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).



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