Thursday, 5 December 2019

Shared prosperity future

The official launch to signify Malaysia’s role as host for the Asia Pacific Economic Cooperation 2020 (Apec 2020) took place yesterday, officiated by Prime Minister Tun Dr Mahathir Mohamad. In his speech, the prime minister stated the importance of the cooperation, citing that it accounts for more than 80 per cent of Malaysia’s total trade and more than 70 per cent of our foreign direct investments in the manufacturing sector.
Apec is also unique, in which its voluntary, non-binding and consensus-based decision-making principles instill meaningful results in global trade and investment. While the Bogor Goals, idealised in 1994, focused on improving free and open trade and investment, we have also come to the point where faith in economic liberalisation can only be restored when it is inclusive to all levels and allows participation of all players.
It is for this reason, the prime minister advocated that the concept of shared prosperity, introduced during his speech in Papua New Guinea last year, be echoed across the Apec economies. Malaysia took this first step by introducing the Shared Prosperity Vision 2030, launched last October, to create an economy that is balanced and sustainable. Since Malaysia hosted Apec in 1998, there have been numerous global phenomena that affected not only Apec economies, but also the world markets.
Firstly, the global population saw a steep increase from 5.9 billion to 7.7 billion in the past two decades alone, creating a higher sense of urgency in achieving sustainable development goals as we move towards the future. Secondly and more importantly, the quick rise of the digital economy has made market access cheaper through the bridging of communication. However, the technology is not necessarily
accessible to all walks of life. This imbalance of access is not only about the ability to access the affordability, ease of use and speed of the technologies within the digital economy, but also about the opportunity loss that further widens the gaps between the digital haves and have-nots.
As technologists, we must believe that shared prosperity should run on the principle of “shareability” of technology. The conceptualisation, design and implementation of products and services must also have built-in features that improve the access of the technologies so that they do not cause further economic disparity and imbalance. For example, higher- end smartphones have applications that enhance users’ productivity.
However, the pricing of certain models inhibits the access to such productivity enhancements — therefore the real beneficiaries of this productivity remain within the spirit of traditional economic models, which global citizens may have lost faith in. In engineering, we learn concepts such as “design for manufacturing”. Perhaps, it is also important to introduce “design for shareability” into technology.
Next year, Apec economies will sit down to chart its future direction by launching the Post 2020 Vision for Apec to ensure its continued relevance and become more inclusive than before. To this end, having our leaders pave the way for inclusivity is not enough. It also depends on the hard work, creativity, innovation and resilience of our local players to take the challenge and include themselves in a global market that demands more and more competitiveness, but yet allows access to more players due to the reduction of trade barriers as a result of the digital economy.
As we are in the last month of 2019, it is time for us to reflect on our success and failures in the past ten years and look into new thinking, solution and mindsets in the spirit of inclusivity and shared prosperity that will be enshrined in Apec.
The writer is the chief executive officer of Malaysia Automotive, Robotics and IoT Institute.

