Thursday, 29 September 2016

NAP 2014: Towards a design, innovation-based economy


In the first part, this article explained the historical rationale and general framework of the National Automotive Policy 2014 (NAP2014). At the heart of the policy was the propulsion of a design and innovation based automotive economy, working towards global competitiveness through the gradual liberalisation of the automotive sector.


The formulation of the NAP2014 was done through an arduous consultation process with all stakeholders of the automotive ecosystem. The engagement, performed over a three-year period, took into account inputs, views and interests of industry players, academic circles, government bodies and public participation.
This allowed for a fair assessment in the formulation of key development areas within the entire ecosystem, covering missing industry linkages, technology and human capital gaps, as well as innovation capacities across from the economic, policy and societal points of view.

A key lesson from the consultation process was the overwhelming clamour for a streamlined direction in allowing innovation to realistically materialize. Investment in technology and the necessary human capital development, is not a straight forward process, albeit a decision that all stakeholders were prepared to make to stay competitive, despite its high cost.

The automotive sector is extremely diverse, not just in its product range, but also the quantity of manufacturing process specializations it requires.
Furthermore, the infrastructure, manpower and skill levels were vastly different when comparing the manufacturing sector against the after sales sector.
It only made economic sense when technology goals are streamlined in a clear direction – allowing capacity building to take place based on an educated assessment of market opportunities and the risks associated with them.
This was one of the main reasons the NAP2014 was focused towards the creation of a regional hub for Energy Efficient Vehicles (EEVs).
It is now common knowledge that EEVs focus on any vehicle that meets a set standard of fuel consumption and carbon emission level.
The NAP2014 would allow business incentives to be directed towards technology and talent development that centres around energy efficient products and processes.
This would further spur targeted research and innovation led by the industry, in turn allowing increased participation from academia, research institutions and the public.

As mentioned in the first part of this series, the EEV policy was also tailored towards future demands in vehicle technology – fuel efficient, safe, secure and environmentally friendly.

The NAP2014 was not just formulated for innovation, but a business driven venture, with its first penetration point being the ASEAN region – a base of more than 600 million people which until today, had developed automotive industries with only cheap labour and commodities as its competitive advantage.
Overall, the policy was designed to allow Malaysia to emerge as a champion for sustainable mobility solutions in ASEAN.
It aims to further strengthen the current manufacturing and after sales sectors of the industry, tapping the wealth of skilled labour created by our education system, and streamlining research and innovation from the various institutions that has been set up in the country, through both public and private initiatives.

To make Malaysia a high income economy, it must provide high value jobs coming from high value businesses. High value businesses can only be created though policies that drive high value.

For Part 3, click here

The writer is the chief executive officer of Malaysia Automotive Institute.

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