KUALA LUMPUR (Oct 31): The limitless growth potential from digital adoption amid the fourth industrial revolution "boils down to knowledge on application", said Prime Minister Tun Dr Mahathir Mohamad.

Speaking at the launch of the National Policy on Industry 4.0 here, Dr Mahathir said the substance of the fourth industrial revolution "lies in the application of available new technologies".

"We have seen how application of information technology and the Internet of Things have opened up market supply chains, easing access to products from the most remote areas, bringing wealth and prosperity to even the rural areas.

"The Fourth Industrial Revolution can address many issues concerning businesses, including the environment, health and safety of workforce, waste management, efficiency in managing supply chains, resources and delivery systems," said Dr Mahathir.

"The potential for growth is limitless, but it all boils down to knowledge on application," he added.

Dr Mahathir today launched the Policy on Industry 4.0 named 'Industry4WRD' — a tailor-made policy for Malaysia focusing on small and medium enterprises (SMEs) in the manufacturing sector, as a response to the fourth industrial revolution occurring worldwide.

At a press conference later, Dr Mahathir emphasised the need for such policy, as he expressed distaste towards the restrictions pressed unto SMEs in Malaysia when they seek to drive innovation.

"I invested some money to build a small plane. You know what [the authorities] asked? Whether the team has aero engineers… of course we do not have it as it is a small project. So [the team] did not build it.

"The plane was eventually built in the Czech Republic. I have flown in it… and they were never asked whether the company had enough engineers or experts. If we keep on doing that, we will never progress.

"In the US they build aeroplanes in their backyards and they can still fly. But here [authorities say] 'no, it is dangerous'. So, forever we will be using other people's plane," he said.

Sub-sectors in focus are as underlined in the Mid-term Review of the 11th Malaysia Plan 2016-2020 namely electrical and electronics (E&E), machinery and equipment (M&E) chemicals, aerospace and medical devices, said the Ministry of International Trade and Industry (MITI) in a statement.

The government, said Dr Mahathir, maintains that to drive the economy, it must remain the backbone of the economy supported by other sectors like commodity and services.

"Manufacturing firms can no longer reap the same yields as in previous decades if they continue to rely on capital and labour as productivity levers," Dr Mahathir said.

"We have lagged behind and in order to catch up, we need to run faster than our competitors. It is like a marathon, while we pace ourselves, we still need to be several steps faster or we will be consistently behind.

"Smart manufacturing will eventually lead to the emergence of smart cities, smart grids, smart services et cetera in Malaysia. Industry4WRD can be a clear strategic direction for the nation since these technologies apply across the board," he added.

MITI, which has worked on the policy since mid-2017, said the government will act as an enabler through a five-thrust concept named FIRST — funding, infrastructure, regulatory frameworks, skill improvement programmes and technology accessibility — to reach specific goals by 2025.

This includes to increase the productivity level of manufacturing industry per person by 30% to RM138,641 from RM106,647.

Concurrently, it sought to elevate absolute contribution of the manufacturing sector to the economy to RM392 billion, from RM254 billion representing 23% gross domestic product presently.

The government also envisions high-skilled workers to rise to 35% of total workforce in the manufacturing sector, from 18% presently.

Finally, the government aims to lift Malaysia to among the top 30 countries in the world in the Global Innovation Index, from 35th place presently.

The government also introduced the Industry4WRD Readiness Programme to allow businesses to assess existing gaps in their manufacturing lines and operations, with targeted intervention of experienced assessors, it said.

"This policy envisions Malaysia as a strategic partner for smart manufacturing, primary destination for high-tech industries and total solution provider for manufacturing and related services in the region," it added.