Forecasting Malaysia's Climate For Change

The future is bright and vivid, if only we have the right mindset – a digital-first mindset and embrace relevant emerging technologies.

Radical changes are already upon us, and we have little choice on the matter. When it comes to embracing change, history speaks for itself; those who have risen to the occasion survive, and those who don’t, fail. Muhundhan has much to ponder on; he plays a part to ensure both local and foreign organisations are incentivised to adopt emerging technology while future-proofing those who look to him.

“The emerging technologies of the Fourth IR are touted to be groundbreaking, but at the same time, disruptive. It will change the way we live, work and do business. The ultimate challenge, is how one changes his or her mindset in embracing these changes. “Issues of survivability and relevance are a constant plague on the business community, and only those with foresight are able to not just pull through, but thrive.

More than half of Standard & Poor (S&P) companies are no longer around due to digital disruption and the trend is growing. But companies with digital-first mindset and innovation will find ways to embrace and grow,” he said.

When it comes to businesses, competitors no longer stem from the same industry, resulting in exponentially greater competition in the market. These companies have morphed into software companies, contending with those with digital at their core. While the pressure is felt by companies to reinvent the wheel, there is no one size fits all approach.

In order for technology to create value for the business, he stressed that the end goal must first be defined, before the options are laid on the table. He also warned that using new technology for the sake of digitalising the business could be detrimental, if the end goal is not clearly defined.

He adds: “Digital transformation need not be an expensive affair. By being open to new possibilities and starting small, companies can initiate pilot projects with measurable outcomes, before adopting a more iterative model.”

MDEC’s initiative, the Digital Transformation Acceleration Programme (DTAP) is a catalyst for transformation – a partnership with global experts who are able to identify business pain points and opportunities in the transformative journey – and offered to local companies to help them pilot an implementation via a structured approach. Pilot projects are outcome based, therefore creating tangible return of investments. They will further allow employees to be acquainted with new approaches, analyse the outcomes and enhance scalability.
The question, as Muhundhan pointed out, is no longer about if we should, but how quickly can we scale.

THREAT OR TREAT?

For decades, low-skilled labour has been the competitive advantage for ASEAN businesses, and Malaysia is no exception. However, the shift towards automation enables significant cost savings by lowering production cost and labour workforce.
“What was once our selling proposition is now redundant, and this calls for digital-first business models. In order to remain competitive, leveraging on the Fourth IR is the way forward as data collection and smart analytics will mean effective decision-making, smarter machines and continuous optimisation of processes,” Muhundhan said.

Disruptive technologies like artificial intelligence (AI) are transforming global production systems. Factory processes and the management of global supply chains will see a 180° turn, and this is creating a new wave of competition among countries. According of the World Economic Forum, if technology is adopted correctly, this can unlock a 30-40% increase in productivity.

However, while it is clearly advantageous for businesses, the societal implications of the Fourth IR is a catch-22 situation. The World Health Organisation (WHO) estimates that two-thirds of the world population will be living in urban areas – an additional 2.5 billion people! A more densely populated area, would also mean higher competition. “For the first time, countries and companies have to worry about how their manpower will keep up with the pace of change. Previous revolutions were seen as job and growth creators, but the Fourth IR is a ‘concern’ as it may eradicate jobs and lead to unemployment,” he warned.

Cities that will flourish are those that rely on cutting-edge technologies, and have citizens who are proactive in their approach to upskill. On the whole, ASEAN nations are prime for the next wave of acceleration with the fastest growing internet market in the world. It is projected to enjoy a 1,600% increase in the e-commerce market in 2025 with 3.8mil users coming online every month.

The INDUSTRY4WRD policy sets the ball rolling to develop our nation’s manufacturing industry and lay down the groundwork for more high-value jobs in the future.

NATIONAL INDUSTRY 4.0 POLICY, INDUSTRY4WRD

In order to establish the readiness of its citizens, the Malaysian government, with the launch of the Industry 4.0 National Policy, INDUSTRY4WRD, will spur the cultivation of a vibrant, open and knowledge-based economy. “It’s a much-awaited policy guideline to build a sustainable digital transformation ecosystem. The policy focuses on supporting the manufacturing industry and related services, while charting course to make Malaysia a destination for high-tech industry. This will draw more investments into the country, thus building a robust manufacturing industry that provides high-value jobs as
well.

“INDUSTRY4WRD helps to align all necessary elements together such as digital talent upskilling, business readiness, emerging technology adoption, financial support and more, to reduce the barriers of entry for local companies. This in turn will transform our manufacturing industry to be smart, systemic, and resilient. In a way, this policy can be applicable to other industries as well with different strategies and priorities put in place,” he said.

This heralds the onset of more digital-related policies to support and install great governance. Industries such as healthcare, oil and gas, logistics and agriculture, are being disrupted and the policies of the future need to be agile enough to face rapid changes in the technology space. The extent to which the benefits are maximised and the risks mitigated, depends on the quality of governance protocols such as policies, norms, standards and incentives that shape the development and deployment of technologies.

Muhundhan Kamarapullai, Deputy Director of Digital Adoption Ecosystem, Malaysia Digital Economy Corporation (MDEC).