MALAYSIAN TECHNOLOGY STRATEGIC OUTLOOK 2019/2020

MALAYSIAN TECHNOLOGY STRATEGIC OUTLOOK 2019/2020

MALAYSIAN TECHNOLOGY STRATEGIC OUTLOOK 2019/2020

INTEGRATION OF HIGH TECHNOLOGY

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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology

PUBLISHED BY Malaysian Industry-Government Group for High Technology (320059-P) MIGHT Partnership Hub Jalan Impact

63000 Cyberjaya Selangor, Malaysia.

www.might.org.my

© MALAYSIAN INDUSTRY-GOVERNMENT GROUP FOR HIGH TECHNOLOGY (MIGHT), 2020

ISSN No. : 2773-5133 e-ISSN No. : 2773-5168

PRINTED BY Code of Origin Sdn. Bhd. (1063660M) No. 23-02, Oval Tower@Damansara, Menara Permata Damansara No 685, Jalan Damansara 60000 Kuala Lumpur, Malaysia.

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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology

MALAYSIAN TECHNOLOGY STRATEGIC OUTLOOK

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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology

TABLE OF CONTENTS

i ii

ACKNOWLEDGEMENT QUOTES FROM YAB PRIME MINISTER OF MALAYSIA

iv vi viii ix

QUOTES FROM YB MINISTER, MINISTRY OF SCIENCE, TECHNOLOGY AND INNOVATION (MOSTI) MESSAGES FROM THE JOINT CHAIRS MIGHT AND PRESIDENT & CHIEF EXECUTIVE OFFICER, MIGHT EXECUTIVE SUMMARY ABOUT MIGHT

A. THE INSIGHT High Technology Industries Overview

C. TECHNOLOGY IN CRISIS (2020 AND BEYOND) Introduction Digital Technology • Artificial Intelligence • Bioinformatics • Blockchain

02 06 10 17 20 25 31

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MIGHT FIRST™ Matrix • Funding & Finance • Infrastructure • Regulation & Governance • Skills & Talents • Technology

63 66 73

Food & Health Security • Modern Agriculture Transportation & Logistics • Autonomous Vehicles

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B. HIGHLIGHTS IN TECHNOLOGY APPLICATIONS (2018-2019) Mobility • Aerodyne Group • Asian Rail Academy • CTRM Aero Composites Renewable Energy • UNITEN R&D Sdn Bhd • Institute of Energy Infrastructure • PETRONAS

84 89 92

• Biofuel • Drones Future of Work

42 43 45 47 50 52 55 57

101 107

• Collaborative Robotics • Work from Home (WFH)

D. MOVING FORWARD Moving Forward References

117 120

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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology

ACKNOWLEDGEMENT

We would like to acknowledge the contribution and assistance of many individuals and organizations involved in this project. More spe- cifically, to the authors, reviewers and editors that took part in the completion of the Malaysian Strategic Technology Outlook 2019/2020 document. Without their support, this publication would not have become a reality. On a personal basis, we would like to thank each and every one of the organizations for their contributions. Our sincere gratitude and thanks go to the authors who contributed their time and expertise to this document. We are immensely grateful. Second, we wish to acknowledge the valuable contributions of the reviewers and editors in ensuring the quality, coherence, and content presentation of the document. Last but not least, many thanks go to the team for their effort and commitment to deliver the publication.

External Contribution Aerodyne Aerospace Malaysia Innovation Centre (AMIC) Ahmad Fairuz Mohamed Noor, National Cyber Security Agency (NACSA) Asian Rail Academy Composites Technology & Research Malaysia (CTRM) Dr. Aziz Hassan Intellectual Property Corporation of Malaysia (MyIPO) PETRONAS Prof. Dr Mohamad Osman Prof. Dr. Norita Md Norwawi, Universiti Sains Islam Malaysia (USIM) Tenaga Nasional Berhad (TNB) Universiti Tenaga Nasional (UNITEN)

Consultant Copyeditor Suhaimi Mohamed Ariffin

Editorial Team Mohd Nasir Md Ibrahim Dr. Aini Abdullah Nik Sufini Nik Mohamed Nor Syahira Sahari Nur Suraya Mustafar Raha Halip Rosniwati Hasan Safiyyah Mohd Salleh Ts. Farah Abu Bakar Ts. Izzatul Huda Mohd Jalil

And last, but not least, special thanks to the members of our Management for their thoughtful encouragement and close supervision.

