How does MIGHT contribute to the overall development of Malaysia’s economy?
SULAIMAN: The Malaysian Industry-Government Group for High Technology (MIGHT) is an organization that is under the purview of the Prime Minister’s department. MIGHT ‘s objectives are geared towards the overall development and advancement of high technology interests in Malaysia. It acts as a think tank that underlines the key strategies that must be taken in order to develop the country’s high technology industry and to further position Malaysia as a globally competitive player. We construct these strategies based on the combined input from the high technology industry, governmental and non-governmental organizations, and academic institutions. We also partake in the nurturing of high technology industry start-ups. We implement strategies that will help their businesses grow for the first 3 years until they are successful enough to continue on their own. For example, we have been consulting for companies in the areas of biotechnology, nanotechnology, and sensor technology.
What new initiatives is MIGHT currently involved in?
SULAIMAN: MIGHT is always involved in new initiatives because we have a methodology called Foresight. Our methodology is geared towards identifying new and emerging technologies that will propel Malaysia onto the global platform. We are always on the lookout for innovative activities that the country can incorporate into its industries. There are some traditional sectors where the vision of high technology is still very low, such as the railway, shipbuilding, aerospace, and automotive industries. As a result, we have been pumping new ideas into these areas, specifically looking at improving design activities and implementing more efficient processes. Ultimately, we are trying to make these industries more high tech. The government’s current involvement in infrastructure projects such as MRT (MY Rapid Transit) provides numerous opportunities for these industries to develop and grow. For example, we are now focusing on the transportation sector as an industry and not just a service provider. I believe that there is synergy between the railway, aerospace, shipbuilding, and automotive industries that we hope companies can leverage in order to expand their businesses and become more global. Another area that we are looking to become more involved in is the green technology sector. The environmental impacts from manufacturing certain products and materials are now receiving worldwide attention. Malaysia must start incorporating green technology into its industries so that it adheres to global environmental guidelines. I believe that organizations and companies from developing countries are skeptical and apprehensive about the overall benefits of implementing green technology. It is our job at MIGHT to make them see the effectiveness and implications of moving in a more environmental friendly direction. They must realize that there are long-term benefits for both their businesses and society as a whole. As a result, we are looking at green technology very seriously.
What is the Global Science and Innovation Advisory Council (GSIAC)? How is MIGHT involved in the GSIAC?
SULAIMAN: The Global Science and Innovation Advisory Council (GSIAC) was formed by the Prime Minister last year. It acts as a global platform for him to discuss some of his most recent economic and scientific ideas. The council is now jointly managed by MIGHT and the New York Academy of Sciences. The council is comprised of noble laureates, captains of global industry, academicians and scientists. We have already had two meetings where the Prime Minster discussed some of his ideas on education development, ICT applications, and green technology solutions. This platform is important because the Prime Minister can receive feedback on his ideas that are geared towards developing the economy and meeting the overall objectives of the Vision 2020.
What are your future growth strategies in the focus areas of aerospace, maritime, and rail?
SULAIMAN: When we first created MIGHT in 1995, our initial focus was geared towards the aerospace industry. We began with aerospace because it incorporates leading age technology that can be utilized across all sectors. Our main objective was to provide a gateway for this high technology to enter into Malaysia and then to be applied throughout the industry. Next, our goal was to create a global company that could support the whole vendor development system that is comprised of small and medium enterprises (SMEs). We then formed CTRM (Composites Technology Research Malaysia). At the time, we were able to qualify CTRM as a supplier for BAE Systems. The company has grown very quickly and is now a preferred tier 2 supplier for both Boeing and Airbus. Today, we now have “Made in Malaysia” parts and components on most of the aircraft that are flying around the world. CTRM (Composites Technology Research Malaysia) has established a strong presence as a preferred company in the global supply chain. Most importantly, they have created opportunities for more than 100 companies in Malaysia to become a part of the global supply chain. As a result, we have a very stable aerospace industry from a manufacturing standpoint. We are now pushing into the maintenance and repair side of the aerospace industry. Currently, our market share in the global maintenance sector is roughly 4.5%. Our future goal is to increase this number to 5%. With the global presence and expansion of Air Asia, I believe that we can reach this target by the end of 2012 or in the early months of 2013. Our dream of Malaysia becoming a global player in the aerospace sector has come into reality sooner than we expected. We believe that we can duplicate this success in the shipbuilding and railway industries. Malaysia’s shipbuilding industry is quite well known. The industry focuses on manufacturing innovative and sophisticated vessels that are below 100 meters in size. These ships are mostly made from composite parts. We need to have a greater presence in the global shipbuilding industry. In terms of developing the industry, we would like to expand the country’s number of oilrig platforms and offshore vessels. We are trying to insert a catalytic element into the sector that will spur the growth of the overall industry. Furthermore, Malaysia’s geographic location is a competitive advantage for its shipbuilding and repair industry. The country lies close to the Strait of Malacca, which carries a large volume of the world’s trade goods. This is significant because it allows you to tap into the ship maintenance business. In order to take advantage of this opportunity, we are now upgrading the facilities at our ship repair yards. Next, with regards to the railway industry, we already have one global company named Scomi Rail. Scomi Rail is a leading provider of urban transit systems. It is one of only two integrated monorail system providers in the world that offers end-to-end solutions for urban transit. They now have major contracts with Brazil and India. We are currently focusing on creating a vendor development program for Scomi Rail that can help support its business. We need to start investing more into this company so that it can improve its systems and draw in potential partners. In the end, a global company must be able to have all of its components tied up together. I believe that Malaysia has a strong enough infrastructure that will allow small and medium enterprises to develop and grow. This in turn will create support systems for the larger global companies. As a result, I believe that Malaysia will become a significant global player in the aerospace, shipbuilding, and railway industries.
