MAKE THE LEAP TO ‘IN­DUS­TRY 4.0’, MIDA TELLS MAN­U­FAC­TUR­ERS

The Malaysian In­vest­ment Devel­op­ment Au­thor­ity (Mida) has turned 50. Hav­ing driven Malaysia into be­com­ing one of the most at­trac­tive profit cen­tres in Asia, Mida is now look­ing at an econ­omy which will be sup­ported by a strong and smart man­u­fac­tur­ing base

New Straits Times - - Front Page - LOKMAN MANSOR AND RUPA DAMODARAN KUALA LUMPUR bt@me­di­aprima.com.my

MALAYSIA re­cently launched the world’s first Dig­i­tal Free Trade Zone (DFTZ), with the pres­ence of Chi­nese bil­lion­aire and en­tre­pre­neur Jack Ma hav­ing rekin­dled in­ter­est in Malaysia’s in­vest­ment ecosys­tem which has been recog­nised as one of the most at­trac­tive in the re­gion over the decades.

The DFTZ po­si­tions Malaysia ahead of the e-com­merce curve and fits in well with the coun­try’s em­pha­sis on smart man­u­fac­tur­ing to drive in­no­va­tion.

Man­u­fac­tur­ing will con­tinue to be a main­stay of the econ­omy, although with the rapid changes in the land­scape — the play­ers, both large and small — will need to be con­tin­u­ously proac­tive, said Mida chief ex­ec­u­tive of­fi­cer Datuk Az­man Mahmud.

As in the past, man­u­fac­tur­ing ac­tiv­i­ties will con­tinue to have a mul­ti­plier ef­fect on ac­tiv­i­ties and growth, he said.

“There is this im­pres­sion that in­vest­ment in man­u­fac­tur­ing is not so ex­cit­ing but it is this sec­tor which has pro­vided the big­gest mul­ti­plier ef­fect — in­dus­trial prop­er­ties, job cre­ation, trans­porta­tion and lo­gis­tics which have en­abled in­creased con­sumer spend­ing.”

From as­sem­bly-type man­u­fac­tur­ing, the vista has now in­cluded smart man­u­fac­tur­ing. With the Fourth In­dus­trial Rev­o­lu­tion (In­dus­try 4.0), there would be more in­no­va­tion to pro­vide em­ploy­ment op­por­tu­ni­ties.

The man­u­fac­tur­ing projects ap­proved last year are ex­pected to cre­ate em­ploy­ment op­por­tu­ni­ties for 64,120 peo­ple.

Ma­jor in­dus­tries which re­quire the most skilled man­power are trans­port equip­ment, elec­tri­cal and elec­tron­ics (E&E), fab­ri­cated met­als, ma­chin­ery and equip­ment, plas­tic prod­ucts and non­metal­lic min­eral prod­ucts.

There will be job op­por­tu­ni­ties for plant main­te­nance su­per­vi­sors, tool and die mak­ers, ma­chin­ists, in­for­ma­tion tech­nol­ogy per­son­nel, qual­ity con­trollers, elec­tri­cians and welders.

Az­man, who has helmed the agency since early 2014, is pleased with the ini­tia­tives un­der­taken by some home­grown com­pa­nies such as ViTrox and Tiong Nam Lo­gis­tics Hold­ings, which have tran­si­tioned these play­ers to po­si­tions of strength to­day.

“It is no longer a mat­ter of choice for man­u­fac­tur­ers out there. They have to switch to smart man­u­fac­tur­ing, they have to im­prove their pro­cesses to more mod­ern equip­ment, in­cor­po­rat­ing the In­ter­net of Things ap­pli­ca­tions,” he said in an in­ter­view.

With­out tech­nol­ogy, man­u­fac­tur­ers will not be able to max­imise pro­duc­tion and ef­fi­ciency.

Re­gion­ally, Sin­ga­pore, Viet­nam and Thai­land have also an­nounced their plans for In­dus­try 4.0.

“It is a wake-up call for every­body, that you have to be on board.”

Az­man has been trav­el­ling around the coun­try and found that many have taken the step of not re­ly­ing on man­ual op­er­a­tions.