Thursday, 28 November 2019

Developing NxGV Ecosystem

PREVIOUS articles in this column have discussed the subject of Next-Generation Vehicles (NxGV), and as mentioned, will be an intrinsic focus of the new National Automotive Policy, which will be announced next month — on top of energy-efficient vehicles which area prominent aspect of the current policy.
The next step for our industry would be the development of technology to support the NxGV ecosystem. This is vital to the development of the NxGV value chain — the parts and components manufacturers, aftermarket players, as well as the talent pool made up of engineers, technicians and specialists in the fields of artificial intelligence, robotics, smart manufacturing and product designing. All successful programmes in the development of expertise, capability and talent have one key infrastructure in common — a testing or proving ground.
Just like sports teams have their own training ground to test and practice new techniques,tactics and strategies, the development of NxGVs would need similar grounds to test mobility products, particularly as the world is moving towards connected and autonomous vehicles. If you have a chance to visit the manufacturing plants of our local original equipment manufacturers, you will notice a test track, where cars are driven over different terrains and road conditions, with engineers taking notes and reading data on the performance, comfort and safety of the vehicles they have designed or manufactured. However, when it comes to Connected and Autonomous Vehicles (CAVs) — which are within the definition of an NxGV — the items that have to be tested are expanded beyond the performance of the traditional car.
CAVs, in particular those above Level2Autonomy, are built to monitor, analyse and communicate with its surroundings in order to function. They respond to road conditions, weather, traffic conditions, pedestrian and cyclist presence, etc.
In the future, they will communicate with sensors and data communicated by traffic lights, weather stations, other vehicles and many other sources of environmental data to form automated judgments and self-corrections based on artificial intelligence. This wide of range of technologies work with one another to ensure the safety of future vehicle occupants and those surrounding them.
In view of fatal incidents that have occurred during past tests of autopilot modes, it then becomes pertinent for testing of NxGVs to be conducted in a safe and secure environment, where not only human lives are not subjected to risks, but where businesses can also operate in a business-friendly environment of common testing — the latter an obvious reason to ensure healthy competition among the industries in the development of NxGV technology.
Hence, comes the utility of CAV test beds —a“mock up” running ground that allows the physical proving of designs, prototypes and production models (including components) of NxGVs. Given the complexity of the tests needed to successfully implement an autonomous vehicle programme, such test beds must also allow for real-time testing of all elements that allow vehicles to communicate, using the technology mentioned above. Recently, I had the privilege of visiting ZalaZone,anew infrastructure zone designed to support experimental research and the development of future automotive and mobility technologies. Situated in Hungary, it integrates classic vehicle dynamics testing with a host of testing facilities for CAVs in its purposebuilt proving ground modules, such as a dynamic platform, handling courses, smart city zones, braking surfaces, rural roads, highway sections, high-speed ovals, bad roads, slopes, noise measurement surfaces, water basin and kick plate modules.
The visit was also attended by the International Trade and Industry Minister, with the delegation spending time to fully understand the development of such test beds, with the ministry and the Malaysia Automotive, Robotics and IoT Institute planning to work closely with ZalaZONE to create a similar testing zone for Malaysia in Cyberjaya, with the aim of making Malaysia a centre of excellence for the
Asian region in CAV testing.
The writer is the chief executive officer of Malaysia Automotive, Robotics and IoT Institute.

Thursday, 21 November 2019

Tech Learning Curve Needed

The issue of Malaysia’s economy, in particular the escape from lower and middle income traps, has been discussed for a long time, perhaps more than a decade or so.
No doubt there are numerous issues to address at hand. While we have been successful in improving our national income streams, it has led to new issues such as social equity of wealth, urban versus rural gaps in opportunities and distribution of employment opportunities.
While immediate government economic stimulus is a low hanging fruit to implement, it is also important that we are careful of long-term consequences of seemingly obvious solutions that may have hidden ramifications, where the effects appear long after the implementation. For example, a sudden increase in wages may be a welcome and popular thing to do, but may work counter-productively in the long run if it does not result in increased productivity.
This is simply because the increase in standard of living is related to the purchasing power and not the nominal value of one’s income per se.
A healthy increase in wages is a factor of productivity and sellability. The employee increases his or her compensation through the increase of volume, value or quality over the same given amount of time of work.
At the same time, the employer (which in essence runs an organisation that provides volume, value or quality) must be given market access to sell his or her product or services in order to compensate the company, in turn compensating the employees that have contributed to the development and production.
While it is an obvious equation, the valuation of activities leading up to the above example is usually in question. When there is a sudden force of wage increase without any accountability to the productivity of work or the market value of the organisation, the increase in wages does not lead to an increase in purchasing power in the long run. Before the wage earner can enjoy his extra income, the increase in labour cost — a direct result from the wage increase — has added cost to the production, and has created a chain reaction in other wage brackets adjusting to the market forces. The result is an increase in labour cost, production cost, followed by an increase in selling price — with no new improvement to the value of services rendered. When there is a sudden realisation that nothing extra can be bought despite a wage increase, the cycle will restart once again.
The next question is clear — what do we do to increase purchasing power?
Without attempting a “one size fits all solution”, the basic principle is straightforward — we either spur opportunities to increase value or increase creation.
It is for this reason we see national level visions and policies that allow for such opportunities for personal, business and market development — so that we have the space to open new businesses, fill in jobs and meaningfully participate in technology as a creator, not a consumer. One such policy would be the revised National Automotive Policy that will be announced soon.
Three decades ago one would need very expensive technology to create new technology. Today, a laptop is no longer a prized commodity, but the knowledge and skills in creating new products are golden. Facebook, Grab, Microsoft Office, Google, the coding behind iPhone, Android and the Sophia robot were done on laptops we can afford. The reason for their success was not higher level of opportunities, but a strong will to venture into value activities that nobody dared to do, or perhaps resisted and laughed off at the time.
After all,that is the very basis of invention — to create a solution to a problem that nobody realised they had. That is true value.
The writer is the chief executive officer of Malaysia Automotive, Robotics and IoT Institute.

