Focused strategies to drive growth of E&E sector

IN my previous article, I wrote about the Malaysia Productivity Blueprint (MPB) and the electrical and electronics (E&E) industry being one of the nine priority sub-sectors which offered our nation high potential growth opportunities.

The Electrical & Electronics Productivity Nexus (EEPN) was formed to identify key strategies to drive growth and expansion of this sector.

Based on the EEPN’s sub-sector value chain assessment, we identified the need to strengthen design and product development in this sector, and accordingly developed four key strategies anchored on the need to focus on Industry 4.0 and the development of Small and Medium Enterprises (SMEs).

We need to build on our strengths for manufacturing to move up the value chain. Of particular importance is the need to focus on state-of-the-art manufacturing and technologies, especially those which capitalise on the megatrends shaping the future growth of the E&E sector.

We have identified four strategies as key.They are to enhance higher valued-added activities, nurture the local talent pool, accelerate the adoption of Industry 4.0 and strengthen the development of local SMEs.

> Enhance higher value-added activities

To augment our capabilities for higher value-added, it is imperative for us to focus on the development of Integrated Circuit (IC) and embedded systems design, to provide a much needed thrust for the growth of Design and Development (D&D) in Malaysia.

Our local SMEs already show capabilities in this area but are small and need the impetus and assistance to grow to become globally competitive entities.

One of the ways is to help them improve the utilisation of shared laboratories, design tools and capabilities within the country.

As SMEs do not enjoy the economies of scale that larger MNCs enjoy and can thus leverage on to provide competitive costs, we are seeking to change the rates that local laboratories funded by the government charge SMEs for services.

For that, we are exploring how to get the rates reduced or even zero-rated so that SMEs, which utilise government funded laboratories’ services and design tools are able to leverage on reduced costs to be more competitive.

We need to provide attractive incentives for SMEs, LLCs and MNCs to set up design and development (D&D) centres. When MNCs set up large D&D centres here, our local talents benefit from the exposure to state-of-the-art technology, which sees them at the forefront of cutting edge technologies of the present and the future.

MNCs also invest substantially in training our local talents, which provides them with a strong base of knowledge.

This strengthens the capabilities of our local engineers. Our hope is that in the future, these same engineers are hungry enough to branch off on their own and create their own D&D start-ups.

> Nurture the talent pool

We also need to have the talent base to support the growth in state-of-the-art manufacturing, D&D and increasing the capacities and competencies of local companies. We have a number of upskilling programmes in place to nurture our local talent pool, to increase local engineers’ technical competency and provide them exposure to research-based and innovative projects.

One of the industry upskilling programmes we have is the E&E Engineering Inbase Programme which is supported by Human Resource Development Fund (HRDF). Through this programme, we train yet-to-be-employed engineering graduates with the relevant technical and soft skills.

This programme offers additional benefit of increasing the employability of young graduates. We are encouraging in-house technician development and aiding in workforce enhancement, whereby manufacturing operators are upskilled to become manufacturing specialists. At the same time, manufacturing specialists are transformed into technicians, while current technicians are provided additional training to handle new processes and equipment.

> Accelerate the adoption of Industry 4.0

Commonly known as the fourth industrial revolution, Industry 4.0 is changing the way we work and live in this day and age. Signifying the current trend of automation and data exchange in manufacturing technologies, Industry 4.0 is all about doing things differently.

Globally, businesses are leveraging on Industry 4.0 technologies to increase productivity and achieve further growth without compromising on quality, cost or speed. It almost goes without saying that we need to accelerate the adoption of Industry 4.0 within the Malaysian E&E sector to remain relevant and globally competitive.

We are creating awareness of its benefits by promoting and organising events related to Industry 4.0 such as conferences, seminars and workshops.

SMEs can join in the Industry 4.0 journey without expending excessive financial costs.

They just need to identify areas of opportunity to upgrade their productivity by taking small steps to success, instead of one giant leap, within a cost outlay which they can afford.

> Strengthen SME development

The ecosystem needs to be strengthened especially with regards to ensuring SMEs have the capacity to support LLCs and MNCs. Of vital importance is the need for SMEs to remain abreast of current and future manufacturing technologies and state-of-the-art manufacturing processes. The strategy we have developed within this pillar is to encourage LLCs and MNCs to outsource work to SMEs.

We would also establish an E&E SME directory that details the competencies and capabilities of our local SMEs so that they can be promoted both locally and internationally. Government agencies promoting Malaysia as a business destination and investment centre can add this to their repertoire of promotion efforts and showcase their competency capabilities, and the directory acts as a business matchmaking tool.

Another way to support a robust ecosystem is to establish the Manufacturing Innovation Centre (MIC) which can assist new companies and young SMEs to develop and grow through focused advice from specialists, and help in commercialising their products.

Moving ahead, we have a very clear idea of the goals we would like to achieve based on our four key strategies. Our vision is to inspire and encourage our local E&E sector to be recognised as a regional hub with global recognition for D&D, high value engineering solutions and products, test and engineering services and automation.

By doing so, we believe Malaysia will become a leading innovator in the regional E&E sector, armed with strong manufacturing capabilities to develop products and services for the world and providing solutions to the industry at large.

Datuk Seri Wong Siew Hai is the chairman of the EEPN. He is also the chairman of the Malaysian American Electronics Industry and honorary governor of American Malaysian Chamber of Commerce. This is the final part of a two-part series on the E&E industry and its strategic growth plans.

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