Thursday, 26 December 2019

Moving into the next decade

Come June next year, it would be 10 years since I took the helm of what I consider the most challenging job in my management career.
Malaysia’s automotive industry had just entered its fourth decade. My first task was straightforward but challenging — with the help of experts in the industry, I was to lead a team to formulate a way forward for the automotive industry.
On the global stage, it was a time when the hype around electric vehicles was gaining momentum,thanks to Tesla steamrolling the development of its carbon-free products.
New innovations, such as nanotechnology, lightweight chassis materials and fuel-cell engines, began showing promise, which was exciting to car owners around the world, of a new future in transportation.
The challenge for Malaysia was its domestic sales and quest for increased exports. Total industry volume was fluctuating around the 600,000 mark, and national car “fatigue” started to seep in the morale of both consumer and producer.
A paradigm shift in thinking was needed to spur the industry’s growth. The National Automotive Policy was revised in 2014, focusing on energy-efficient vehicles as a common direction.
Customised incentives were introduced to allow better investment returns in higher value-added activities along the industry value chain.
The policy also broadened its scope into business performance in lower, or separate tiers of industry sectors, such as parts and components and the aftermarket sector.
The successes have been documented in this column throughout the years. The key point of this final piece for not just this year but also the entire decade of progress we have
endured is — as we move into the next decade, another paradigm shift in our industry’s thinking is timely, and we must act now, not just from business point of view, but also from the consumer’s perspective.
As we move into 2020, we must consider what the global producer and consumer are focusing on. Firstly, it is clear that global car makers are responding to trends in connectivity, as the new generation of drivers (and commuters) will be most in sync with the cloud, prioritising convenience, ease of use and active safety — digitalisation of transportation demands are expected to rise exponentially.
This transportation is not only about movement from point A to B, but the digitalisation of all aspects of our daily lives that require modes of transportation from food delivery, retail and home to car maintenance.
While the United States is seeing increasing profits in vehicle sales, it is the inverse in Europe due to the reduction in direct vehicle purchase—giving in to the rise in ride-hailing and other forms of vehicle ownership models, as public transportation in these regions improves.
While car prices in Malaysia remain competitive, the total cost of ownership had been significantly lower when fuel prices, insurance and maintenance were factored in. Perhaps the situation seen in Europe will be seen domestically in the years to come, as our public transportation improves in urban areas and the new mobility options present themselves over time.
Secondly, as energy consumption around the world becomes a more pressing issue, energy costs and environmental consciousness are expected to impact our business strategies for exportability to remain within our radar.
The protests seen at this year’s Frankfurt Motor Show is an example of consumer temperature over the next few years in terms of the transportation carbon footprint.
Mobility products and processes are expected to grow in complexity and add cost pressure, as the world moves towards higher demands of environmental regulations and safety standards.
Trends clearly indicate a stronger push towards autonomous driving, with the evolution of driver assistance becoming more sophisticated in the form of lane guidance, emergency braking assistance and eventually automatic self-corrections and traffic adaptation.
While it may take time for fully autonomous driving to be a reality on the road, this evolution requires significant reform in business strategies in the direction of technology invention, innovation and adoption — the core of this technological advancement lies in the mastery of future industries that include big data management, robotics and Internet of Things.
This mastery is not limited to automotive businesses, but for all to participate in the grander mobility industry, in which cities, agriculture, marine operations, finance, logistics, commerce and many more will form a massive framework where business opportunities are plentiful.
Therefore, the paradigm shift for next year is one of immersive technology, not just for our local market demands, but also an ever-increasing demand in the global markets if we are to remain competitive.
It is for this exact reason that Malaysia Automotive, Robotics and IoT Institute was rebranded to enhance adoption of such technologies—with more programmes to be developed to cater to the specific technology areas covered under future industries and mobility.
A future of next-generation vehicles, mobility as a service and smart manufacturing technology and innovative materials is upon us.
I’ve mentioned numerous times about moving Malaysia from a consumer to producer nation, and I believe we have to move not just to a nation of producers, but also one of thought leadership.
I wish my readers Season’s Greetings and a great era ahead.
The writer is the chief executive officer of Malaysia Automotive, Robotics and IoT Institute.

