Aware­ness and adop­tion of In­dus­try 4.0

> May be partly due to lack of market size to in­cen­tivise man­u­fac­tur­ers to au­to­mate: Min­is­ter

The Sun (Malaysia) - - SUNBIZ - BY EE ANN NEE

PE­TAL­ING JAYA: The low aware­ness and adop­tion of In­dus­try 4.0 among Malaysian man­u­fac­tur­ers may be due to the lack of market size to in­cen­tivise them to au­to­mate, said Sec­ond Min­is­ter of In­ter­na­tional Trade and In­dus­try Datuk Seri Ong Ka Chuan (pix).

In­dus­try 4.0 refers to the trend of au­toma­tion and data ex­change in man­u­fac­tur­ing tech­nolo­gies. It is de­scribed as the fourth in­dus­trial rev­o­lu­tion, smart man­u­fac­tur­ing or dig­i­tal fac­to­ries.

Ong said the world is mov­ing to­wards In­dus­try 4.0, a process where the man­u­fac­tur­ing process is dig­i­talised and au­to­mated. As such, pro­duc­tion will be ac­cu­rate, elim­i­nat­ing hu­man er­rors and im­prov­ing con­sis­tency in the qual­ity of prod­ucts that can be pro­duced in large quan­ti­ties.

“To achieve In­dus­try 4.0, it’s not only tech­nol­ogy, you also need a market size big enough to in­cen­tivise you to go into that. Our achieve­ment in In­dus­try 4.0 is low, but I re­alised there is an im­por­tant chal­lenge that we need to look into, which is the market size. Malaysia is a small market, so we can’t say ev­ery­body should go for In­dus­try 4.0, as you don’t have the market big enough to sus­tain, so we have to help them (man­u­fac­tur­ers) to go into a big­ger market,” he told a press con­fer­ence at the Fed­er­a­tion of Malaysian Man­u­fac­tur­ers (FMM) In­dus­try 4.0 Con­fer­ence yes­ter­day.

Ac­cord­ing to the FMMMalaysian In­sti­tute of Eco­nomic Re­search Busi­ness Con­di­tions Sur­vey in 2H2016, only 12% of the re­spon­dents are very aware of In­dus­try 4.0. About 41% are some­what aware, 28% need more in­for­ma­tion and 19% are not aware at all.

Ong opined that some­times man­u­fac­tur­ers are not ig­no­rant, but the market size or pro­duc­tion is not enough for them to em­bark on au­toma­tion.

“If they have the market size and get more market pen­e­tra­tion, from there, they will adopt (In­dus­try 4.0) them­selves and change their strat­egy in man­u­fac­tur­ing. They’re not to­tally pas­sive and the gov­ern­ment is not giv­ing a blan­ket in­cen­tive to help ev­ery­body. We only help those who are ready to adopt and we give them some in­cen­tives. For those who’re not, we’re not forc­ing them be­cause they may not have the market size to in­cen­tivise them to go for that. Look­ing at the re­al­ity, there are some rea­sons be­hind that. They need to ex­plore new mar­kets,” said Ong.

He said the gov­ern­ment is com­mit­ted to as­sist­ing SMEs make the leap into In­dus­try 4.0, since they face a dif­fer­ent set of chal­lenges com­pared with the multi­na­tional cor­po­ra­tions. This in­cludes strength­en­ing dig­i­tal­i­sa­tion among SMEs through e-com­merce and adop­tion of in­no­va­tive tech­nol­ogy.

Ong said the gov­ern­ment needs to as­sist man­u­fac­tur­ers and pro­vide in­cen­tives in the be­gin­ning for them as au­toma­tion re­quires in­vest­ments. It has pro­posed such in­cen­tives for Bud­get 2018.

“This is an agenda that we need to give pri­or­ity to be­cause it af­fects the pro­duc­tion and competitiveness in the in­ter­na­tional market, so we need to dig­i­talise our man­u­fac­tur­ing process,” said Ong.

Other ini­tia­tives al­ready em­barked on lead­ing up to the over­all In­dus­try 4.0 con­cept in­cludes the National Strate­gic Roadmap on In­ter­net of Things, the Dig­i­tal Free Trade Zone and fram­ing 2017 as the year of the In­ter­net Econ­omy for Malaysia.

The National Pol­icy on In­dus­try 4.0 is also be­ing de­vel­oped and the pol­icy frame­work is tar­geted to be com­pleted by year end. Ong said the role of the gov­ern­ment is more of an en­abler for In­dus­try 4.0 trans­for­ma­tion to be re­alised.

He added that in­dus­try as­so­ci­a­tions echo the sen­ti­ments of the gov­ern­ment that dig­i­tal­i­sa­tion through In­dus­try 4.0 should be bot­tom-up in­stead of top-down and in­dus­try as­so­ci­a­tions need to take charge and ad­vo­cate rapid adop­tion in the man­u­fac­tur­ing and man­u­fac­tur­ing-re­lated ser­vices.

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