This article first appeared in Forum, The Edge Malaysia Weekly on January 21, 2019 - January 27, 2019
On a recent benchmarking tour of countries as part of my organisation’s consulting engagements, I was privileged to see for myself how the Germans, Turks and Japanese tackled the opportunities and challenges of the Fourth Industrial Revolution. What inspired me to put pen to paper was seeing how effective these countries’ tailored approach to human capital development was compared with where we are in Malaysia.
Through the excitement and turmoil of the 14th general election, Malaysians have achieved worldwide acclaim for playing a part in reaffirming the world’s belief in democracy. Post the elections, however, I am bemused to see many seemingly perplexed by the fact that we are still facing the same economic challenges that are characteristic of a country caught in the “middle-income trap”.
A survey in The Edge’s year-end bumper issue on “Fixing the economy” had more than 50% of the people saying they did not see the difference the new government had made to the economy or that the economy was now worse off than before. We have been in the middle-income trap for many years now and will continue to be in it until we fundamentally change the basis of our economy, away from one overly dependent on commodities. In a recent speech, Prime Minister Tun Dr Mahathir Mohamad said “the country must ensure the proliferation of knowledge-intensive enterprises that leverage science and technology to take the economy to the next level”.
Reflecting on the words of Facebook chief operating officer Karel Sandberg that “the real competitive advantage in any business is one word only, which is people”, it is time we contemplated what is “Malaysian 4.0” in order to be prepared for what it will take to deliver Industry 4.0.
Siemens CEO Joe Kaeser declared that “the Fourth Industrial Revolution is not just about technology and business, it is about society”. The World Economic Forum warns that the price of getting it wrong is social unrest and anarchy. It goes on to say that if this happens, citizens will no longer believe that governments are able to fulfil their purpose of enforcing the rule of law and providing security.
Like the passengers on the Titanic, I think that we are still blissfully unaware of the chilling impact the Fourth Industrial Revolution has in store for us. Consider the scenario where the transportation as a service (TAAS) business model, powered by electric autonomous vehicles, becomes a viable alternative for commuters. A very relatable scenario if you consider that it is really only Grab, Waze and electric vehicle technology and business models combined.
Technology consultancy RethinkX posits that by 2030, TAAS will cause the vehicle fleet in the US to drop from 247 million to a mere 44 million. Again, a believable ratio considering your car wastes 80% of its life either parked or in traffic. TAAS technology and its asset-sharing business aims to overcome both.
To hit the point home, RethinkX says by corollary, this will cause global oil demand to drop from 100 million barrels per day in 2020 to around 70 million barrels per day in 2030. Today, we fidget nervously watching the price of oil fluctuate due to familiar market factors, anxiously contemplating its impact on the national budget and economy. The impact of TAAS will be devastating by comparison. The only respite will be if we instead pivot, embrace and thrive from it.
But just as in the movie Titanic, the parting words of Leonardo DiCaprio’s character — “I don’t know about you but I intend to write a strongly worded letter to the White Star Line about all this” — sums up what action Malaysians can take for now. I say this because we are predominantly followers rather than creators and leaders of technological trends.
The phrase “buat apa nak pening kepala” best describes the accompanying mindset. This puts us in a precarious position when you look at our comparative cost in the region. It leaves the lucrative Southeast Asian market open to exploitation by other more capable nations and regional dark horses like Vietnam coming quickly up the ranks.
Germany, Turkey and Japan have a long and continuous indigenous technology development history built on an established knowledge culture. A knowledge culture is one that understands and internalises all knowledge for its own sake, and is then able to manifest its benefits in all aspects of societal activities. This is a prerequisite of success in the Fourth Industrial Revolution.
The game-changing design philosophy of Apple’s products was famously inspired by Steve Job’s reverence for the art of calligraphy. In Turkey, I took part in the ancient art of Turkish archery and could see how the preservation of that art reverberates through their military technology. In Malaysia, we need to graduate our knowledge infrastructure, comprising educational institutions, research centres and skill colleges, to function as both repositories and springs of knowledge so that they can deliver the human capital and technological value we so desperately need.
Malaysian 4.0 must be one who is able to see and seize opportunities by having a globally competitive capability and outlook, and in that order. The former’s inception does not lie in the mastery of complex technology but in such basic abilities as communicating effectively. Developing an idea requires people to listen, process and reciprocate. It is unfortunate, therefore, that the rote learning that most Malaysians are subject to trains one predominantly to memorise, anticipate and then regurgitate.
Intelligence in this context is assessed more as a test of reflexes than of the ability to create value. Without Malaysian 4.0, Industry 4.0 will be impossible because we will be bereft of the ability to contain and prioritise the multitude of business scenarios that will emerge due to the maturing of underlying technologies.
Malaysian 4.0 must take charge of his market and determine the values that it must seek so that he can harness the technologies that will deliver these values. In other words, Malaysian 4.0 must see and design the market that he aims to serve. In the example of TAAS, the market is a service industry first before the industry of the vehicle that provides it (that is today’s automotive industry). Only by knowing that would you be able to calculate what number of vehicles you need to provide and then to select which technologies to deliver the efficient and environmentally friendly service business model preferred by the populace.
Malaysian 4.0 is an entrepreneur irrespective of his occupation, thriving in a sea of uncertainty with the vigour of a child, the skill of a solo violinist, the wisdom of a sage and the patience of a monk. Malaysian 4.0 must therefore be inwardly contemplative and motivated rather than outwardly tethered to perceived notions of self to have any chance of breaking through to new horizons of opportunity.
It is time for Malaysian 4.0 to emerge and we must focus our energies on orchestrating his birth because Thai 4.0, Indonesian 4.0 and Vietnamese 4.0 are already underway.
Naguib Mohd Nor is the CEO of Strand Aerospace Malaysia
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