FMM to Gov’t: Help us embrace IR4.0

THE Government should facilitate and provide incentives to local manufacturers to assist the latter to embrace Industrial Revolution 4.0 (IR4.0).

“Given the challenges faced by local manufacturers, the Government should provide the necessary help for us to adopt technological advancements,” Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai told FocusM.

Earlier, Soh said that nearly 64% of local manufacturers have yet to embrace full digitalisation to prepare themselves for the arrival of IR4.0.

Among the challenges faced were the lack of trained staff, budgetary issues and low broadband coverage.

On Oct 26, Parliamentary Select Committee for International Relations and Trade chairman Wong Chen said the COVID-19 pandemic ravaging the world would accelerate the pace of IR4.0 and Malaysia should be prepared for it.

“I think Malaysia’s IR4.0 ambition should be focused on implementing deliverables for manufacturing purposes.

“We do have some developments on big data and specialised manufacturing purposes but most of the inventions will be coming from abroad,” the PKR MP was reported saying.

On what the Government can do, Soh said the former should promote and support local companies to manufacture industrial robots through tax incentives, via tax-free income and offering pioneer status.

“The Government should also expedite development and offer online courses via institutions of higher learning,” he said.

On skills training, Soh said the Government should establish a place called the Next Generation Training Centre (NGTC), which will focus on Big Data Analytics (BDA)/Science and Solutions.

“And the establishment should promote manufacturing research collaboration between universities and industries,” he said.

Miti is leading the way

Elaborating on incentives, Soh said the Government should look into supporting research and development (R&D) by removing the RM50,000 threshold and the time limit imposed.

He added the Government should extend the automatic double tax deduction to all companies, including mid-tier and larger companies to spur technological innovation and creativity.

“The Government can consider allocating between RM100 mil and RM200 mil to set up a Future Manufacturing Fund to support R&D work and its implementation by universities and key engineering research centres, to support IR4.0 adoption and implementation by the manufacturing sector.

“Plus, the Government can introduce the R&D Voucher Scheme for small and medium enterprises (SMEs), offering financing up to RM50,000, depending on the company’s size.

“Of course, SMEs will have to match with investments of up to 20% of the voucher amount to make it financially manageable for the former to embark on innovative technological activities,” he said.

On connectivity, Soh said the Government should roll out high quality broadband access, yet affordable, to speed up investments in 5G infrastructure.

On what FMM has done so far to embrace IR4.0, Soh said the manufacturing group has developed the FMM Industry 4.0 Roadmap, using Industry4WRD initiatives, and is working closely with the Government to implement it.

He added under the stewardship of the International Trade and Industries Ministry (Miti), manufacturers in Malaysia are gradually realising the potential benefits of investing in IR 4.0 technologies.

“The joint campaigns between the Government and industry associations, such as FMM, have improved competitiveness of firms, which have adopted the relevant technologies.

“We have played a big part in convincing manufacturers into adopting IR 4.0. This outcome has dual impact on the business ecosystems in Malaysia,” said Soh.

On the dual impact, Soh said firstly, as more organisations adopt new technologies, competition is getting intense among companies for the latest technologies.

“Secondly, it also enables organisations to improve operational efficiency, service quality, cost competitiveness to pursue a more diversified growth strategy, improve market positioning and move up the global supply chain,” he said.

Soh added, “Based on the FMM-MIER Survey for the first half of 2020, 59% respondents said they will adopt automation, while 41% will go digital soon as a strategy for business recovery.”

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