Malaysia’s unique story

In­dus­try 4.0 has paved the way for a shar­ing econ­omy

New Straits Times - - News - HE life­style of the or­di­nary con­sumer has changed thanks to the dis­rup­tive nature of tech­no­log­i­cal change on busi­nesses, which have en­abled the av­er­age Malaysian to make in­formed de­ci­sions, from the clothes they wear and the food they eat to what they rid

RUPA DAMODARAN KUALA LUMPUR news@nst.com.my

TIn the in­au­gu­ral Dig­i­tal Com­pet­i­tive­ness Rank­ing re­port from the Swiss busi­ness school IMD World Com­pet­i­tive­ness Cen­tre, Malaysia has been recog­nised as among the top two dozen coun­tries in the world which have earned high marks for its dig­i­tal pro­file. Malaysia ex­hib­ited five fac­tors of strength, chalk­ing up scores for the top 10.

In terms of knowl­edge, which cov­ers as­pects such as strengths in tal­ent, train­ing and ed­u­ca­tion, and sci­en­tific con­cen­tra­tion, Malaysia ranked sec­ond in terms of the sci­ence grad­u­ates pro­duced. While the qual­ity of sci­ence grad­u­ates was lauded, there were also in­her­ent weak­nesses iden­ti­fied by the re­port and they pointed to fac­tors such as the net flow of in­ter­na­tional stu­dents, the reg­u­la­tory frame­work when it comes to start­ing a busi­ness and the In­ter­net band­width speed.

The re­port noted that while busi­ness agility has im­proved in terms of fu­ture readi­ness, Malaysia needed to im­prove in terms of sub-fac­tors such as adap­tive at­ti­tudes, es­pe­cially where it in­volves IT re­tail­ing and IT in­te­gra­tion, where it in­volves e-gov­ern­ment.

Although the fac­tors break­down in the re­port pointed to the top strengths and weak­nesses, the data cap­tured for the anal­y­sis was based on par­tial hard data and the rest was from per­cep­tion re­sponses.

In short, on­go­ing pro­grammes by the var­i­ous gov­ern­ment agen­cies and pub­lic-pri­vate part­ner­ships which have un­locked dig­i­tal op­por­tu­ni­ties are prob­a­bly not tracked in time for the re­port.

The Na­tional Trans­for­ma­tion 2050 roadmap will help Malaysians face ad­vance­ments in tech­nol­ogy, es­pe­cially in the use of cy­ber-phys­i­cal sys­tems. For Malaysia, its dig­i­tal pro­file has been built from decades of plan­ning and the lat­est dig­i­tal com­pet­i­tive­ness rank­ing showed it stood the test well, based on the know-how, tech­nol­ogy and the coun­try's pre­pared­ness to ex­ploit dig­i­tal trans­for­ma­tion.

At the start of this decade, Malaysia made known to the world that it will build an ecosys­tem that pro­motes in­for­ma­tion and com­mu­ni­ca­tions tech­nol­ogy (ICT) in all as­pects of the econ­omy to cre­ate com­mu­ni­ties con­nected glob­ally and in­ter­act­ing in real time.

IoT is al­ready adopted in pub­lic health­care just as 3D print­ing is now pop­u­larly used in the phar­ma­ceu­ti­cal in­dus­try.

Just as es­poused by the 11th Malaysia Plan, the blue­print that will push Malaysia to­wards re­al­is­ing Vi­sion 2020, sev­eral in­no­va­tive ap­proaches will be the en­ablers to achieve the ICT goals. Past achieve­ments, which have en­sured 83 per cent of ser­vices avail­able on­line in the pub­lic sec­tor, are now be­ing com­ple­mented by the gov­ern­ment's “In­clu­sive Dig­i­tal Gov­ern­ment Spear­head­ing ci­ti­zen cen­tric ser­vice de­liv­ery”.

Ci­ti­zen-cen­tric, data-cen­tric, re­li­a­bil­ity and as­sur­ance, ICT com­pli­ance, green tech­nol­ogy, dig­i­tal in­no­va­tion and open source soft­ware, are the ba­sic prin­ci­ples which will guide the im­ple­men­ta­tion. Chal­lenges re­main as so­phis­ti­cated needs in­crease due to the high ex­pec­ta­tions from the younger gen­er­a­tion as well as change in tech­nol­ogy, culture and de­mog­ra­phy.