Internal Contribution Ir Qaharuddin Abdullah Mahalil Amin Abdul Malek Mastura Ishak Mohd Hasan Mohd Saaid Natrah Mohd Emran Robert Tai Chiang Vun Suzie Ismail

Advisor Datuk Dr. Mohd Yusoff Sulaiman

Project Director Mohd Zakwan Mohd Zabidi

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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology

QUOTES FROM THE PRIME MINISTER OF MALAYSIA

TAN SRI DATO’ HAJI MUHYIDDIN YASSIN

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The only way for Malaysia to become a high-income nation is to become a high- tech country. History had shown that the economic and military strengths of a country depend on its mastery of technology.

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The pandemic has changed our way of lives. However, in the new norm, there are opportunities for the government to look into certain sectors that need to be enhanced to develop the nation and help the rakyat.

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I believe by looking into some current regulations and providing some leeway will enable the testing and development of new technologies.

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Launching of the National Technology and Innovation Sandbox (NTIS)

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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology

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Future trends indicate that technology-related fields will become highly sought professions . The use of the latest technologies will turn this 3D image into one that is prestigious because the technical profession requires a deep degree of knowledge and expertise. The government will strive to strengthen the quality of STEM (Science, Technology, Engineering and Mathematics) and TVET (Technical and Vocational Education and Training) graduates in its efforts to develop the technical profession. To date, Malaysia has a total of 203,966 registered members in various technical skills and professions, clear proof of the critical roles they play in the country’s development.

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National Technical Profession Day (HPTN) 2020

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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology

QUOTES FROM YB MINISTER MINISTRY OF SCIENCE, TECHNOLOGY AND INNOVATION (MOSTI) YB KHAIRY JAMALUDDIN

“ “

By setting a target of becoming a high- technology country, the efforts would be able to reduce dependence on foreign technology and labour. An integrated approach combining the two major sectors of the country, namely 'STI' and 'Economy' as one sector to ensure that all programmes are implemented to complement each other and have a high impact, thus making STI as an enabler in addressing national issues and challenges.

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In the efforts to make Malaysia a high- technology country with a GERD (Gross Domestic Expenditure on Research and Development) of 3.5 per cent by 2030, 10 STIE leap programmes have been formulated.

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Launching of DSTIN & 10-10 Framework of MySTIE

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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology

“ “

The government has the responsibility to invest in R&D so those that are successful later could be commercialised, with private sectors investing in them. R&D funds under the Malaysia Grand Challenge (MGC) initiative was in support of Malaysia's High-Tech Nation Council in charting the current and future technology development in the country that would cover issues like health, environment, food, access to technology and security.

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Malaysia Grand Challenge (MGC) launching ceremony

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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology

TAN SRI DATUK DR. IR. AHMAD TAJUDDIN ALI, FASC JOINT CHAIR (INDUSTRY) | MIGHT MESSAGES FROM THE JOINT CHAIRS OF MIGHT AND PRESIDENT & CHIEF EXECUTIVE OFFICER, MIGHT DATUK IR. (DR.) ABDUL RAHIM HJ. HASHIM JOINT CHAIR (GOVERNMENT) | MIGHT

DATUK DR. MOHD YUSOFF SULAIMAN PRESIDENT & CHIEF EXECUTIVE OFFICER | MIGHT

As a driving force in Malaysia’s high-technology ecosystem, MIGHT serves the nation by playing a pivotal role in nurturing, expanding and building high-technology capacity through public-private partnerships. Given its mandate to advance the nation’s high-technology capacity, there is increasingly a steady stream of national and global exchange of ideas and innovation which helps localise R&D solutions, avail business opportunities and ultimately enhance the nation’s competitiveness. To maximise economic growth, the nation needs to accelerate the adoption of new technologies in tandem with the dynamic environment in which we operate. Malaysia’s performance in high-technology export is encouraging. In 2018, the nation had a total high-technology merchandise export value of USD90.36 billion, and a year-on-year growth of 22.0%. On the global front, Malaysia contributed 2.90% of the world’s total high-technology merchandise exports in 2017, up by 0.27% from 2016. There is aneed for businesses toharness scientific and industrial capabilities through technology-enabled transformations to spur growth in the Malaysian economy. To this end, a stable and coherent framework for technology-enabled transformation is critical. The combined impact of mapping future technology transformation growth prospects complemented by requisite strategies will see Malaysia well positioned to benefit from new sources of economic growth. Also critical is sustained growth which necessitates an ambitious innovation and growth strategy fueled by new technologies and tools with ideas propagated by the public-private partnership. Given the paramount role that technology and innovation plays in the progress of a nation, MIGHT is once again proud to showcase our second edition of the Malaysian Technology Strategic Outlook 2019/2020 which offers a broad perspective of high-technology industries in Malaysia and features our very own MIGHT FIRST™ analysis. Through MIGHT FIRST™ foresighting methodologies are employed to anticipate possible futures and steer preparedness in seizing opportunities and mitigating possible risks; a forward look that is both strategic and holistic in anticipating the future. With COVID-19 spreading across the globe, disrupting health, businesses and economies in an unprecedented way, existing business models may no longer be viable. Although the impact of COVID-19will linger for years tocome, thepaceof technology

