Driving Malaysia towards Industry 4.0

The memorandum of understanding (MoU) aims to encourage, facilitate and promote economic cooperation in the areas of trade, investments and Small & Medium Enterprise (SME) development, particularly in Smart Manufacturing & Industry 4.0, Internet-of-Things and Circular Economy.

Dato’ Azman Mahmud, Chief Executive Officer of MIDA and Dr. Chang Pei Zen, Executive Vice President of ITRI witness the signing and exchange of the MoU between senior representatives of both organisations. This affirms the commitment of MIDA and ITRI to facilitate joint projects such as applied research activities, training programs, and attachment programs; exchange technical information and expertise in the research and development of industrial technology; assist technical upgrading of scientists and engineers; as well as to encourage more collaboration between industry and research institutes.

“Today’s MOU signing with ITRI Taiwan adds to MIDA’s on-going initiative to drive the country’s R&D activities and Industry 4.0 agenda. MIDA acts as a conduit by working with entities such as ITRI to bring together the industry and academia to create fresh and exciting collaborations. We are optimistic that this initiative with ITRI will increase of technology capabilities and capacities of our industries and lead to further investments in new and emerging technologies. It is more crucial now than ever for companies to reassess and realign their business strategies to adapt to the current challenges of doing business. Intensifying innovation through strategic collaborations in R&D activities is one of the key components that would enable businesses to remain competitive and sustainable,” said Dato’ Azman.

Malaysian industries stand to benefit from ITRI’s expertise and network with other research and technology institutes in Taiwan through collaborations in new technologies and applications such as artificial intelligence, big data analytics, machine learning, vision and sensing technology and others.

In the long run, this contributes to the country’s shift towards having more Industry 4.0, higher value-added & industry-driven research activities. It will also promote the development of a circular economy, whereby waste and leakages are reduced or phased out through careful product design and management as well as efficient business models. This will lead to a more sustainable and productive model for businesses and the economy.

Status of Industry 4.0 in Malaysia

With Malaysia’s strong manufacturing base and comprehensive ecosystems that have been built over the years, the country has many attractive value propositions to become the hub for high value added and Industry 4.0 activities in the region. In driving Industry 4.0 in Malaysia, MIDA aligns its efforts with the 11th Malaysia Plan (11MP) which places emphasis on developing the information and communications technology industry, whereby smart manufacturing is among the focus areas.

In addition to the 11MP’s targeted industries of three catalytic subsectors of Electrical & Electronics, Machinery & Equipment and Chemicals as well as the two growth subsectors of Aerospace and Medical Devices, other focus areas include resource-based, healthcare and life-science industries, regional/global establishments, logistics, the ecosystem surrounding e-commerce and green technology. The manufacturing and related services sector will benefit from the country’s shift towards Industry 4.0 through improving productivity, strengthening the innovation capacity and capability, and development of a higher skilled workforce.

The Government has introduced various initiatives to drive industry 4.0. These include drafting of National Industry 4.0 Policy Framework, which is expected to be announced in the first half of 2018; establishing a high-level task force chaired by Secretary-General of MITI to spearhead the Government’s policy and strategy on Industry 4.0; and an industrial study on “Future of Manufacturing: Industry 3+2” by MIDA, which is expected to underscore the way forward for these industries vis-à-vis Industry 4.0.

MIDA, as the principal investment promotion agency of the country has been aggressively promoting investments in R&D for many years. The agency continues to step up our efforts to drive stronger R&D linkages between the industry, universities and research institutions. As to date, MIDA has approved 182 R&D projects with total investments of RM2.87 billion. These comprise of 76 Contract R&D, 58 In-House R&D, 30 approved R&D companies and 18 R&D Status companies. These R&D projects have brought innovative technologies to the industries in Malaysia. Notable projects include the service on tele-radiology in tele-medicine for the healthcare sector, formulation of active pharmaceutical ingredient for generic pharmaceutical, and the development of integrated nano-layered stretch films for industrial packaging materials.

MIDA has also awarded five R&D Status university-linked companies, which is a tax efficient way to invest in R&D activity. The five universities are Management and Science University (MSU), University Tenaga Nasional (UNITEN), The University of Nottingham Malaysia Campus (UNMC), University Malaysia Perlis (UniMAP) and Monash University Malaysia.