Thursday, 19 December 2019

Advances in Mobility Sector

One important lesson I’ve learned in policy development is about the evaluation of performance on a macro scale. Humans prefer things to be simple and relatable to their personal world view. In contrast, policies are created to cast as wide a net as possible, serving every interest and stakeholder and trying to bring the best out of every aspect.
Due to the human nature mentioned above, it is also natural that — based on popular interest and market segmentation, we are served with a handful of indicators that attempt to paint a holistic picture of the state of the industry. For a few decades, we measured domestic sales and production as our way of measuring the industry’s success — we commonly know these figures as total industry volume (TIV) and total production volume (TPV), respectively.
As long as we keep selling and producing more, we are deemed more successful. We soon realised that the TIV and TPV figures placed players in the same category and did not take into account the entire value chain. They were also affected by trends in changing ownership behaviour, increasing carbon footprint awareness, market saturation and economic fluctuations. Over time, we’ve learned to look at industry success through a wider scope, falling back on the reason we decided to take the bold step of going automotive in the first place — to spur local participation in new technology.
We started measuring the number of new jobs and businesses created, as well as our success in encouraging exports of new and remanufactured parts and components. We also looked at the capabilities of our after-market sector and, most recently, the ability of our local industry. Although the sales figures of our national cars went through fluctuation, it nonetheless created the ecosystem we needed to
industrialise.
While it is important to know how our regional competition is growing, spurring basic assembly no longer is the only consideration on incentivising investments. Growing investment figures are always welcome, but they must also convert into more participation in higher-value activities, such as a design, engineering and strategic planning. After all, Malaysia is not trying to get out of poverty, our targets must be aligned with the goal of becoming an advanced nation.
To this end, through Malaysia Automotive, Robotics and IoT Institute, the International Trade and Industry Ministry will report the holistic growth at the start of each year. It looks not only at numerical figures, but also nonnumerical value that signifies the growth of industry.
While 2018 saw its highest records of energy-efficient vehicle penetration, parts and components exports, and remanufactured component exports, this trend is expected to increase further by the end of the year. As we move into the era of connected mobility, we have launched numerous programmes to enhance small and medium enterprises’ performance in new sectors created in the digital economy. We have created programmes to spur participation in Mobility-as-a-Service, launched new vehicle workshop business models,
and introduced schemes aimed at bridging the gap between the rural and urban economies to allow participation in the technology industry of connected mobility.
By the end of this year, more automotive businesses will have increased their capacities in product and process design, in line with Industry 4.0. Most importantly, we will have developed capacity to re-align ourselves to our objectives of setting up the national car four
decades ago — creating an industry that not only allows for meaningful participation in technology, but also creates the necessary spin-offs to other sectors — such as agriculture, tourism, furniture and forestry that have been par t of our economic ecosystem and also new ones we can participate in.
At the end of the day, success is a journey and not a destination. When a race is viewed from afar, it is easy to spot who is in front or behind us. However, we must get closer to the track to see the obstacles that are slowing us down, work together to remove them and allow for a clear path ahead.
The writer is the chief executive officer of Malaysia Automotive, Robotics and IoT Institute.

Thursday, 12 December 2019

E-Commerce key part of MaaS

If you have hailed a ride with a Grab app, ordered food online to be delivered or purchased something using an online shopping app — you have not only experienced e-commerce, but also Mobility-as-a-Service (MaaS). You are also fortunate to have experienced the first steps towards a new world, change of lifestyle and new business models that will be prevalent in the future, where connectivity becomes the core driver to enhance purchase and service delivery process.
In a previous article, this column discussed the key nuances of MaaS versus current mobility models. In short, the key takeaway of MaaS is the unlocking of new business methods and models, changes in modes of vehicle ownership and transformation of service delivery, spurred by advances in cloud connectivity. When it comes to services such as the use of ride-hailing, online purchase and delivery as mentioned above, they depend heavily on technology surrounding eCommerce.
The public is familiar with the concept of e-commerce from a retail point of view whereby the consumer is presented with a catalogue or menu, makes the purchasing decision, pays through an online payment gateway, and waits for the product or service to be delivered. However, behind the scene, a myriad of sub-operations take place to fulfill the order, such as inventory management, financial transactions between suppliers, banks and retailers and delivery couriers. While most e-commerce platforms take this form, the future remains wide open with opportunities to digitalise various aspects that complete the commerce cycle.
As I explained in my previous article, the need for transportation remains constant as mobility becomes a service while ownership models evolve. E-commerce would also be subjected to the same change in business thinking, as it is perhaps still very far from its final form. Today, the above processes are widely available — perhaps no longer even seen as revolutionary as before. As the commerce models evolve, we must know that the product, service and the need for transactions and delivery will remain, and perhaps new demand segments may be discovered because of the digitalisation of commerce.
My point is we must always be on the lookout for opportunities to improve and add value to the digitalisation of the commerce chain. This becomes more important as demand for higher complexity becomes inherent in our business operations. In future, operations such as supply chain management, just in-time orders, product planning, production queues, engineering changes, marketing insights and many more might be pushed through the e-commerce system.
In fact, it will become an important aspect, if not the most, to manage in future business. The customer would have the ability to select, but also customise orders to his or her specific tastes, and to respond, the business owner (future owners) must have the capability to reach a good level of mass customisation to remain competitive.
While it may sound daunting, the future of e-commerce is one that is more inclusive. Firstly, cross-border market access is bridged through the cloud. Secondly, given the range of services to be utilised in the e-commerce ecosystem, startup companies have better chances for scalability due to high demand of highly specialised technology along the entire e-commerce retail chain. When combined with the technology of connected mobility, that chain is longer than the mind can imagine.
This week, MARii launched the MARii Mobility-as-a-Service (MaaS) Scale Up Programme to facilitate the adoption of MaaS related technologies and services in the domestic mobility industry to enhance the e -commerce ecosystem. As e-commerce advances, the change of business thinking and strategies towards digitalisation strategies must be made a top priority.
The writer is the chief executive officer of Malaysia Automotive, Robotics and IoT Institute.