innovation should not be compromised. On the contrary, the Government, industries and society should continue to swiftly respond to this disruption to minimise impact, recover and emerge stronger. This demands reinvigoration and resilience. Malaysia aspires to be among the top 30 innovative nations in the world by 2025. MIGHT’s pivotal role in spearheading the quadruple actors and driving transformational changes across industries, government ecosystems, academia and the civil society will continue to strengthen national innovation and promote sustainable and inclusive growth in Malaysia. We trust that the insights gained from this publication will provide the impetus for the development of requisite strategies to leapfrog other manufacturing countries; this by adopting cutting-edge approaches and offering new opportunities for local niche manufacturing. On behalf of MIGHT and the Editorial Team of the Malaysian Technology Strategic Outlook 2.0, we thank all members and partners of MIGHT for their contribution towards making this publication a success.

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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology

EXECUTIVE SUMMARY

In this new edition, our theme revolves around the COVID-19 pandemic where we explore impacts to industries and our country’s socioeconomic. Our focus however is not at the expense of ignoring other global and local events and trends, but rather prioritising on the traditional economic leading indicators in the context of COVID-19 to equip the readers with information to identify tipping points presented about by this pandemic and, how to deal with it in the post crisis. As widely acknowledged, COVID-19 has caused socioeconomic havoc and chaos across the globe. One positive way of looking at the current troubles is the world should hit the reset button in the post crisis. The ‘new normal’ seems like the favourite catch phrase around the globe. In the absence of vaccines, to stop corona virus, nations need to radically change almost everything they do: how work is done, exercise, socialise, shop, manage our health, educate our kids, take care of family members. A thinking nation would take this opportunity (yes, it is true what they say about what the threat does) and run with it. We explore insights from our team and industry experts as to how the Government and industry could prepare and equip themselves when the economy and social life return to normal (new normal), post pandemic. Digging deep into the performance of high technology locally and globally; we focused on how the pandemic impacted the local economy consisting of various industries and societies at large. As recession is underway and before it becomes severe, Malaysia like other economically advanced countries adopted expansionary fiscal policy by putting stimulus packages in place to assist the local businesses and putting more money directly into the pockets of consumers. Several government driven initiatives and programmes are introduced to keep our economic engine humming such as assisting micro-SMEs and limiting retrenchment. To date, the Government has announced USD59.6 billion to fight the COVID-19 virus. We recognise that the pandemic COVID-19 is a low probability, high impact event that comes around maybe once in a lifetime. The last time the world had witnessed an economic downturn of this magnitude was the Great Depression in 1929 in the U.S.

It took a decade for the U.S. to recover, but we predict the Malaysian economy will take a lot less time than that to recover due to the built-in resiliency other than economic stimulus and policies such as effective public healthcare management and infrastructure and, obedience citizens. We outline suggestions on how to deal with this sort of rare and black swan event moving forward from a policy perspective. For decades, public policies have been designed to deal with such current and post events yet apparently not enough. Several times over the last fewdecades, pandemic and endemic have caused either mild or severe socioeconomic disruptions. We ask pertinent questions about our understanding, approaches to policy making and its implementation. We suggest a technique to formulate policies, rules, and regulations, as far as the government is concerned. The technique is to detect fragility in all aspects of the socioeconomic in Malaysia. This is important because fragility comes directly from nonlinearity and convexity effects, and that convexity is measurable. The technique, in a position to detect acceleration of harm, applies to anything that entails making decisions under uncertainty, and risk management. We close by proposing the National Interest Guiding Principles in formulating and reformulating viable policies to motivate industry players to create positive economic impact to stakeholders. We hope lessons learned from crisis such as COVID-19 help us navigate to a better Malaysia.

