Create more global brands
A TOP European industrialist once told us that for Malaysia to be an industrial nation, the country must be able to design, engineer and make our own products for the world market.
Alternatively, we can also buy out a foreign company with a successful product in the global market and bring it back here before marketing it as a Malaysian success story.
The key issue is in the creation of our own successful product for the global market. Once a Malaysian company has a winning product, it can be manufactured here or in any country that would bring down the cost of production or that has a large market for the product.
For most foreign companies, investing and setting up a plant here is just a move to utilise our cheap labour and also to sell their product since Malaysia has one of the strongest purchasing powers in Southeast Asia.
However, now that our labour cost is no longer as cheap and the market has reached a saturation point, many companies have moved their manufacturing plants to Indonesia and Vietnam as both countries have cheaper labour and their populations also have higher purchasing power now.
So the offer by foreign companies to transfer technology to us previously was just a ploy because all they actually want is to set up their manufacturing plant to produce their product at the cheapest cost possible.
And the original recipe to create the products will remain locked in their headquarters. Their thinking is to not transfer their knowledge and technology to anybody who can be their competitor in the future.
For example, Proton was established almost 40 years ago by rebadging Mitsubishi cars. Geely admitted recently that it would take five years for Proton just to do exterior body modifications on its own.
Similarly, Perodua, which rebadged Daihatsu and Toyota vehicles, still has very little involvement in creating its vehicles that is done in Japan.
Therefore, for Malaysia to become an industrial nation, we need more companies like Top Glove or Hartalega that create their own product and export it worldwide.
Malaysia needs to provide more funding to start-up companies or individuals that have created their own products that have large market potential. This was done by the China, Japan and South Korean governments that led to the emergence of many industrial giants in those countries.
In the United States, government funding is less needed as the US has many venture capitalists who can provide funding for start-ups with huge potential, like how Google, Facebook and many well-known companies today got their start.
Venture capital is almost non-existent here. Perhaps, the government can learn from China and South Korea by being the fund provider for companies or individuals to create and manufacture Malaysia’s own products for the world market.
We must realise that Malaysia does not have a large domestic market like China or even Indonesia. Therefore, it is in our interest and in our benefit in the long run for Malaysians to create new Industrial Revolution 4.0 products for the global market.
DR AMALINA AMIR
Head of Innovative Electromobility Research Lab, School of Mechanical Engineering, College of Engineering, Universiti Teknologi Mara (UiTM)