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).
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).
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).
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)
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)