Thursday, 27 June 2019

Managing change key to future-proof industry

The Paris agreement signed in 2015 signified an intensified global outlook on the new environmental economy, despite a bumpy journey in the Obama-Trump transition.

Regardless, a significant takeaway is a global commitment to meet its 2030 targets - and with such a commitment comes an expectation that the economy and business practices will put a premium on new eco-friendly policy, management and technology models.

It is for this very reason that concepts, such as circular economies, social enterprises and extended producer responsibility, have surfaced in recent years.

As a nation gearing towards advanced status, it is natural that issues of the environment often find difficulty in reaching public centre stage - as deep green policy dialogue are often challenging when economic interests take a priority over them.

The common theory is economic pragmatism puts income generation above all else - any discussion on social responsibility can only come about when there is some degree of comfort and excess, or when the government or market forces themselves are willing to subsidise the "bonus" of environmental protection.

However, the paradox is when the world moves faster than income generation, to a point that we end up being disadvantaged for not applying appropriate eco-policies, and developing the scale to be part of this new environmentally responsible global economy.

In the transportation sector, the concept of Mobility as a Service (MaaS) has taken centre stage in recent years. It is a concept that integrates various transportation services - public and private - into a single, unified mobility service that can be accessed by anyone at any given time.

Traditionally, to get between two points, one had choices to either use public or privately owned vehicles. This meant that if one did not own a car, the transportation (or mobility) experience was highly dependant on the ownership of others, with natural difficulties accessing areas where there were few public transport options.

Inversely, if you owned a car, it was perhaps easier to move precisely at a time of choice and in the comfort of your own personal space, but when it came to the costs and time to find parking, the comforts of using public transportation emerges. Furthermore, the opportunity costs of vehicles sitting idle most of the time in the parking lot made the silo of vehicle ownership expensive and a waste of carbon footprint.

The concept of MaaS addresses this very problem of transportation silos. In line with environmental best practices, the general idea is to reduce vehicle ownership and encourage the use of public transportation.

The key difference is that MaaS allows customisation of transportation needs through the use of technology, providing travellers with a "menu" of available options. One may start with a bus, a train and end the journey with a car - but in this situation, the car belongs to a private owner who is sitting in his office and not using during office hours.

The description above is but a glimpse of the entire MaaS framework, but this example changes not only how we view transportation, but also how businesses need to adapt to new models.

Automotive vendors will have to consider mobility vendorship, with products that are not sold only to car manufacturers but also to the manufacturers of different modes of transportation.

Manufacturers may have to sell more to fleet owners and reduce their dependence on individual ownership. Frameworks and regulations in the case of insurance, for instance, may have to adapt to the fact that more cars will be shared by many users, and not just the title holder.

Although the business models may change, the scales of business don't disappear. The only caveat is the ability to change and adapt quickly, as well as implement change management systems that can make adaptation more rapid and with less resistance.

For the government, they key is to create a conducive ecosystem for business to flourish, human capital to develop and for regulation to spur awareness and enhance culture.

The upcoming National Automotive Policy expects to make MaaS an important pillar of future mobility development in Malaysia.

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

Thursday, 20 June 2019

Manoeuvring along new regional value chain

Last week, Malaysia welcomed the delegation from China’s Ministry of Industry and Information Technology (MIIT).

Led by Minister Miao Wei himself, I echo the sentiments of our international trade and industry minister of such a rare honour for Malaysia to receive a visit from an official of this esteem within the Chinese government.

Speaking at the China-Malaysia Roundtable hosted by international trade and industry and organized by MARii, the MIIT minister talked about the similarities between our two countries, highlighting our aspirations in the development of science, technology and engineering.

He said both countries needed to promote innovation and development, and called for a higher degree of collaboration between Malaysian and Chinese businesses in new technology innovations.

Despite China’s large economic might, the humility shown by the minister and his delegation symbolizes the common cultural values we hold here in the far east, translating into the economic policies and approaches in technological development we see today.

Looking back into history, there have been major shifts in global centers of economic and technological dominance, from ancient Greek and Roman empires shifting all the way to the Islamic civilization a thousand years later.

In modern times, the dominance of the British moved industrialization to a higher level in Europe, spilling over to North America, while the rise of Japan started shifting balance of the global economy towards the east. Today, this shift to the east has also given emergence to the new technological powerhouses of Asia – South Korea and China.

hile the world figures out the intricacies of global trade norms, the shift in global technological geo-positions closer to our region should be celebrated. With a market size that comprises close to half of the world’s population, it creates new opportunities to be part of this new regional value chain in the Far East.

Within the first half of this year, the Malaysian government had already renewed its ties through working visits to the technological powerhouses mentioned above – thus creating new inroads for collaborations and trade partnerships between Malaysian businesses and Japanese, Korean and Chinese corporations.