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).

Thursday, 17 October 2019

2020 Budget from technological standpoint

THE 2020 Budget was perhaps one of the most important tests for the government—it was tabled as Malaysia was finding its new definition on the global stage.
The main challenge was to balance the bread-and-butter issues and the allocation for efforts to elevate Malaysians from the income traps they are in.
On top of that, the pressures of rapid global innovation forced some out-of-the-box thinking. The technologist in me will of course look at the 2020 Budget from a technological standpoint.
The first step in accelerating progress is to address the structure at the bottom of the economic ladder.
For me, the advances in this budget are primarily the apparent shifts seen in administrative mindset — which in all honestly, boldly challenges norms and current sentiment in order to do the necessary.
Firstly, the fuel subsidy rationalisation took a rather big change as reallocation was provided to the B40 (Bottom 40 per cent household group), who needs it the most.
This is perhaps a significant paradigm shift for a country that is used to subsidies.
However, perhaps it is time we ease into the idea of fuel efficiency — after all, public transportation in the Klang Valley is going through a major transformation, and fuel efficiency has been a key agenda for more than half a decade now.
However, while the austerity debate goes on, a highly applaudable allocation is a continued increase of allocation for Technical and Vocational Education and Training (TVET), which stand at RM5.9 billion.
The increased allocation adds a new dimension to social upward mobility as the human capital development aspect is essential for a sustainable techno logical ecosystem and runs hand-in hand with financial considerations towards the adoption of smart automation within the industry and reduce our dependence on foreign labour.
Most importantly, the cliche is true — an investment in education is an investment in the future. Today, education and skills are viable routes to help Malaysians climb the socio-economic ladder.
Next, which I believe deserved more attention, is the allocation for technological advancements among Malaysian businesses.
It is the right step in spurring smart manufacturing, particularly in incentivising the adoption of automation technology to boost productivity and quality.
The announced extension for Accelerated Capital Allowances (ACA) as well as matching grants for 2,000 manufacturing and services companies is a welcome move — particularly as investment decisions in automation are a key consideration for businesses, especially small and medium enterprises within the automotive and mobility sectors.
Since the National Policy on Industry 4.0 (Industry4WRD) was announced last year, the International Trade and Industry Ministry has held numerous programmes to help local companies embrace automation through the development of technology strategies in their business plans.
The 2020 Budget would definitely make this adoption process easier as financial barriers can be lowered.
More importantly, it boosts business confidence in automation investments as the budget demonstrates the government’s stronger commitment to developing Industry 4.0 technology within the local ecosystem.
Overall, I feel the 2020 Budget is a realistic, yet forward-looking budget that is in line with the common senses of technological progress.
While it looks at key opportunities of economic progression through adoption of technology, it also addresses basic access to livelihood — after all, nobody thinks about progress if they are busy searching for basic necessities.
As we enter the final quarter of this decade, our mindsets have changed — Malaysians are now debating progressive issues that move us forward and starting to leave pure sentiment behind.
This budget laid the specifics to achieve such progress.

