From The Tiny Acorn Grows A Mighty Oak

Malaysia Productivity in 2020

True systematic efficiency is a goal that requires a lot of hard work and attention to details that are otherwise overlooked. Bottlenecks, delays, excessive regulation and a lack of resources can contribute to inefficiency within our business ecosystem. Entrepreneurs have to spread their focus between improving mobility of resources or manpower, to easing the facilitation of trade and exports of their goods. This is how productivity has become one of the most important factors in Malaysia’s long-term growth, as it can influence how quickly businesses can adapt to macroeconomic challenges or sudden shifts in the global economy.

In recognition of this need for improvement in line with the objectives of Industry 4.0, the Malaysia Productivity Corporation (MPC) has avowed to revamp the way our nation tackles productivity in our workforce and industry structure. Under the Eleventh Malaysia Plan, productivity was identified as the most crucial aspect of implementation, calling for initiatives to boost productivity in a focused and targeted manner. Thus, the Malaysia Productivity Blueprint which identified 9 key productivity nexuses that were segmented into national, sectoral and enterprise levels.

Since the Blueprint was introduced in 2017, Malaysia’s private sector has led the reforms of industrial growth into becoming more internationally competitive by 2020. International Business Review does a deep dive of how industries have transformed their regulations and resources in a more balanced and transparent manner, which includes innovations in labour, technology and dealing with bureaucratic red tape. This has had no small impact on the public sector, which has well received support from the government, MPC and private industries during the economic uncertainty that plagued Malaysia during the recent pandemic.

Managing a National Ecosystem

Interview with Datuk Abdul Latif Abu Seman, Director-General of MPC

As the leading organisation in productivity enhancement, the MPC spearheads initiatives that focus on consistently improving the nation’s productivity. They have adapted their course of action in many different ways, to accommodate a variety of stakeholders in the private and public sector, as well as enhancing efficiency within both government and independent bodies. Now that we are in at the age of the Internet of Things (IoT) and must adapt to working digitally, there can be many bottlenecks that crop up within the enterprise level. Thus, MPC has been mandated in accordance with the Tenth and Eleventh Malaysia Plan to improve the progress of key economic sectors, towards the creation of a holistic and conducive business ecosystem.

These key sectors have become known as the 9 Productivity Nexuses, which encompass businesses in private healthcare, machinery & equipment, chemicals & chemical products, electrical & electronics, agro-business, ICT, professional services and retail (including food & beverage). MPC is responsible for overseeing
the productivity initiatives led by each Nexus, but they have also pledged to consistently
design new approaches to aid SMEs and MNCs combat failures within their regulatory system
and workforce productivity.

This is no small feat and International Business Review sits down with Datuk Abdul Latif Abu Seman, Director-General of MPC, to learn in detail about the organisation’s role in strengthening businesses during the economic slowdown of 2020 and the biggest milestones they have achieved for Malaysia’s national business productivity.

Ensuring that SMEs are well-supported for digitalisation is an immediate priority of ours. They should be able to have seamless movement from one innovation to the next, supported by technical assistance, and connected through a unified and international e-TRADE platform.

Datuk Abdul Latif Abu Seman, Director-General of MPC Tweet

One of MPC’s most engaging initiatives is their push for increased connectivity between individuals and companies. How can a company build these alliances both inside the organisation, and with outside stakeholders?

When we are approached for a strategic alliance, many small business owners are hesitant. I cannot blame them, for the amazing potential these kinds of partnerships hold is not always readily apparent. In truth,
strategic alliances can lead to growth for both parties.

There is so much un-catalysed power within the Public-Private Research Network (PPRN), introduced by the Ministry of Higher Education (MOHE) in collaboration with SME Corp and Malaysian Tourism Development Council (MDTC). This serves as a platform for strategic alliances between industry players and researchers in higher education, who specialise in case studies about business contracts.

Companies, especially SMEs, could be connected to these university researchers as a form of sharing information to provide productivity solutions. There is no need to work alone when local companies have a wealth of knowledge in these partnerships, which could truly spur the growth of new innovations and technological advancements.

There are other intermediary bodies that have been established by the government to encourage industry players to innovate and improve their market competitiveness and productivity. For example, PlaTCOM Ventures is one such platform which contributes end-to-end facilitation services from concept to commercialisation of technological innovation. Industry professionals who are looking to identify the best solutions for improvements on their business model can now have access to funding, infrastructure, testing, validation, regulatory certification, market intelligence and technical expertise.

I want to emphasise the importance of entering strategic alliances with local academia. Knowledge and technology, like wealth, must be shared evenly. It is one of the only ways that we can ensure effective co-operation between parties who are looking to collaborate on business solutions and efficient development of their end products. Other advantages of entering into strategic alliances include accessing new technologies, R&D resources and IP rights, diversifying products and services, improving material flow and product life cycle times. These added benefits could really make operations more agile, with reduced overhead and administrative costs.

How do you expect digitalisation to boost Malaysia’s long-term productivity growth?