How is progress in each of these key areas being measured?
SULAIMAN: In terms of our key performance indicators, I like to think that we are somewhat of a surrogate mother. We partake in the development of high technology that is then carried out and implemented by other industries. One of the key performance indicators that we look at is our contribution to the manufacturing industry. At the moment, this stands at roughly 50%. We are very happy that the high tech manufacturing base industry is contributing this high of a percentage to the overall manufacturing sector. In turn, this benefits the long-term interests of the country. We are also looking at our contribution to the services sector. This is a little bit more difficult because Malaysia’s services sector is mainly comprised of financial institutions and consulting agencies. We need to figure out how to increase the use of high technology in the services sector. We are currently focusing on the maintenance and repair industry but we must figure out how to expand our business further. Our other key performance indicator is to identify how many of our companies have gained global recognition. Our target is to grow local companies into global players. We have done really well in achieving this goal in the aerospace industry. CTRM (Composite Technology Research Malaysia) has transformed from a local company into a significant global player that is now a supplier for Airbus and Boeing. However, with regards to the automotive sector, we still have a long way to go in terms of creating a global brand. Proton is a large company that has some reach around the world but there are still a lot of gaps that must be filled. We are also looking to increase the number of skilled workers in the labor force. We have created MIGHT-METEOR Advanced Manufacturing, which is a human capital development center that provides programs for graduates. We also have programs that are catered towards lower skilled workers in order to increase their competency for high technology. We now have roughly 20 skilled workers per every 10,000 people in the labor force. Our goal is to increase this number to 60. These are some of the key performance indicators that we are looking at achieving and I think we are almost there. However, we must go beyond these indicators in order to satisfy the overall objectives of the country.
We partake in the development of high technology that is then carried out and implemented by other industries. One of the key performance indicators that we look at is our contribution to the manufacturing industry. At the moment, this stands at roughly 50%. We are very happy that the high tech manufacturing base industry is contributing this high of a percentage to the overall manufacturing sector.
In what ways are you working within the greater national framework with regard to Malaysia’s New Economic Model (NEM)?
SULAIMAN: The government has been investing heavily in Malaysia’s technology sector. With regards to high technology, the government has been focusing on how the industry can help sustain businesses over a longer period of time. We are trying to generate business for Malaysia that, in turn, could produce a large amount of revenue for the country. We would like to think that the government’s investments are going towards high valued businesses that incorporate a lot of high technology content. Our job is to identify the role that high technology plays in the government’s New Economic Model. So far, MIGHT has been developing new businesses that help support the Malaysian economy. One of the industries that we are creating new businesses in is biomass. We are looking to transform waste into wealth. For example, the oil palm plantations generate the majority of our biomass. We are working on converting this biomass into high valued products such as chemicals. So our main goal is to spark new economic activities that will act as income multipliers for the country. We are also working closely with the industry to improve our system integration. This means your ability to integrate systems in any form of application. In fact, we have created a company that is specifically geared towards the development of system integration capability. This company is a part of the aerospace industry and is working directly under CTRM (Composite Technology Research Malaysia). System integration is extremely important because we must understand how and why certain things go into a particular system. This is significant because Malaysia must become less dependent on foreign exports and services. I also think that, in terms of insuring the continuous economic development of our country, we must be able to look beyond the horizon. We have to anticipate what new and emerging technology sectors are going to be the most relevant. This is not just important for Malaysia, but for entire region of Southeast Asia. MIGHT has been facilitating this idea of looking into the future by incorporating its methodology of Foresight. We are able to identify which technologies and sectors are going to emerge within the next 3-5 years. This methodology can align with many of the strategies that are being implemented into our national plans. Lastly, I think it is always important to look at our development strategies in a regional context. MIGHT not only focuses on the development of the local economy, but also the entire region of Southeast Asia. We want MIGHT to be viewed as an organization that has both a local and global impact.
Where do you see opportunity for FDI within MIGHT’s focus areas?
SULAIMAN: We are always looking for foreign direct investments to help grow the high technology industry in Malaysia. However, we are very selective in the type of foreign investments that we are looking to attract. For example, in the aerospace sector, we have brought in Spirit AeroSystems, which is a tier 1 supplier for Airbus and Boeing. It is important to draw in foreign investments that meet a certain standard. Malaysia is an attractive destination for investors and is a significant player on the global platform. The country provides investors with political stability, strong infrastructure, and appealing incentives. I believe that, if we are able to provide a good package for these investors, they will come. We are trying to integrate foreign investments into the value chain that we are creating. We are developing companies that provide high value products and in turn generate a large amount of revenue for the country. We are no longer looking for investments from multinationals that become isolated because they fail to contribute to the overall ecosystem. We want foreign investments to spillover into all industries. I believe that foreign investors will be looking into other areas besides aerospace. For example, we are working very closely with Thales Group from Canada. We are also looking to work with companies such as Hyundai Rotem from Korea. In order to drive innovation in Malaysia’s economy, we must have a link with major global players. It is extremely important to work with partners who have a global impact.