Thursday, 29 March 2018

Roles, contributions in country's progress

Perhaps you've noticed when your distant family, the ones you don't meet as often, talk about how different you look (or weigh) when you meet them at those not-so-often family gatherings.

Reunions between long-lost friends and family are such time capsules. At the point of the re-acquaintance, your previous memories of them instantly disappear, emerging in its place a transformed person - more mature, stronger, wiser.

However, after a few minutes of reminiscence and catching-up, you'll soon find that person who you remember growing up, laughing and crying with.

My mind was blown at my recent reunion with my batch mates from Methodist Secondary School during my youthful days in Sibu, Sarawak. A post reunion get-together in Sibu's Coffee Code unfolded stories of more than three decades of the personal growth and successes of my closest friends.

Among are now lawyers, business owners, safety auditors, civil servants and lecturers, serving in all corners of the country. They were all contributing to the different sectors that make up the fabric of our economy and society, in a big way.

They were all successes in their field, continuously growing more and more within three decades in which they left the secondary education system of the country.

Some were even working outside of Malaysia, as far as Australia or Canada. However, they still call Malaysia their home, the country that gave them the foundation to be what and where they are today.

I soon realised that no matter where we are and what we do, in some way of another we must play our role in contributing to the nation's progress. The thing is that form of contribution need not be recognised or celebrated in heroic fashion.

As long as we have the passion, determination and grit to endeavour and fulfil the requirements of the profession of our calling, we are playing our role in moving the society that will bear the heroes of our nation.

We are not just lawyers, engineers or doctors - those are just labels. For society to work, we need those who fight for justice, create infrastructure for progress, and maintain the body to achieve and persevere - the labels above are only a mere summary of how important they are to the nation.

Don't get me wrong, this article is not just about creating high level professions. Most importantly, we must understand that our success is never a product of our own efforts alone.

Every piece of knowledge, experience, opportunity, or environment we get is not a luxury that everyone receives. The more access we have to the above, the more likely we reap the potential to gain. However, it does not mean in any way that we should look down upon those who are not as successful.

In my years working in the automotive sector, be in on the production line of at policy level as I am now, we're told that a car is not a car if one screw is missing from the thousands of parts that have been assembled.

That single, minute piece of formed steel plays a role - no matter how small - in keeping the car running, and its occupants safe over its entire period of use.

Therefore, we must look to creating the best of ourselves and others, within the means that we have in order to contribute to the success of our next generation. This noble cause bridges cultural, religious or political divide, as great nations are founded on the efforts of each and every countrymen, no matter small or large.

To Azmi, Con Hock, Michelle, Sal, Sara, Bing Bing and the rest, thank you for making my trip to Sibu a memorable and humbling experience.

"Time is not measured by the passing of years, but by what one does, what one achieves".

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

Thursday, 22 March 2018

Adapting to the volatility of the world order

Recent news reports have pointed to the change in dynamics of the world economic order.
While many democracies assert their believe that their system of governance is inseparable from the market economy, their relationship with the populated countries is somewhat principally subject to economic pragmatism, which often forces choices that lead to the greatest good for the greatest number.

China’s admission into the World Trade Organisation in 2001 was met with calls for economic reform, particularly from the United States. While Washington has historically demonstrated strong support for the open international economy, one of the world’s fastest growing economies with a population of close to two billion people was an opportunity too big to ignore.

Fast forward to today, the military rivalry during the Cold War between the US and Soviet Union has now evolved into an economic competition between the United States and China -holding the top two ranking spots in the world by gross domestic product (GDP).

Interestingly, economic pragmatism has prevailed, but with what seems like a twist. The world is looking at an apparent role reversal.

China is engaging in economic activities with more countries than ever, seen particularly in the One Belt One Road (OBOR) Initiative. On the other hand, the President Trump has taken a more inward looking “America First” approach to address the US economy.

Washington withdrew itself from the Trans-Pacific Partnership (TPP) Agreement, and recently imposed tariffs on steel and aluminium imported into the US. If we add in Britain’s impending exit from the European Union, the world’s two most influential economies are shedding their doctrine of the fully liberalised market.

Technology, the global population and economic diversity make the world too big to live in isolation, and our civilisation has come to a point where norms will self-regulate as trends and time pass by.

This article is not meant to pass judgement on economic doctrine, but rather to highlight that economic principles are subject to massive shifts, and requires our sensitivity to re-examine, restructure and upgrade policies based on holistic strategy, information and data.

It is this reason that for an economy like Malaysia, it is best that we keep ourselves open to change, and move towards competitiveness in a careful, gradually liberalised market. The shocks of the current uncertainties are absorbed through carefully, yet progressively crafted economic policy.