Digitalisation is inevitable, and our agency has welcomed the boom and potential of digitalisation in recent months. Businesses and the public will benefit from the National Economic Recovery Plan (PENJANA) incentives on technology which when properly implemented, would lead to a surge in business productivity. MPC will assist the Digital Productivity Nexus (DPN) as one of the 9 sectoral productivity nexus established in the Malaysia Productivity Blueprint, and effectively aid implementation of all their announced incentives. These initiatives will benefit industry players by empowering businesses to adopt digitalisation in the bid
to boost productivity.

Digitalisation can be a boon to a country’s long-term development. It can spell productivity growth for a nation, and highly productive economies have proven themselves capable to adapt quickly to technological changes. DPN is relentlessly spurring this evolution forward, and has embarked on the ‘Go BIG with Digital’ initiative which aims to achieve breakthrough productivity via technological innovation. The goal of creating huge and drastic impacts in businesses will be achieved by catalysing a new wave of productivity growth, strengthening integrity and empowering the adoption of good values and best practices that can lead to improved productivity within companies.

How does MPC encourage a culture of innovation and creativity within an organisation, or prepare industry players to inculcate this dynamic mindset?

The Enterprise Innovation Programme (EIIP), as outlined in the Malaysia Productivity Blueprint (MPB), is the framework that will boost productivity and encourage more creative solutions to the timeless problems that plague businesses. EIIP has been developed to improve productivity and quality at the enterprise level, and provides a hands-on approach to resolve quality issues in existing business practices. Solutions are suggested from a team of technical experts and business leaders who can offer unique answers that are tailored to each enterprises’ particular structural issues.

The scale of improving enterprising innovation across the country is too large for just one programme to work towards. This is why we have implemented the Productivity and Innovation Capacity Building (P&I) programmes, which includes talks and training sessions to enhance productivity of the enterprise. Most medium-sized organisations prefer to implement these programs in-house in order to customise their work culture. The advantage of having an in-house programme is to enable participants to discuss work-related issues more openly.

We also believe that entrepreneurs can effectively learn more about productivity values by studying how other industries have overcome challenges and bottlenecks in their field. MPC has enforced the Sharing of Best Practices policy, which includes two major activities namely, Team Excellence (TE) Convention and Study Mission to strengthen business leaders through learning packages. With study missions, seeing is believing, and entrepreneurs can look at how industries cope with regulatory and workforce issues before implementing similar improvements in their workplace.

What moves are MPC making in the direction of Malaysia’s digitalisation?

MPC has taken the opportunity to pursue productivity culture-building programmes with external organisations using online platforms with industries and other government agencies. We have wasted no time in setting up virtual advisory services through webinars, virtual advisory clinics and virtual training.

We are in the midst of encouraging productivity training in institutes of higher education with video competitions and a prize-giving ceremony on Productivity Linked Wage System (PLWS). Experts are also given the opportunity to conduct online training such as C-Suite Executive Training for aspiring business leaders, or those looking to gain an edge over the competition. These platforms worked to share knowledge on ‘new norms’ and how to engage and maximise their employees’ productivity during the Recovery Movement Control Order (RMCO).

During this period, MPC worked together with technical experts to help facilitate the business recovery process that SMEs by using e-Business Solutions to rebuild morale and revive local businesses. Effectively, the quarantine period could be used productively, as a chance for firms to enhance their own soft skills. Other types of online facilitation is the KOPI CHAT session, an online business consultancy on Cost-Effective 14.0 Solutions, Understanding New Normal for SMEs, Module Revision, and Pitching session. A total of 14,104 participants attended these programmes, with an average of 150 participants per programme.

Please tell us more about MPC’s role as the Secretariat of the Special Task Force to Facilitate Business (PEMUDAH) and how their collaboration with the World Bank Malaysia can encourage an increase in foreign investment?

PEMUDAH’s work is carried out by its members, who are heads of federal government ministries and departments, accomplished leaders of trade and industry and members co-opted from key public sector agencies. All of these various stakeholders are working in harmony with each other to resolve efficiency issues within our business ecosystem that could be deterring foreign investment.

PEMUDAH’s governance framework and organisational structure effectively cuts across silos, smoothens process implementation and encourages teamwork and information sharing. PEMUDAH has 12 technical working groups (TWGs), aligned with the business regulation indicators of the World Bank Doing Business studies. Each of these working groups is co-chaired by a senior government head and a business leader who report directly to the PEMUDAH co-chairs – the Chief Secretary to the Government of Malaysia and the Vice-President of the Federation of Malaysian Manufacturers. These co-chairs then report directly to a
joint ministerial committee that includes the Prime Minister himself.

As PEMUDAH’s secretariat, MPC works closely with the respective TWGs to initiate and monitor the implementation of various reform initiatives. We are dedicated to playing a proactive role in the everyday activities and functioning of PEMUDAH. Our officers work closely together to facilitate the activities of the various TWGs and even help to host the PEMUDAH TWG meeting at their offices.

I can say that initiatives under PEMUDAH has made Malaysia an easier place to do business by creating an investment-friendly business climate. The Task Force has been commissioned, among many other things, with identifying and benchmarking best practices in order to improve Malaysia’s business environment, in line with economic indicators outlined by the World Bank Doing Business report. Since its establishment, PEMUDAH has and continues to work on simplifying the regulatory burdens for businesses in our economy. This is a crucial shift in focus from creating a thriving business ecosystem to also achieving comprehensive government reforms that will allow us to succeed in an international playing field.