Thursday, 14 November 2019

Creating mass opportunities

We all know the following services—Grab, Foodpanda, Lazada and Socar — and many others of their kind which deliver our needs at the touch of a finger.
At the core, these apps possess a key similarity. They are integrated with a menu or catalogue of services and products, and users can make a choice, commence the transaction and the need is delivered.
Traditionally, we would have made a call, or walked to the roadside to flag a taxi, driven to the restaurant to buy food, or gone to a shopping mall to browse and shop for items we need. The traditional retail process was also highly dependent on location, visibility and customer traffic.
The key takeaway here is that there is a significant change in the aspect of transportation, or rather, the mobility experience – and these services have created an evolution in the movement of the consumer in the processes of commerce.
The mobility aspect changes, in The National Automotive Policy, which will soon be announced, will look at this understanding and integration of MaaS into the domestic mobility industry. The writer is the chief executive officer of Malaysia Automotive, Robotics and IoT Institute. which it is either eliminated to enhance the service (or transferred to the business owner), or transformed to forego the need for the user to be part of the ownership of the mode of transportation for a need to be fulfilled (the vehicle).
This connectivity, which is combined with a “change of ownership” is the very fundamental of Mobility-as-a-service (MaaS).
In a nutshell, MaaS integrates various transportation services — public and private — into a single, unified mobility service that can be accessed by anyone at any given time.
To spur businesses and jobs in MaaS, the first thing to address is the mindset towards more understanding of MaaS elements, and what it represents.
We must be mindful that MaaS is not an instant product, it is an evolving concept of mobility that introduces technology components in bits and pieces towards a larger jigsaw puzzle — slowly changing our lifestyle and behaviours, very often without us noticing its ubiquity.
For example, when the Grab app was introduced in 2012 — known as MyTeksi then — it was perceived purely as an application to hire taxis without going through the hassles we were accustomed to at the time. Little did we expect that it would change the way we commute, or for those who used it extensively, reduce the number of vehicles they owned.
Based on the same perception, the Foodpanda phenomenon changed the lunch lifestyle of many working adults by circumventing the need to leave the office and drive, find parking and argue over meal choices with colleagues.
Nowadays, many businesses have their own dedicated working pantries where employees can have more productive lunch hours with a multitude of different cuisines at their fingertips.
In both of the above cases, the technology did not reduce the sales volume of vehicles or food, but forced traditional businesses to become fluid and dynamic in their business models.
In fact, the introduction of technology during this phase of change was highly accessible to all business sizes and today it has become inherent in daily business operations.
It is this change in business models that makes up the greater philosophical component of MaaS. Therefore, the conceptual understanding by industry players and consumers is important to ensure our ecosystem is developed comprehensively as we move towards the future.
It is important that the application of connectivity, smart applications, data management, data analytics, knowledge systems, artificial intelligence and such advances to be integrated into the industry business model to ensure the relevance of our local players — at all levels — remain sustainable.
The National Automotive Policy, which will soon be announced, will look at this understanding and integration of MaaS into the domestic mobility industry.
The writer is the chief executive officer of Malaysia Automotive, Robotics and IoT Institute.