From the industry perspective, these economies along with Malaysia form the handful of economies in the world that possess full-fledged automotive design, development and manufacturing capabilities.

However, in a fast-moving world, connected mobility is fast the concept of full-fledged automotive economies are also quickly evolving.

As discussed in previous articles in this column, the automotive sector will eventually evolve into the overall mobility sector, where the vehicle is connected to every aspect of our logistics, daily activities, work and school life, and others.

This ecosystem challenges the norms of traditional vehicle manufacturing, sales and after sales business models

However, at the core of this transformation process is the successful shift towards policy that is based on Next Generation Vehicles (NxGV), Mobility as a Service (MaaS) and Industry 4.0 adoption.

To create an ecosystem conducive for the local development of these tech, it is key that new tech centres are established, including eco-car assessment programmes, autonomous vehicle test beds, full-fledged vehicle type approval centres, as well as centers of excellence in manufacturing, advanced robotics, internet of things and overall mobility.

As the region develops technologically in this era of connected mobility, it will created new in-roads for a regional value chain within the Far Eastern Region, close to the Asean region.

These new developments are a testament of Malaysia’s foresight in the timely planning and implementation of a renewed automotive direction towards connected mobility, as it paves the path for meaningful participation of Malaysia in the new era or science, technology and engineering.

The key takeaway here is that as the wave of global technological economy shifts our way, it is important that we learn, study and participate along with others who have achieved tremendous success.

The best in the world are who they are because they train with the best on a daily basis.

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

Thursday, 13 June 2019

Potential trade opportunities in South America

International Trade and Industry Minister Datuk Darell Leiking recently concluded a trade mission to South America, with the Malaysian delegation strengthening economic ties with Chile, Argentina and Brazil.

I had the great honour of accompanying the minister and MITI officials throughout the trade mission, along with senior counterparts from the Malaysia External Trade Development Corporation (MATRADE) and the Malaysian Investment Development Authority (MIDA), both sister agencies of Malaysia Automotive Robotics and IoT Institute (MARii) under MITI.

These South American economies have a lot in common with Malaysia.

The first stop was Santiago, Chile, one of the most competitive economies in Latin America, where the Malaysian delegation connected with the Chile-Malaysia Chamber of Commerce (CAMCHIMAL) and Chamber of Automotive Parts and Components (CAREP).

The meetings explored the opportunities to improve trade and investment relations in various sectors including automotive, ICT mobility solutions, and Internet of Things (IoT) sectors.

An important outcome of the Chilean round is that both countries agreed to organise a high impact showcase of each other's strengths and capabilities in automotive component design and production in Chile by the end of this year.

The next leg of the trade mission was Buenos Aires, Argentina - Malaysia's third largest trading partner in the South American continent.

During the visit, the trade mission spent time with Argentina’s Production and Labour Minister, Dante Enrique Sica, on possible collaborations in the areas of Industry 4.0, robotics, Internet of Things (IoT) and automotive parts and components.

The next round of talks were held in Brasilia and Sao Paulo, Brazil - a nation with a large market size and sophisticated business community.

It is important to note that many opportunities exist from the similarities between Malaysia and the largest country in this region, particularly in the trade of automotive parts and components, as well as new opportunities in the remanufacturing sector.

Overall, the trade mission was an eye-opener to the similarities and aspirations our nations have in developing our respective economies.

As one of strongest proponents of connected mobility in our region, the possible connection between our two countries across the South Pacific poses new opportunities for Malaysia - with interest growing in the region for partnerships and collaborations in new technology areas.

Malaysia also sits in a geographically as a gateway for automotive trade directly across the South Pacific Ocean.  The inflow and outflow of products and services along this route allows for new value chains to be built and developed between the ASEAN and LATAM regional markets.

For example, the 4R2S standards - the first of its kind in the world - was introduced through MARii in 2016 for the governance and implementation of repair, reuse, recycle, remanufacture, services and spare parts within the automotive sector. This creates new opportunities in the areas of awareness, consultation and certification of such standards within the global markets.

The growing connectivity sector opens up new avenues for business in the emerging Mobility-as-a-Service sector, which includes the numerous IoT based products and services, in particular system integrator companies looking to provide alternatives for technology.

These businesses have tremendous potential applications in mining, agriculture and even e-hailing, as the business demands are not yet fully developed within this region.

I hope the long Raya break has given us the needed rest and served as a refresher to return to work more determined and productive. It is now time to face new challenges, and take these new opportunities and start planning for bigger things for the remainder of the year.

I'd also like to wish my readers Selamat Hari Raya, Maaf Zahir Batin.

"The secret to success is to be ready when your opportunity comes"

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