For example, media reports indicate that even analysts are divided on the state of the US dollar as the global trading currency. With as much data and knowledge as possible, we must play our roles in ensuring our policy decisions are made with the best information, interpretation and wisdom, as they have deep impacts to our imports and export traditions.

Economic pragmatism, however, should never be untethered pragmatism. There are certain principles, like eternal protectionism, that would never find its way to be accepted by global markets. Not only are they harmful to global consumer choices, but equally destructive to holistic development of industry and the larger national economic scale.

Thus, the government has taken a well balanced approach in its economic policies. Many of these policies have been discussed in detail through this column. We will continue to be an active participant in the global economy – we have welcomed the OBOR and played an important role in the signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

For us, each corner of the globe is a blue ocean of opportunity, including our own. While we welcome foreign investments into our country, our own entrepreneurs also are given equal opportunities to compete on the global stage. At the same time, the government is fully committed to facilitate the development of our local businesses.

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

Thursday, 15 March 2018

The symbiosis between consumers and businesses

The world is currently discussing the concept of a circular economy.
In a nutshell, the circular economy refers to the re-imagination of business models in which resources are finite, and must be harvested from within the existing system without consuming more natural resources.
This would need the redefinition of business models and approaches, and the revamping of operational models, including product design, manufacturing processes and logistics, to reuse materials to sustain themselves.
Developing a circular model for the automotive industry would probably be a much bigger venture.
Today, steel and plastics still make up the biggest percentage of materials in a vehicle. Yet, as trends clearly move towards lighter materials in cars – recyclability of raw materials in a circular economy becomes an area of concern for vehicle manufacturers, product designers as well as process and material engineers.
However, the circular economy is not the main focus of this article, but rather the progress of society towards discussing such an issue. The key question is – how did advanced countries get to the point of discussing issues such as the circularity of the economy against traditional linear economy?
It is here that consumers and businesses need to play their role! Admittedly, governments have historically initiated the framework in product improvement, especially in the areas of human concern such as vehicle safety and environmental preservation.
In the 1950s, it took experts to initiate public opinion in designing of safer cars on the roads. While public disinterest in safety packages offered by major manufacturers at the time was predominant, governments worldwide reached their first milestone by establishing the World Forum for Harmonisation of Vehicle Regulations later in the decade.
Within the same year, a Volvo engineer named Nils Bohlin invented the three-point seat belt – a huge leap in passenger safety at the time. Most interestingly, given the significance of the new design to the lives of millions of people on the road, the patent was made available to anyone – a mature and altruistic decision by a business entity, sacrificing profit for the greater good.
Fast-forward half a century later, the level of awareness among the public has increased tremendously in these countries, many recording a reduction of vehicle related fatalities by half.
The advances above would not have been possible without the maturity and awareness of both consumer and business alike. In today’s age of information, one would assume that this would be much easier – as long as the amount of information doesn’t overwhelm us into a state of disinterest in the fast – moving events that shape global trends.
I was attracted to a story I read recently about a person who stopped reading online news, in favour of printed subscriptions. He described his routine to be transformed, and found himself more focused on his reading and achieved more depth in his knowledge.
While I can’t imagine endorsing such extreme resorts, it made me realise how the vast amount of information reaching us today desensitises our awareness merely to soundbytes and headlines – often giving equal weightage to the mix of important and petty issues that affect our daily lives.
As consumers and builders, we must come to terms with the increasing complexity of our future – and they will challenge our norms and values if we do not grasp such complexity through mature and informed decision making.
We, as consumers, need to capture the important aspects of the changing technologies that will disrupt our lifestyle. This comprehension will allow consumers to drive future product and services offerings that will maximise value.
Let’s all take a step back and think about our roles as consumers and businesses. They are the building blocks in adapting to global change.
The writer is the chief executive officer of Malaysia Automotive Institute.

Wednesday, 7 March 2018

The self-regulation of mature markets

The liberal market ideology is often depicted as the overarching power of corporations over the unassuming consumers.

In its ideal form, market forces determine prices based on the elasticity of supply and demand, and both consumer and business meet their goals when both these factors reach a price equilibrium.
While pricing interventions by the government are common even in the most liberal of economies, the players that populate the market play their roles, as much as possible, in ensuring fair trade within free trade.

Governments have long played their role in optimising the facilitation of fairness and balance between consumer and commerce, yet liberalisation does dictate a limitation of state intervention - businesses are to be provided a lot of room within the boundaries of the law to compete within the market.

This is where the fine balance when economic policy and regulations should be formulated at the national level. While strong intervention may benefit internal commerce, it also goes against global trade norms, often resulting in reciprocal isolation, leading to opportunity losses for both businesses to profit, and consumers to gain better choices from a competitive market.