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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology

ABOUT MIGHT

WHO WE ARE TheMalaysian Industry-GovernmentGroupforHighTechnology (MIGHT), is a not-for-profit company limited by guarantee under the purview of the Prime Minister’s Department. As at 1 April 2020, MIGHT came under the monitoring and supervision of The Ministry of Science, Technology and Innovation (MOSTI). MIGHT plays a key role in developing Malaysia’s high technology industry through its role as a think-tank, private- public consensus building and business nurturing platform. Established in 1993, MIGHT has carried out its mandates and roles for more than 25 years through the development of various national strategic initiatives

MISSION To serve the nation in advancing competency in high technology through partnership towards sustainable development OBJECTIVES • Partnering to delivering impact • Nurturing techno-business innovation • Setting a common direction for high technology industry development • Securing financial foundation for growth and sustainability • Developing capability and competency for high technology industry

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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology

PART A THE INSIGHT

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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology

HIGH TECHNOLOGY INDUSTRIES OVERVIEW

Malaysia is set to be a main player in high technology industries and realising the aspiration of being ranked among the top 30 nations in the Global Innovation Index by 2025. To achieve this, Malaysia needs to accelerate its adoption of new technologies with even greater tenacity, creativity, and effectiveness to ensure rapid and sustainable growth. The Government has looked seriously into science and technology (S&T) related activities dating back to 1986. Where the National Science and Technology Policy (NSTP) was first introduced. Since then, several other S&T policies were announced and implemented like second NSTP and National Policy on Science, Technology & Innovation (NPSTI). These initiatives foster the economic growth; driving robust electronic manufacturing activities. The country aspires to become an innovation specialist with focus on developing a foundation of fundamental research; and encourage cross- collaboration between academia and industry. Struggling to replicate the success to other industries, the country endeavoured in developing innovative technologies to move up the value chain. Therefore, NPSTI is focusing in nine niche areas- biodiversity; cybersecurity; energy security; environment and climate change; food security; medical and healthcare; plantation crops and commodities; transportation and urbanisation; and water security. This shaped the innovation agenda – effective commercialisation continued to become one of the country’s main challenges. 1,800 START-UPS IN MALAYSIA DOMINATED BY E-COMMERCE, FINTECH, AND LIFESTYLE MOBILE APPS

Through Industry 4WD initiative; Malaysia re-strategized its approach as a foundation for a digital transformation of manufacturing. The country continues to work through proof-of-concept and pilot projects to showcase the value of implementing technologies like robotics or IoT platforms. Human factor remains one cornerstone of a successful digital transformation and is being addressed. Indirectly, this initiative promoted the growth of start-up companies. An estimated 1,800 start-ups in Malaysia are largely dominated by e-commerce, fintech, and lifestyle mobile apps. Start-ups targeting these industries have garnered the largest investment rounds in recent years. Video stream app Iflix, used car sales platform Carsome, and fintech company Jirnexu being some top leaders in terms of amount of funding raised. These start-ups are taking their first steps - hopefully towards becoming unicorns – which may still be several years away from their nearest competitors.

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Malaysian Technology Strategic Outlook 2019/2020 Intergration of High Technology

According to OECD, the industries identified as high technology sectors include the pharmaceutical, medical, precision, and optical instruments industry, the radio, television, and communication equipment industry, the aircraft and spacecraft industry, and the office, accounting, and computing machinery industry. During the UK visit in June 2019, the Prime Minister has said Malaysia is seeking investments in high technology in line with the country’s goal to provide high income for its people (Othman). The investments, he said, were necessary to boost the country’s growth. Malaysia was a business-friendly nation and ready to fine-tune its policies to accommodate investors. Coupled with a better trained work force, he expressed confidence that investors would find Malaysia a comfortable investment destination. The country now shifted towards a high technology, knowledge-intensive, high value-added and capital-intensive industrial base. Emphasising on digital transformation, integrating local businesses into international supply chains, as well as creating more skilled job opportunities for local talents. High technology industries ensure the production of exportable products, enhance international competitiveness of countries, attract qualified labour

force, and ensure production of high value-added products. These are related to complex processing of raw materials, innovative activities, as well as translation of research and technology (R&T) into various spill overs. High Technology vs. Industry 4.0 What exactly is the difference between high technology industries and Industry 4.0? High technology is a generic term referring to diverse industrial classifications and innovations driven by the technology intensiveness on R&D expenditure over the production output of the value added. Whereas Industry 4.0 comparatively is a term globally used to define the fourth revolution that has occurred in manufacturing. From the first industrial revolution (mechanisation through water and steam power) to the mass production and assembly lines using electricity in the second, the fourth industrial revolution will take what was started in the third with the adoption of computers and automation and enhance it with smart and autonomous systems fuelled by >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 108 Page 109 Page 110 Page 111 Page 112 Page 113 Page 114 Page 115 Page 116 Page 117 Page 118 Page 119 Page 120 Page 121 Page 122 Page 123 Page 124 Page 125 Page 126 Page 127 Page 128 Page 129 Page 130 Page 131 Page 132 Page 133 Page 134 Page 135 Page 136 Page 137 Page 138 Page 139

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