Digital economy has two interrelated components, i, e. 'ICT-producing and ICT-using industries', and this paper is focusing on the letter. The experience of some OECD countries suggests that ICT utilization by business sector helped increase the level of productivity and economic growth especially in the second half of 1990s, but for developing countries (such as Malaysia and other countries in ASEAN), it is yet to see any meaningful impact. Based on a comparative study, it is observed that the magnitude of economic impact hinges upon the level of ICT utilization in the economy, which in turn relates positively to the presence of some key socio-economic factors (including 'e-readiness' and 'economic structure' or 'GDP composition'). For Malaysia, from discussions with businesses and government entities, the study further identifies some 'peculiar predicaments' (notably, the uneven ICT utilization across the country, and businesses are not making full use of ICT), which have been dragging the creation of critical mass, thus hindering the economy from reaping full benefits of ICT utilization. Hence, for enhancing its future economic growth potentials, Malaysia needs to find ways to address the predicaments and increase the level of ICT utilization in the economy. In this context, the study proposes some recommendations for reducing the predicaments.
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