Making Malaysia an innovation hub

  • Economy
  • Thursday, 01 Nov 2018

KUALA LUMPUR: Tun Dr Mahathir Mohamad has unveiled fresh plans for Malaysia to become one of the main destinations for the high-tech industry by 2025.

The Prime Minister unveiled a four-pronged strategy for Malaysia to be on a stronger footing in the manufacturing sector through higher productivity, contribution, innovation and increasing the number of high-skilled workers at the launch of the National Policy on Industry 4.0 (Industry4WRD).

The manufacturing sector has contributed 23% to the gross domestic product and 98.5% of Malaysian small and medium-sized enterprises (SMEs) are in this sector.

In relation to innovation, the prime minister envisioned the country to be ranked among the top 30 nations in the Global Innovation Index by 2025. Currently, Malaysia is ranked 35th in the index.

“The potential for growth is limitless, but it all boils down to knowledge on application,” he said in his speech at the launch.

For Malaysia to become a developed nation, Dr Mahathir said the fourth industrial revolution (IR4.0) was a crucial step to leap forward for the manufacturing industry, noting that exhibitions and conferences would encourage companies to change.

“Bring the technology to exhibitions and show the companies how they can increase production and lower the cost. When you know the exact formula, the companies will save money to buy the new technology,” he told a press conference.

Asked if incentives would be granted to SMEs to speed up digital adoption, Dr Mahathir emphasised that higher profits earned from adopting technology should be sufficient motivation for companies to undertake investments.

He said the “mentality of seeking incentives is wrong”, indicating that the previous administration got Malaysians dependent on grants and incentives.

“Nowadays, even if people want to eat, they want incentives, to breathe they also want incentives. This is the wrong mentality.“If Malaysians become dependent like that, very soon, they can’t think, move or they can’t do anything for themselves, as they will be always looking for subsidies,” he quipped.

Despite the higher initial cost of technology, Federation of Malaysian Manufacturers (FMM) president Datuk Soh Thian Lai suggested that SME manufacturers could benefit through soft loans with low interest rates by banks.

“This will enhance the willingness of the SMEs to break and embrace Industry 4.0 because other Asean countries are embarking on it aggressively. Malaysian SMEs have no choice but to adopt the fourth industrial revolution.

“Our members will work together with relevant authorities and organisations that have these technologies. We will move forward with the help of the International Trade and Industry Ministry and other government agencies,” he said.

FMM represents more than 10,000 member companies from the manufacturing supply chain.

Globally, International Trade and Industry Minister Datuk Darell Leiking said IR4.0 had the potential to raise income levels and improve the quality of life.

“This is exemplified, for instance, by autonomous robots that have enhanced agility, sensors and intelligence, as well as autonomous vehicles or self-driving cars capable of sensing the environment to perform tasks,” he added.

Going forward, Dr Mahathir urged manufacturing SMEs to be at the forefront of their competitors as the country has lagged behind in digitisation.

On the four Bank Negara officials suspended, Dr Mahathir said “someone in Bank Negara obviously knows” what happened to the RM2bil paid by the central bank to purchase land from the Finance Ministry.

“I only know that the land was sold to Bank Negara for RM2bil.”

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