Malaysia's Digital Competitiveness Paradox: Strong Foundations, Weak Conversion

Abstract

Malaysia's 2025 digital competitiveness profile presents an apparent paradox: strong performance in several educational, infrastructure and technology-capacity indicators coexists with weaker downstream performance in scientific employment, knowledge transfer, business agility, adaptive attitudes and digital participation. This exploratory working paper analyses five-year country-ranking trajectories and detailed 2025 indicators from the IMD World Digital Competitiveness Ranking, develops a Capacity-Conversion hypothesis, compares Malaysia with Southeast Asian peers, and introduces a behavioral-adoption lens informed by prior UTAUT research in a Malaysian organizational setting. The paper argues that digital competitiveness should be examined not only through capacity accumulation but through the mechanisms that convert capacity into adoption, innovation, institutional performance and economy-wide value. The analysis is descriptive and hypothesis-generating; it does not establish causation.