Understanding & Accelerating the Fourth Industrial Revolution – A Summary of the Plenary Session

Panellists:

• YB Dr Ong Kian Ming, Deputy Minister of International Trade and Industry, Malaysia

• Dato’ Ng Wan Peng, Chief Operating Officer, Malaysia Digital Economy Corporation (MDEC)

• Dato’ Seri Ivan Teh, Founder & Managing Director, Fusionex International

• Mr Marc Woo, Country Head, Google Malaysia

• Moderator: Mr Chow Sang Hoe, Advisory Managing Partner, ASEAN & Malaysia,Ernst & Young Advisory Services

SUMMARY

The 4th Industrial Revolution is sweeping across the world, and Malaysia has to embrace this revolution and push towards significant digital transformation to avoid being left behind countries such as China, Thailand, and Vietnam, to name just a few of our neighbours.

Our challenges primarily lie in the field of talent development and mindset change.

To capitalise on the opportunities, Malaysia needs to work on increasing accessibility to the Internet and fostering more collaborations, domestically and regionally with other ASEAN countries. From the inside out, we should work to develop our talent, so that they are able to pave the way for this transformation, while identifying and nurturing specific economic sectors especially within the SME community. SMEs are key in pushing this digital technology further, and as such, they have the full support of the government in their drive towards digitisation and automation.

In conclusion, we cannot stop the changes that are taking place, and neither can we avoid them. We need to develop our talents, collaborate with each other within the eco-system of government, SMEs, financial institutions, agencies, and the corporate sector, and harness the power of ASEAN.

Summarised Points by Panellist

YB Dr Ong Kian Ming

1. All of us need to realise that IR4.0 (Fourth Industrial Revolution) is sweeping across the entire globe, and it affects all ministries, not just MITI.

2. MITI is spearheading the Industry4.0 component of IR4.0 to lead the way for other ministries.

3. A very important component of the programme is Readiness Assessment, a sophisticated assessment tool that is offered for free to 500 SMEs. Highly-trained MITI assessors will visit these SMEs and evaluate the different components of IR4.0, before coming out with a matrix and framework to inform them of the critical areas. So far, only 300 SMEs have signed up for this readiness valuation.

4. There is also the Business Intervention programme, whereby the government provides 70/30 matching grants up to RM500,000 (70% comes from the government and 30% comes from the company) to fund IR4.0 initiatives.

5. In terms of education, MITI’s short term concern is addressing the skills gap. For the longer-term, we also need to change our mindset; 60% of the jobs that are going to be present in the future do not exist today. Similarly, ten or twenty years ago, there was no need for “Social Media Managers” or “YouTubers”. We should not worry too much about the younger generation and IR4.0 as young people are much more attuned to digitalisation trends compared to before. Senior management and BODs do need to have a timeline and prioritisation schedule.

“All of us need to realise that IR4.0 (Fourth Industrial Revolution) is sweeping across the entire globe, and it affects all ministries, not just MITI” – Dr Ong Kian Ming

Dato’ Ng Wan Peng

1. The numbers I have here are slightly different from Marc’s, but it doesn’t matter. The message here is that the digital economy is key that no country can afford to ignore it. In Malaysia, the digital economy contributed 18.3% to Malaysia’s GDP.

2. This is why organisations like Google, Facebook, AliBaba are doing what they are doing. They know how to use the technology to take advantage of a hyper-connected world to address the demands of the consumer.

3. However, the business sector in Malaysia has been slow to adopt IR4.0, compared to businesses in other ASEAN countries and China.

4. The top two priorities for Malaysia are:

• Talent. In Malaysia, just like any other country, if you need to take advantage of the 4th IR, we need to have our people trained at user and developer levels

• Adoption rate. Sectors that are key to successful adoption of IR 4.0 are the manufacturing sector (within manufacturing, retail and wholesale) as well as agriculture, and logistics.

5. Based on WEF’s projections, 16 million jobs will disappear but 18 million new jobs will be created. New job creation will exceed job loss. However, people who are not prepared will have problems.

6. In terms of jobs, we started working with the Ministry of Education 4 years ago on a programme that emphasizes critical thinking, creativity, problem-solving, and innovating. It is not about training about technology as technology changes from time to time

7. The nature of jobs is also changing. Now it’s about freelancing. But we must accept that machines and artificial intelligence (AI) are going to be a big part of what we are going to face in the future.

I am hopeful that Malaysia, we can be ready, but more needs to be done. We need to increase understanding and communicate more so that more success stories can be shared and we can learn from them.

