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.