Thursday, 7 November 2019

Getting ready for next phase of mobility industry

There are many indicators to growth and they are not necessarily based on the revenue or volume figures that we are accustomed to. While the bottom line is still a priority, true growth is a journey and there are several milestones to pass through.
However, the voyage between milestones also matters — a bumpy ride can change the definition of a journey, even if the destination is reached. In the last half decade or so, the
automotive industry has shaped itself towards a stronger foundation. While sales volume may have had higher growth rates in the past, total sales to production ratios have narrowed its gap over the years, signalling a higher level of localised assembly across the board in both national and non-national operations within our borders.
Parts and components exports have more than doubled over the last half decade, and is expected to yet again achieve record levels by the end of this year. A higher degree of complete built-up exports were seen, signalling higher contribution of non-national exports, which previously was close to non-existent. Overall, the local automotive value chain has stronger linkages, and results are pointing towards a renewed strength through new measurable achievements.
However, a strong foundation is only an enabler to more success, it is not a guarantee of continued relevance. The remaining question is simple — are we ready for the next step? For me, readiness is not a solid state or position — but rather a fluid, dynamic proneness to respond as swiftly as possible. If we compare two stone pieces of equal weight, a polished round shape is much easier to push when compared to one with a jagged, uneven surface. In a world where technology and trends can be rendered obsolete overnight, industry readiness is measured based on its ability to adapt quickly, not only its current performance based on singular indicators.
The current National Automotive Policy (NAP) focused first and foremost on a change of mindset—balancing current economic needs,future business thinking and social upward mobility.
The new and enhanced NAP is going through its final phases before it will be announced in the very near future, encompassing technology direction and business strategies in next-generation vehicles, mobility as a service and Industry 4.0 compliance.
Several technology road-maps will also be developed specifically to industry adoption and penetration of technologies surrounding the connected mobility sector. If we take a look at this year’s motor shows in Geneva, Frankfurt or Tokyo, the overall sentiment from car-makers was the sudden leap of faith from conventional transportation to connected mobility,a stark contrast in temperature for electrification and autonomous technology, if compared to previous editions.
For a developing market like Malaysia, such leaps of faith are often tough to make, and it is the government’s role in pacifying anxieties and hesitation — placing the safety wheels as we embark on the next phase of the mobility industry. The industry can expect a higher degree of enhancement opportunities in developing capabilities in smarter vehicles, components and systems, as well as the utilization advanced materials,processes and data-driven decision making.
New business models in both manufacturing and services sectors will emerge, and meaningful participation of local players will be encouraged. The natural impact of the policy implementation can be expected — smarter and safer vehicles, mobility services, high value job opportunities and improved after-sales service for Malaysians.
In conclusion,the answer to the question of our readiness is also simple. With the opportunities and ecosystem we have built, we are fortunate that we can see the gap we must jump across. All we need is to do is get ready to jump.
“Luck is merely when preparation meets opportunity.”
The writer is the chief executive officer of Malaysia Automotive, Robotics and IoT Institute (MARii).

Thursday, 31 October 2019

Need for long-term foresight

The adage “Rome was not built in a day” is philosophically accurate with respect to the situation we are in at any given time – they are often symptoms that emerge long after a decision was made in a distant past.
The United States automotive industry crisis between 2008 and 2010 is a good case study for this, in which the American Big Three – General Motors, Ford and Chrysler – focused primarily on high-margin sport utility vehicles (SUVs) and pick-up trucks, despite a looming energy crisis around the same time.
As the demand for energy-efficient models increased, sales of the Big Three models went down, reaching a critical point as the 2008 financial crises hit the market.
It is also said that economies revolve around cycles – they move from prosperity to recession due to factors often difficult to pre-empt.
However, the defining point in an economy is not how it is performs at a given time, but rather how it develops strength and resilience to survive the lows and shine bright during the highs.
In Malaysia’s case, we have developed the same resilience over time, surviving several recessions and keeping abreast of global developments through sound industrialisation policies formulated at the end of the last century.
As a nation, we have come a long way from our roots as a former colony, with agriculture and raw materials as our sole source of income.
For the last three to four decades, we have ventured into numerous high value sectors, including the automotive industry that has bred full-fledged local car makers capable of designing and developing vehicles from scratch, and the large ecosystem of vendors, dealerships and service centres to cater to the growing tech-economy.
Our industrial foundation has prepared itself for higher level capabilities through strategically placed infrastructure and a technologically diverse talent pool.
However, we cannot rest on our laurels and assume the same ways will bear the same results forever.
Despite our industrial foundation and resilience, there has been an unfortunate stagnation in our economic levels – seen through indicators such as the weakened currency, budget deficit, and slower income growth – in the last half-decade.
The lesson taken here is the foresight needed to ensure that the long term policies developed are sensitive to emerging global trends, often discussed at length in this column.
The good news is that there have been many policies that have been announced to address the nation’s competitiveness as we move into the next decade.
New directions developed through national policies on transportation, entrepreneurship and digital content have been formulated stemming from the Shared Prosperity Vision 2030 to encompass a holistic and cross-functional approach as the world moves towards a multi-disciplined and connected economic ecosystem.
The International Trade and Industry Ministry’s National Policy on Industry 4.0 -Industry4WRD – has entered its second year and aims to address the adoption of technology in the manufacturing sector for businesses.
The policy will be implemented further through new programmes, including the newly-announced MARii Industry4WRD Technology Platform (MITP), adding to the Readiness Assessment and Intervention programmes launched last year.
The same long-term philosophies of encouraging meaningful participation of local players in the digital economy will be part and parcel of the new National Automotive Policy, that will be reviewed by the cabinet soon, as announced by Minister Datuk Darell Leiking yesterday.
The automotive sector will continue to spur the utilisation of technology and allow participation of Malaysians in the digital economy, in areas such as Next Generation Vehicles, Mobility as a Service and advanced manufacturing, in line with Industry4WRD.
The development of these technologies would create direct spin-off and utilisation to enhance other sectors outside the automotive and mobility industry.
Other frameworks and directions will be announced by the ministry soon, including a policy on remanufacturing across various sectors following the growth of exports of remanufacturing of automotive components over the past three years.
It is then key to future-proof the employment and business ecosystem to ensure the sustainability and relevance of our economy to the global markets.
Policies for middle and lower income groups, educational reform, wealth distribution among states, genders and ethnicities are all areas to address—with the goal to ensure overall prosperity in the global digital economy.
Most importantly, the policies require deeper implementation to maximise its effectiveness and time to demonstrate results.
After all, they are long-term policies that require careful formulation, calculated implementation and widespread participation from all segments of our society.