Playing the global game requires gradual transformation of nations towards playing by global rules. In Malaysia, national structures and policies have certainly progressed towards that direction.

Most important to this piece is how we use the freedom given, as businesses or consumers, within the boundaries mentioned above.

In an ideal world, all items we buy are priced without any positioning - the seller takes a set profit for any item or service offered, and the buyer happily accepts the transaction.

In a realistic competitive market, however, there is a fine line between being unfairly opportunistic and intelligent marketing. The power of global marketing has allowed much larger access to faraway markets, yet also opens up opportunities to misleading the public without consequence.

Price positioning, for example, is the business practice of quotating retail prices that match a particular perception of value by the consumer. While true difference between a product's quality is virtually non - existent, the "perceived" value of the product or service can be changed through supplementary services that add value to the customer's experience.

Premium food and beverage is a clear example of this. Coffee may not differ much in terms of raw material cost but the vast difference in pricing between premium cafes and your local breakfast outlet is due to total cost of sales - which may include branding, location, ambience, service and other factors that add to the customer experience.

However, the question remains - where do we draw the line between profiteering and price positioning? It is often very difficultto regulate, and stricter regulation is clearly not the answer for the same reasons mentioned above.

For example, it is widespread belief that the recent tax and subsidy restructing has led to continuous rise in living costs. While the adjustment period at the initial stages may have caused cost distruptions due to procedural adjustments, analysts have also looked at the angle of profiteering from the fear of price increases.

Also, the foreign exchange fluctuations seen over the last two years have added a multi- factorial dimension - making it increasingly difficult to tackle the true root cause of rising costs.

With that said, a higher level of information maturity would be crucial as we move further towards market liberalisation. While the government is working further to improve regulation and maintain balanced economic policies, all stakeholders - consumers and businesses alike - purchasing behaviour and decisions are made based on well balanced information.

We will explore more the roles of businesses and consumers in the next articles.

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

Friday, 2 March 2018

The resilience of humanity in evolving economies

The continent of Europe is home to the world’s leading countries with the highest automation adoption rate. Among them, Germany ranks the highest in terms of robot density, according to a 2016 report by the International Federation of Robotics.
Numerous articles and reports around the world, this column included, have pointed to the rapid transition in automation, particularly within the manufacturing sector.
Globally, the automotive industry is the frontrunner in the automation of processes due to high labour costs and skills requirements, particularly in precise, repetitive and hazardous processes such as welding, painting and in-process logistics.
The natural concern is the displacement of unskilled labour whom have been replaced by such efficient competition.
Technological unemployment is something that has occurred throughout modern history, with several case studies dating back to Britain’s industrial revolution.
For example, the introduction of mechanised looms caused disruption to jobs within textile business and left many skilled weavers out of work. This, however, opened up opportunities for unskilled labour that were in demand within the newly expanded textile industry.
While it is undisputable that technological disruptions will cause short term displacement to certain jobs, the example above demonstrates the opportunities that arise can be far greater.
The ultimate end goal of any human activity is the satisfaction of human needs. While disruptions are a natural occurrence, they do not occur to remove humanity out of human activity.
Although conventional perceptions tend to forecast loss of employment due to the replacement of jobs through automation, Germany still has the largest pool of labour within the European Union. Its education system boasts about 1.3 million apprentices from its globally renowned vocational training system.
Germany also had one of the lowest unemployment rates in the EU at 3.6 percent in last year.
A recent benchmark study by the Malaysian government analysed the structure of the German industrial infrastructure.
Overall, the German industry ecosystem maintains stronger emphasis on the tripartite relationship between industry, academia and government – each communicating clearly and cohesively on achieving industrial milestones and innovation goals.
There is a clear and distinct realisation of each other’s goals and internal interests – be it research, profit or public interest.
Significant efforts focus on ensuring automation does not cause disruptive pressure on the German workforce as well as small and medium enterprises – the backbone of any economy.
The government focuses on developing research & development capabilities, through quality education programmes in both academic and skill routes.
The private sector plays a major role in ensuring quality human capital development to ensure real-time industry exposure supplements the theoretical knowledge within their respective learning institutions.
The German framework in developing the industrial ecosystem is very similar to the setup we have here in Malaysia.
If there is one thing we can learn from the Germans, it would be their passion for innovation and the technology driven economy. Most importantly, we must improve on our abilities to effectively disseminate knowledge and information of the opportunities that lie ahead in Industry 4.0.
As we approach the new era of mobility, let us work towards an innovative and globally competitive economy – a good start would be learning from the successes (and failures) of those ahead of us.
The writer is the chief executive officer of Malaysia Automotive Institute.