“So, some­thing is de­vel­op­ing, things have changed as busi­nesses recog­nise that this is a mat­ter of sur­vival,” he said, adding that a study is be­ing un­der­taken on the fu­ture of man­u­fac­tur­ing devel­op­ment in Malaysia.

On the mul­ti­plier ef­fect, Az­man said although man­ual jobs may de­crease, there will be high-skill jobs to man­age the smart ma­sup­port chines, with the of soft­ware en­gi­neers and de­vel­op­ers.

“Ma­chines talk to each other as data is be­ing trans­ferred and you need peo­ple to man­age that, so new jobs will be cre­ated. There are some talks that with au­to­ma­tion and ro­bots, jobs will be re­placed but peo­ple don’t talk about the new jobs to man­age and main­tain these ro­bots.”

Mida is do­ing its part to get more of the smaller com­pa­nies to gen­er­ate their own re­sources inon stead of de­pend­ing the gov­fa­cil­i­ties. ern­ment for One of its re­cent moves was to iden­tify those which can seek list­ing on Bursa Malaysia.

The agency, un­der the purview of the In­ter­na­tional Trade and In­dus­try Min­istry, is well-recog­nised for pro­vid­ing busi­ness op­por­tu­ni­ties and jobs — the spillover ef­fects of in­vest­ments — in the coun­try.

Last year, a sig­nif­i­cant por­tion of ap­proved in­vest­was ments by Mida capital-in­ten­sive projects and 10 of them were worth at least RM1 bil­lion each.

These were mainly petroleum prod­ucts in­clud­ing petro­chem­i­cals, ba­sic metal prod­ucts, nat­u­ral gas, E&E prod­ucts, food man­u­fac­tur­ing and trans­port equip­ment.

The sub­stan­tial mul­ti­plier ef­fect in­cluded for­ward and back­ward link­ages, the devel­op­ment of sup­port­ing in­dus­tries, the trans­fer of new tech­nolo­gies and re­search and devel­op­ment, the cre­ation of em­ploy­ment op­por­tu­ni­ties, lo­cal sourc­ing, skills devel­op­ment, and the gen­er­a­tion of for­eign ex­change earn­ings.

The shift in fo­cus over the decades also saw the growth in the num­ber of ap­proved in­vest­ments.

From agri­cul­ture and min­ing in the 1950s and im­port sub­sti­tu­tion in the 1960s, the econ­omy shifted to ex­port-ori­ented ac­tiv­i­ties and labour-in­ten­sive in­dus­tries in the 1980s be­fore turn­ing into heavy in­dus­tries in the 1990s.

With the turn of the cen­tury, Malaysia also moved into high­tech­nol­ogy in­dus­tries within the first decade after eco­nomic cor­ri­dors were set up.

The next nat­u­ral move was in­no­va­tion, and now the fo­cus will be on achiev­ing the high-in­come na­tion sta­tus by 2020.

In­dus­trial es­tates, free-trade zones and li­censed man­u­fac­tur­ing ware­houses were soon set up.

The move at­tracted top multi­na­tional cor­po­ra­tions to Pe­nang, in­clud­ing the “eight samu­rai” which are Ad­vanced Mi­cro De­vices, Hewlett Packard (now Agi­lent Tech­nolo­gies), Clar­ion, Na­tional Semi­con­duc­tor (now Fairchild), Hi­tachi (now Re­ne­sas), Litronix (now Os­ram Opto Semi­con­duc­tor) and Robert Bosch.

From then, Mida em­barked on ag­gres­sive pro­mo­tions by set­ting up cen­tres over­seas.

In the sec­ond and fi­nal part to­mor­row, Az­man will touch on ar­eas which in­vestors are con­cerned most with in Malaysia — the ed­u­ca­tion sys­tem, hu­man capital, in­fra­struc­ture and pub­lic misconception of Mida.

So, some­thing is de­vel­op­ing, things have changed as busi­nesses recog­nise that this is a mat­ter of sur­vival.

Mida CEO Datuk Az­man Mahmud

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