KUALA LUMPUR (Oct 12): Malaysia's population is too small a market for all businesses to adopt the high technology of Industry 4.0, said the Ministry of International Trade and Industry (MITI).

Second Minister of MITI Datuk Seri Ong Ka Chuan was speaking to reporters here today on the sidelines of the Federation of Malaysian Manufacturers' (FMM) Industry 4.0 Conference.

His statement was in response to FMM and MIER's Business Conditions Survey in the second half of 2016, which revealed that only 12% of the respondents are very aware of the Industry 4.0 wave.

Ong said that while this figure is "disappointing", the challenge may lie in the fact that Malaysia has a mere 30 million population.

The relatively small market does not provide a good enough incentive for many manufacturing businesses, especially the small and medium enterprises (SMEs), to participate in the digital innovation, given the high cost of implementation, he said.

Malaysia's electrical and electronic industry, standing at a value of RM220.56 billion, remains the top most exported product as at August 2017.

Ong believes this strong demand suggests that the fourth wave of industry revolution is taking place in all parts of the world, which should serve as an "important signal" for Malaysia to stay competitive internationally.

He said Malaysia will be concluding the ASEAN-Hong Kong Free Trade Agreement next month at a summit that will be held in the Philippines, so as to allow Malaysian manufacturers access to ASEAN's combined population of over 620 million.

Ong also added that the government is currently still negotiating with the European Union on a free trade agreement to eliminate all trade barriers.

"We need to integrate into the bigger market, and we have signed 13 free trade agreements so far. This will help get more market access for Malaysian goods to increase our market size," he said.