This article first appeared in The Edge Financial Daily on November 1, 2018

KUALA LUMPUR: While the government has pledged to be an enabler for the necessary funding to drive the manufacturing sector into Industry 4.0, the idea of subsidies is unlikely to be part of it, said Prime Minister Tun Dr Mahathir Mohamad.

Dr Mahathir said “the mentality” of always looking out for subsidies and incentives is “wrong”.

“Now everybody wants incentives. Incentive to eat, incentive to breathe … It is a mentality that is wrong.

“Everybody wants subsidies. Why not just take the profit? We give the money. That is what the previous government did. They gave money to people; you don’t have to work [and still] get RM500,” said Dr Mahathir, referring to cash handouts such as Bantuan Rakyat 1Malaysia provided by the previous Barisan Nasional administration.

“If Malaysians become like that, very soon they can’t even think, or even move, or do any favours for themselves. Because they will be always looking out for subsidies [from the government],” he added.

The prime minister was speaking at a press conference after the launch of the National Policy on Industry 4.0 yesterday.

The national policy for Industry 4.0 — branded “Industry4WRD” — is a tailor-made policy for Malaysia as a response to the Fourth Industrial Revolution occurring worldwide which focuses on the small and medium enterprises (SMEs) in the manufacturing sector.

At the same press conference, Federation of Malaysian Manufacturers (FMM) president Datuk Soh Thian Lai conceded that while Industry 4.0 is critical, the initial costs for adoption by businesses is still quite high.

As a middle ground, Soh threw in a suggestion that instead of grants, SME manufacturers can get soft loans with low interest rates from key banks.

“In terms of funding, this is what FMM and manufacturers will work on with authorities and agencies … because the initial costs of Industry 4.0 [adoption] will be a bit high.

“This is possible to enhance the readiness of SMEs to embrace Industry 4.0,” said Soh.

“The most important is competitiveness. They must be able to compete with Asean companies and the rest of the world. SMEs have no choice but one — that is to go for Industry 4.0,” he added. “Other Asean countries are embarking very aggressively. We must do it.”

Dr Mahathir agreed on the importance of businesses adopting Industry 4.0, and pointed to conferences and exhibitions as means of encouraging companies to change.

“Bring companies [to such exhibitions], show them the machinery, show them how you can increase your production, maybe lower your cost, [show that there is] no exact formula.

“When they see this, I think they will save money to buy new [Industry] 4.0-type of factory [machines],” he said.