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Public and private link key to Industry 4.0 success in Malaysia
- 03 December, 2018 13:20
Malaysia’s 2019 national budget had a significant focus on achieving the country's vision of becoming a fully connected digital economy.
IDC sees the realignment of Malaysia’s economy towards a smart connected one as an "important step" towards achieving the country’s ambitions to be a leading player in technology innovation and enablement.
A significant focus of the budget announced by Lim Guan Eng, the Finance Minister of Malaysia was on the country’s Industry 4.0 blueprint, titled ‘Industry4WRD’.
“The growth of digital economies is becoming an ever more impactful part of the global economy,” said Randy Roberts, research director of IoT and telco at IDC Asia Pacific.
"The transition to a digital economy is a key driver of growth and development because it can provide a boost to the country’s productivity across all sectors and it creates an attractive environment for new investments from outside Malaysia.
“As the fourth industrial revolution becomes a key driver of the digital economy, entrepreneurs and SMEs need to assess fundamental aspects of their business, including what products and services they sell, how they deliver them to the market, the new skill sets required and how they need to organise to support their operations.
"Now is the time to take advantage of the new policies of the government and partner to accelerate new digital businesses."
There are many examples of successful public-private partnerships across the region, from the likes of Singapore and Indonesia, where the government plays a central role in driving innovation and implementation.
Malaysia can and should do the same, according to IDC, especially in regards to developing a "robust Industry 4.0 strategy" by creating clear policies and priorities to support the private sector.
By following through with initiatives like Industry4WRD, it focuses the energy and creativity of the private sector around a common mission to create an era in which AI, robotics, 3D printing and IoT will take centre stage and lead to digital transformation in Malaysia.
What IDC believes is that with the direct support of public-private partnerships Malaysia is better equipped to focus its resources and boost the economic growth of the country.
Public-private partnerships have played a leading role in Indonesia and Singapore, for instance, in driving the digital economy including smart city and mobile commerce services where the combination of public policy and entrepreneurship has proved to be a winning combination.
In order to ensure the success of the digital initiatives in Malaysia, the government needs to consistently communicate the country’s digital priorities, according to IDC.
The private sector should then follow with investment and development of resources in those areas, including development of key skill sets in the workforce to retain local talent.
Furthermore, the Malaysian government is continuing to adopt the necessary policy changes and budget priorities to strengthen the economic foundation for digital transformation and technology investments.
For example, on November 7, 2018, Malaysian Technology Development Corporation (MTDC) invited small and medium enterprises (SMEs) to embrace the fourth industrial revolution with the launch of the Centre of 9 Pillars (Co9P) initiative.
This centre was designed to create a physical location for ecosystem partners to interact for the development and incubation of solutions based on nine technology pillars including; big data analytics, autonomous robots, simulation and augmented reality, horizontal and vertical integration, IoT, cyber security, cloud, additive manufacturing and supply chain.
The size of the big data/analytics investment in Malaysia is expected to reach $US670 million by 2019 led by the banking industry while spend on IoT will be US$2.2 billion with the largest investment going into manufacturing (2018 Big Data Spending Guide, 2018 IoT Spending Guide), according to IDC.
Malaysia’s digital economy is in the early stages of creating an infrastructure with key core technologies (cloud, big data/analytics, artificial intelligence [AI], mobility, social business, robotics, internet of things, and 3D printing) for better public services and an economic boost.
Rapid advances in cloud computing, connected devices, mobile, social media and data analytics are contributing to the growth of SMEs in Malaysia.
SMEs constitute 98.5 per cent of the total businesses and will spend US$2.7 billion on new technologies in 2019, according to IDC’s 2018 small and medium business spending guide.
Furthermore, IDC sees "great promise" in the new Malaysian government’s plan to launch the national fibre connectivity plan in 2019, which aims to develop broadband infrastructure to achieve a target of 30 Mbps speed per customer in rural and remote areas of the country within five years.
This plan follows the implementation of the mandatory standard access pricing announcement from the Malaysian communications and multimedia commission earlier this year that has successfully lowered broadband prices in order to connect more citizens to the digital economy.
“The high cost of a broadband connection in Malaysia has been one of the reasons small enterprises have delayed moving their business online,” said Roberts.
“Government policies that improve the affordability, access and speed of broadband connectivity will increase the adoption of digital services and show the readiness of the economy to support digital initiatives.”