logic driving the data centre push, which is to capture value locally instead of exporting it, shows up in Sarawak's strategy for its creative industry.

Sarawak's universities produce a steady stream of animation, game design, and media graduates, notes Osman.

Historically, most of these graduates left for Kuala Lumpur or overseas, where production houses and funding are concentrated.

SDEC's aim is to keep them in Kuching by building that ecosystem locally, so graduates don't have to leave to find work.

That’s where events like BAGFEST help younger talents take the first step, he says.

“It’s not about just one festival, it's about [it] working as a catalyst. Connecting studios with production houses, generating visibility for the local industry.”

With visibility, support for intellectual property (IP) follows, as well as funding pathways and production capacity that continues long after the event ends, he says.

Sarawak currently has roughly ten active production studios, and SDEC's target is 40 to 50 by 2030, says Osman.

What still needs to be done

Osman notes that there is still work to be done to close the gaps in the strategy.

Starting from education, high-value sectors like AI and green energy need researchers at a higher level than degree holders, and Sarawak's university system is only beginning to produce them.

That pipeline, he acknowledges, moves on a five-to-ten-year cycle that doesn't neatly fit a 2030 deadline.

SDEC's answer in the meantime is to bring in outside talent directly, through new mobility passes that ease movement between Sarawak and the rest of Malaysia.

For him, the test was never the GDP figure. "Whatever you do, it has to go back to the objective. Are you making a difference to your lifestyle?"

On that basis, Sarawak’s push into data centres, connectivity, and the creative economy is still a work in progress, with 2030 marking an early checkpoint rather than a finish line.