March 5, 2021

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Malaysia Looking to be Asia’s Leading Hub

Malaysia aims to be the hub for Industry 4.0 in South- East Asia to regain its status as an Asian Tiger. The country’s Prime Minister stated that rapid adoption of Industrial Revolution 4.0 in Malaysia is the way forward in view of the accelerated speed in which new technologies evolved.

With the launch of its National Policy on Industry 4.0 (Industry4WRD) last year, Malaysia aims to drive the country towards becoming the Industry 4.0 hub in SEA.

The Industry4WRD policy aims at increasing productivity in the manufacturing sector per person in Malaysia by 30% from RM106,647. This would elevate the absolute contribution of the manufacturing sector to our economy by 54% from RM254 billion to RM392 billion.

The PM stated that while new technologies could be disruptive, it also boasts exciting prospects and challenges.

Following the consolidation of Opera-tion Technology and Information Technology, data analytics, process understanding, and the ability to work with disruptive technologies, Industry 4.0 would transform the labour market into a skill-centric force.

Technologies such as the Internet of Things, Advanced Robotics, Artificial Intelligence and Additive Manufacturing are contributing factors to generate an increase in net productivity.

However, these transformations will not take effect unless Malaysia takes the first step and its strategy has to be right. The country needs to take the Industry 4.0 transformation seriously in order to remain competitive and relevant in the international equation.

Malaysia is poised to succeed, as it boasts 40 years of experience in the manufacturing sector, apart from having created a good business ecosystem.

The country could capitalise on its existing supply chain, access to the global market, and its pool of talented multi-racial and multicultural community. For Malaysian businesses to remain competitive, they need to change their business strategy.

The PM called on Malaysian businesses to seriously look into investing much more in Research and Development (R&D) to upgrade products and services, apart from improving business processes and embracing integrated technologies.

He also called on universities to focus on developing their R&D capabilities in solving real industry problems., noting that there must be a push towards innovative thinking and multi-disciplinary knowledge, as Malaysia aimed to increase its high-skilled workforce from 18% to 35% by the year 2020.

Projected Growth for Start-up and Tech Sectors

According to another article, the Secretary of the Small and Medium Enterprises Association (Samenta) Malaysia stated that the allocation of up to RM1 billion to encourage more global unicorns or Fortune 500 companies to invest in Malaysia would create economic spill-over effects for SMEs supplying goods and services to them.

He also welcomed the move to allocate RM550 million as smart automation matching grants to 1,000 manufacturing and 1,000 services companies to automate their business processes, and the 50% matching grants of up to RM5,000 per small-and-medium enterprise (SME) for the digitisation of their operations such as electronic point of sale systems.

The SME manufacturing sector will benefit from the move to extend till 2023 on the assessment for the accelerated capital and automation equipment capital allowances incurred on capital expenditure.

This will free up their cash flow for design and development activities.

A committee member of the Free Industrial Zone, Penang, Companies’ Association (Frepenca) stated that the Federal Government has finally heeded messages from players in the electronics industry. The RM550 million allocation as smart automation matching grants will spur the adoption of Industry 4.0 in the country.

Budget 2020 provisions for the high technology sector will boost the performance of the electronics industry in the country. They come a timely moment as Malaysia’s companies’ competitors in the region have been courting aggressively after foreign direct investments.

Industry 4.0 Benefit in Manufacturing Technologies

Under Industry 4.0, manufacturing technologies will gradually integrate automation and processes such as cyber-physical systems, the internet of things and cloud computing.

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