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

Thursday, 10 October 2019

Importance of training, ‘ecosystem of excellence’

IN order to develop highly skilled, productive teams, the prescribed approach is the training of talents.
However, while the quality of training is incumbent on the quality of the trainer and modules, there is an important factor that determines the speed of learning — the ecosystem one is exposed to.
In sports, for example, it is common to see continued dominance of certain teams or countries. They continue to be the best and produce the best players. It is a tremendous advantage when you train on a daily basis with the best players.
This “ecosystem of excellence”, can be observed in daily development as well. For example, language skill is best developed in an environment where it is spoken correctly.
Careers are enhanced with highly-competitive and capable managers, peers and mentors. Businesses thrive when they have a competitive ecosystem of strong customers, suppliers, partners and a healthy supply of talents around them.
It’s true that practice makes perfect, but we have to practise things correctly, otherwise our practice will perfect a wrong method.
Last week, the government announced the Shared Prosperity Vision 2030 (SPV 2030), to develop a holistic, all-inclusive economic ecosystem for Malaysia across all walks of society in high value, equitable distribution of prosperity and wealth. Seven strategic thrusts were introduced and the framework of SPV 2030 will be implemented in the upcoming 12th Malaysia Plan.
In a nutshell, the seven thrusts envision the framework for a fair and shared prosperity for Malaysians with key focus on higher participation of small and medium enterprises and micro businesses, and more technology penetration among manufacturing and services subsectors. This is followed by increased participation in key economic growth activities, human capital development, fair labour markets, social wellbeing, regional inclusion and social capital.
In this regard, the ecosystem of excellence comes into play. There needs to be a core economic activity, common to all, to ensure concepts are practised with space allowed to learn through the building of experience.
Remember, right talent and experience are important to ensure social upward mobility is created for more people.
The right experience trickles down through economic vehicles that grant access to meaningful participation in high-technology economy. This is where the mobility sector comes in as one of the providers of high-value ecosystem. While it may have relatively higher barriers of entry, they are no longer an issue of capital investment, but rather talent, experience and a touch of boldness to brave the future of high technology.
When the automotive sector was established around three decades ago, it created a higher value among local companies. While we had presswork factories, injection moulding and other basic manufacturers, they were limited to low tech and basic products that did not possess the demand and rigour of auto parts and components of the same base material.
Automotive products not only require precision in design and tooling, but must undergo severe test requirements before they can be approved for mass production. This demand elevated local businesses to a higher technical standard, breaking their glass ceiling in a way that was not possible if we were to stick to manufacturing conventional products.
Furthermore, a high-value ecosystem serves as a platform to boost those at the bottom of the social ladder. The growth of the industry creates openings to start new careers.
While they may start at the bottom, the depth of the automotive industry provides career paths that build experience, skills and most importantly, human capital value.
I have seen this first hand in the careers of numerous Malaysia Automotive, Robotics and IoT Institute’s Industry Led Professional Certificate graduates, who started as school leavers but now have strong skill-based careers.
They received national skills certification after gaining experience in automotive manufacturing and after-sales operations.
In conclusion, the mobility sector creates new opportunities for industry players seeking to break the glass ceiling of technological development.
The challenge of developing equitable prosperity and shared wealth begins with challenging our reservations and venturing into sectors that can only succeed through shared goals.
The writer is the chief executive officer of Malaysia Automotive, Robotics and IoT Institute (MARii)