The writer is the chief executive officer of Malaysia Automotive, Robotics and IoT Institute (MARii).

Thursday, 24 October 2019

Step up development of SMEs, the unsung heroes

THE success and failure of an economy is often romanticised by the global brands that it creates — Apple of the United States, Shell of Europe, Toyota of Japan and the Samsung of South Korea.
However, the unsung heroes of any thriving global economic powerhouse are the small and medium enterprises (SMEs) that often form the biggest chunk of the economy.
In most countries, SMEs form a round 90 percent of the population of companies. In Malaysia, the figure stands at around 98 per cent.
The SME economy is important for a few reasons. Firstly, they form the backbone of the value chain that supports larger corporations. Secondly, they provide the playing field for creativity, innovation and business potential.
Out of the 900,000 SMEs registered in Malaysia, more than three quarters are micro businesses while only two per cent form medium enterprises.
In 2016, SMEs contributed 36.6 per cent to the nation’s gross domestic product.
It is important that SMEs are given the attention and development space. They must also adopt new technology to stay relevant and competitive.
The Malaysian economy is highly diversified, which includes deep rooted cultural heritage that has spurred cottage industries like the manufacturing of batik, silk and handicrafts.
While there is local sentiment to preserve the cottage industries, it also has export potential.
The model to ensure the sustainability of our cottage industries needs to be updated. To stay relevant, value-added activities must be added to promote the products and improve quality.
Marketing, sales, accounting, training and crafting can be improved through the usage of new technologies, made possible by automation, cloud-based technology and the Internet of Things (IoT).
Many technologies have been created for use in the automotive industry, as discussed extensively in this column. They include IoT based enterprise planning and accounting software, camera vision, or broad-based financial technology software — all with immediate spin off for the utility of other sectors.
The barriers in spurring international market awareness and exportability of such products can be reduced as technology adoption becomes more affordable, particular for the SMEs
It is for this reason that the Malaysia Automotive, Robotics and IoT Institute launched the Technopreneur Development Programme (TDP) last week, in conjunction with the Malaysia Autoshow 2019 Sabah.
The TDP is structured to provide SMEs with the requisite knowledge and digital tools to enhance business operations, with the end goal of establishing an ecosystem revolving technology, that is fully utilised by SMEs on a shared common platform and engineered by MARii and its partners
The pilot programme, starting with 10 companies within the cottage industry in Sabah, was developed in partnership with Fintech Lab to allow SME business owners to reduce administrative burdens through the adoption of applicable technology, increasing value-added activities that can enhancing company operations
In the future, more companies will join the TDP, covering more sectors and areas as a spin off from technology applications within the automotive and overall mobility industry.
While there are numerous efforts from many parties to enhance the SME sector, these spinoffs are ready to be applied and adopted for SMEs to enhance their productivity, quality, and exportability of our rich heritage.

The writer is the chief executive officer of the Malaysia Automotive, Robotics and IoT Institute (MARii).