Focus on fundamentals key to competitiveness
Previous articles in this column have focused on the need to increase accessibility of the automotive industry to more players, to allow higher penetration of technology based jobs and businesses throughout the nation.
To spur such penetration, government policies need to be structured to reduce economic barriers of entry into the automotive sector, especially for those with capital disadvantages. The increase of business participation will then further increase employment opportunities and career advancement within the automotive industry.
The 2017 budget has taken the timely direction of strengthening the fundamentals of the economy, with strong focus on the development of skilled talent, as well as small and medium enterprises (SMEs).
Businesses, in particular SMEs, will benefit most from next year's budget through allocations for entrepreneurship, export enhancement and the digital economy. A significant allocation has been announced to make 2017 as the Startup & SME Promotion year.
A key incentive from the budget is a corporate tax rate reduction for SMEs between 1 to 4 points for companies with significant increase in taxable income, and overall reduction by 1 point for the first RM500,000 of taxable income.
This is a significant cash saving measure for companies with an expanding revenue base to further enhance their capabilities in the near future, especially in technology based investments.
Agencies under the Ministry of International Trade & Industry (MITI), Matrade, MIDA and SMECorp will offer RM130 million worth of export promotion programmes under the 2017 budget. Coupled with financing, insurance credit facilities and interest rate rebates mentioned in the budget, a total allocation of RM350 million is available to the advantage of SMEs.
This is a timely announcement to assist Malaysian automotive component manufacturers to initiate their export readiness programmes.
The RM4.6 billion allocation for Technical Vocational Education and Training (TVET) is a good move to strengthen skill based education, essential in enhancing the talent needed within our techno-centric industries, in which the automotive industry is a beneficiary of.
This announcement is a key for the automotive sector, as this is not just a signal of renewed government support for skills development within the industry, but sends a strong message that the key to success is defined by the talents that are unique to individuals. It recognizes that the academic route, albeit very important, is not the only pathway towards career advancement and success.
Specific to the automotive industry will be the Automotive Industry Development Programme (AIDP), which aims to create 7,800 new job opportunities, 190 new businesses, enhance 1,440 existing companies and further develop 5,950 careers within the industry.
The programme, which will work hand in hand with the numerous capacity building programmes developed by MAI since the announcement of the National Automotive Policy 2014 (NAP 2014) will strengthen the wide array of competencies and capabilities of OEMs, vendors, and after sales businesses - addressing core corporate governance and career development in automotive product and process design, manufacturing productivity and quality assurance.
These programmes will push the industry closer to its target of making Malaysia a regional hub for EEVs by the year 2020.
"In a world of constant change, success is the natural consequence of consistently applying the basic fundamentals."