Thursday, 3 October 2019

Connectivity forms foundation for mobility

JUST this week, the Malaysian Communications and Multimedia Commission announced the rollout of 5G demonstration projects to expedite the deployment of 5G connectivity in various industries.
The rollout will feature use cases for numerous technologies, such as smart traffic lights, smart parking, remote diagnosis, medical tourism, remote medical consultation, smart agriculture, augmented reality for education, and vehicle tracking.
While 5G connectivity translates to faster Internet connection and download speeds, the key takeaway for the next generation of mobile communication lies in lower latency or in simple terms, a significant reduction of the amount of delay to send information over the mobile connection.
The reduction in latency is a key requirement in vehicle connectivity as real-time decisions when a car is in motion must be performed in fractions of a second — it paves the way for the development of next generation vehicles, which will eventually lead to complete vehicle autonomy.
While experts say Level 5 autonomy is still a decade or so away, when this point of no return eventually arrives, the infrastructure and availability of connectivity will be non-negotiable.
For a nation with the aspirations of being part of the producers’ pool in the future technology markets, this places the mapping of technology development at a high priority at both business and policy levels.
Today, it is apparent that connectivity has changed our lifestyles, which started with the increased flexibility and connection speeds on our mobile phones. Mobility-based services, such as food delivery and ride sharing, have become a norm for many walks of life.
In fact, the emergence of national level discussions surrounding these issues shows the level of penetration and dependence on new connective technologies and significant awareness among Malaysians.
Although there are issues to address and room for more improvements, the fact that national attention has been given to these services means that the landscape for mobility as a service is changing rapidly in the country.
The demand for more connectivity is starting to gain traction in the automotive sector as well. For example, many drivers are now bypassing their built-in infotainment equipment and connecting their services directly to their phones, using applications such as GPS navigation, music libraries and audio book readers directly from the Internet.
Many vehicle makers are introducing new built-in infotainment models that cater to this at the point of sales, making vehicle connectivity an almost seamless experience. New vehicles in the premium market have also introduced more connective features in the vehicle packages they offer.
However, the establishment of the connectivity ecosystem is not only about telecommunications and app development. It involves a myriad of technologies that support the entire sector, including cybersecurity, fleet management systems, traffic management, e-calls and payment systems.
They require the current critical mass we have developed in fields such as mechanical, electronics, manufacturing and chemical engineering, as well as new experts and business support in new fields that expand the utilisation and application of such technologies.
These sub-sectors form the basis to ensure a healthy connectivity ecosystem and form the space and grounds for opportunities in new jobs and talent to flourish and develop.
To this end, the government is working hand-in-hand with industry and academia to develop a comprehensive vision map towards the involvement of local talent and business in the new mobility ecosystem as we move closer to finalising the revision of the National Automotive Policy.
It is hoped that these new dimensions will go beyond a paradigm shift for the automotive and mobility sector and spin off to other industries—sectors that must also shift towards relevance in the age of the Fourth Industrial Revolution in order for a mobility ecosystem to be complete.
The future begins with advanced connectivity, and we cannot afford “latency” in responding to new trends.

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

Thursday, 26 September 2019

Emerging IoT tech to support NxGV ecosystem

AS mentioned substantially in this column, the most important aspect to build a hub for next generation vehicles (NxGVs) is the development of its surrounding ecosystem.
We have learnt that an automotive industry—which will evolve into the mobility industry in the near future — is not about vehicle assembly, but also about the industry generated to support the vehicle assemblers.
These include parts and components manufacturers, tool makers, machine builders, after sales and service, even marketing and educational institutions.
It is for this reason, we are looking at the development of the automotive industry holistically.
While local car manufacturers have shown tremendous progress in the highly competitive global and regional markets, exports of parts and components have almost tripled in the past five years.
The number of highly skilled engineers and designers have increased and while it may not have received extensive coverage, we are exporting our design and engineering services to countries that require their talent.
This column had highlighted that as we move into future mobility, business activities were no longer limited to plastic, metal and other conventional components and materials.
The complexity of vehicles will turn our future transportation into living cabins — a high technology mobile phone on wheels or a new living and working space that changes our commute through the advent of faster connectivity, increased vehicle intelligence and autonomous technology.
The ecosystem surrounding vehicle manufacturers will also expand in its scope.
Businesses in areas such as big data analysis and management, cloud computing, drone technology, artificial intelligence, smart commerce, e-learning and others are now part of the expanding mobility sector.
Since the Malaysia Automotive Institute was rebranded to Malaysia Automotive, Robotics and IoT Institute (MARii) and given new mandates in December last year, it has seen the ecosystem for new technologies grow ing slowly.
Many of the companies were featured at the Malaysia Autoshow 2019.
Some of the technologies featured included smart homes, workshop management systems, telematics command centres, and augmented reality application in vehicle repair and training.
MARii had also published numerous articles, videos and events covering businesses that add technology value to their products and services, including aftersales commerce applications, vehicle engine control unit (ECU) tuning, and IoT hardware and software development.
The uptake of new businesses, particularly small and medium enterprises (SMEs), in next generation vehicle technology is encouraging, and we hope to meet and develop relationships with companies in more areas of specialisation in the future.
In the meantime, the transition into capabilities in next generation vehicles, mobility-as-a-service and manufacturing technology associated with the above products and services will be a primary focus for the government in the near future.
The development is not limited to new businesses, but also existing businesses that can take advantage of their current expertise in vehicle and component production into the next era of advanced mobility.
As we draw closer to finalising the new National Automotive Policy the transition into future mobility models is highly achievable and if the government, industry and stakeholders renew their focus on the correct technology adoption, reskilling of talent, and de-conventionalise their business approach.
We have the potential to emerge as a prime mover in next generation vehicle technology.

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