“We must accept that machines and artificial intelligence (AI) are going to be a big part of what we are going to face in the future.” – Dato’ Ng Wan Peng

Dato’ Seri Ivan Teh

1. I have been to about 37 countries in about 15 months. That is probably 2.5 countries every month. This just goes to show how interconnected the world is today.

2. The last few industrial revolutions have resulted in a shift from steam, energy, coal to mechanisation, assembly lines all the way to computerization and they were massive shifts, in terms of economic wealth, and business models and job opportunities.

3. But IR4.0, will be the biggest of them all, cutting across all industries.

4. As such, we as industry leaders and as business owners have to take action, and we fortunately have a strong and supportive government

5. In Malaysia, 97% of the businesses are SMEs, and two-thirds of job opportunities are created by SMEs. So it worries me that when they are asked questions about IR4.0, their answer is mostly “I don’t know” or “It does not matter”.

6. This is alarming. We are seeing a disruption and the blurring of lines between the physical and digital world, and they are converging together to create a perfect storm.

7. in Malaysia, retailers and manufacturers are shutting down, because they are losing out in terms of their competitive edge. Manufacturing is no longer only about cost but it is increasingly about delivering value to customers.

8. Even in China, the second-tier manufacturers are not looking to hire cheaper labour; China’s cost is not decreasing, it is escalating. They are using IR4.0 to automate tasks to get more done faster.

9. The most unprofitable thing to manufacture is excuses.

10. For companies to be successful at adapting to IR4.0, the leadership needs to be involved. Goals need to be clearly defined by senior management.

11. We have an abundance of talent in this country and a very supportive government. We need to collaborate. We need to have a collaborative mindset to work with each other, with the public sector and agencies, so that we can narrow the gap between academia and industry. Also, it’s time to view your peers not as competitors but as collaborators. If you can find a way to collaborate, collaborate. That is how the modern world works.

12. Malaysia has a great chance to be successful, because Malaysia has a lot of strengths, but we have to start now. Don’t confuse movement with progress. Start small, think big and steer fast.

13. In terms of jobs, parents and educators need to change their mindsets. We should not be looking for our children to have the most stable and secure jobs. We should not be thinking of the 3-D jobs for our kids: Dirty, Dull and Dangerous. These jobs will go to robots and machines over the next twenty years. Digital marketing, online marketing, YouTube, internet marketing – these are examples of next generation jobs. The mindset shift is really very important.

14. The past is waste paper, only for reference. The present is the newspaper (current events) while the future is the big question paper.

“The most unprofitable thing to manufacture is excuses.” – Dato’ Seri Ivan Teh

Mr Marc Woo

1. We conducted three studies in the past 4 years and these studies are in South East Asia, Malaysia included. We estimated the size of internet and economy to be:

· Value of the internet economy was $8bil, or slightly over RM30bil.

· Six years from now, it’s forecasted that the internet economy in Malaysia will be worth over US$20 billion. This is going to be a sizeable 7%-8% of total GDP.

· At this point in time, China’s digital economy is 16% of GDP while the US’ is about 35%

2. The 3 big areas that are of concern are:

· Accessibility (to the internet), and speed of access

· Empowering the SMEs.

· And leveraging on ASEAN, which has a market size of 600mil people

3. Last year, China produced 1 unicorn every 4 days (a unicorn is a start-up worth over US$1 billion)

4. By harnessing the power of ASEAN, Malaysia could produce multiple unicorns a year. Positioning Malaysia at the center of ASEAN enlarges our pool and potential. Knowledge is power. Inject hunger, power and passion. Sometimes, sticking to a plan may not be the best method. In this age where technology and tools keep evolving, the ability to test, iterate, fail, and move on, is very important.

5. (On jobs) A couple of months ago, we had a STEM learning session with twenty girls under 14 years old. When we asked them what their aspirations were, three quarters said they wanted to make money from being a You-Tuber. This sort of response would have been unheard of even five years ago. Two years ago, we had one channel on YouTube Malaysia with over a million subscribers. Today, there are 18 channels in Malaysia with over a million subscribers, and many more with 6-digit subscriptions. There are examples of people quitting their jobs and serving entertaining, inspirational, motivational and educational content to earn a living. The advent of free technology platforms creates new jobs. With resilience and creativity, job loss will not be an issue.

“The ability to test, iterate, fail, and move on, is very important.” – Mr Marc Woo