Malaysia Dig­i­tal Econ­omy Cor­po­ra­tion (for­merly Mul­ti­me­dia De­vel­op­ment Cor­po­ra­tion) recog­nises the dig­i­tal econ­omy as the third wave of IT trans­for­ma­tion with even more in­no­va­tion, pro­duc­tiv­ity gains and eco­nomic growth than be­fore.

By 2020, the size of the dig­i­tal econ­omy is es­ti­mated to be at US$90 tril­lion and Malaysia and our en­ter­prises — both large, and small and medium-sized — have the op­por­tu­nity to leapfrog ahead over other coun­tries. But, they would need to change their busi­ness mod­els and proac­tively evolve to stay rel­e­vant as In­dus­try 4.0 is all about changing tra­di­tional value chains.

To com­pete suc­cess­fully, com­pa­nies not only need to align them­selves to­wards the same direction by adopt­ing au­toma­tion, ro­bot­ics and other smart tech­nolo­gies, but also close the skills gap by re­tain­ing their work­force and tap­ping the pool of dig­i­tal tal­ent.

The In­ter­na­tional Trade and In­dus­try Min­istry is spear­head­ing the for­mu­la­tion of a na­tional pol­icy on In­dus­try 4.0.

Some ma­jor chal­lenges have been iden­ti­fied. For in­stance, cur­rently there is no clear over­ar­ch­ing pol­icy or co­or­di­na­tion in terms of In­dus­try 4.0 ini­tia­tives. There are also in­fra­struc­ture and ecosys­tem gaps that ad­versely af­fect adop­tion of In­dus­try 4.0 ini­tia­tives. Sub­stan­tial cap­i­tal ex­pen­di­ture may be needed as ini­tial in­vest­ments in In­dus­try 4.0 while the ex­ist­ing in­cen­tives and fund­ing are broad-based. In terms of hu­man cap­i­tal and tal­ent, mis­match in skill sets re­mains a key chal­lenge.

A high-level task force has been es­tab­lished in the In­ter­na­tional Trade and In­dus­try Min­istry, with mem­bers from rel­e­vant min­istries and agen­cies, to co­or­di­nate the over­all for­mu­la­tion of a na­tional pol­icy for In­dus­try 4.0 in Malaysia.

Five Tech­ni­cal Work­ing Groups has been es­tab­lished un­der the Task Force led by re­lated lead min­istries based on five el­e­ments, namely in­fra­struc­ture and ecosys­tem (Com­mu­ni­ca­tions and Mul­ti­me­dia Min­istry), fund­ing and in­cen­tive (Fi­nance Min­istry), tal­ent and hu­man cap­i­tal de­vel­op­ment (Higher Ed­u­ca­tion and Hu­man Re­sources Min­istries), tech­nol­ogy and stan­dards (Sci­ence, Tech­nol­ogy and In­no­va­tion Min­istry), and SME de­vel­op­ment (SME Corp). The na­tional pol­icy is tar­geted to be com­pleted by end of this year.

Sev­eral out­reach and aware­ness pro­grammes on In­dus­try 4.0 have been un­der­taken by the In­ter­na­tional Trade and In­dus­try Min­istry at the na­tional level, in­clud­ing ded­i­cated ones for in­dus­try, gov­ern­ment of­fi­cials and SMEs in May and July 2017. Re­gional-level sem­i­nars will also be con­ducted in the near fu­ture.

The Malaysian In­vest­ment De­vel­op­ment Author­ity is also un­der­tak­ing a study on “Fu­ture of Man­u­fac­tur­ing In­dus­try 3+2”, which will be in in­put into na­tional pol­icy. The study is ex­pected to be com­pleted in third quar­ter of this year.

The re­cently rolled-out Malaysia Pro­duc­tiv­ity Blue­print has also called for the strength­en­ing the readi­ness of en­ter­prises to adopt and ex­ploit tech­nol­ogy and dig­i­tal ad­van­tage (like IR 4.0) as one its strate­gic thrusts. The Dig­i­tal Free Trade Zone, once com­pleted, will po­si­tion Malaysia among the lead­ing coun­tries in the global ecom­merce mar­ket.

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