Is Malaysia Ready for the Fourth Industrial Revolution?: The Automotive Sector as an i4.0 Springboard

Is Malaysia Ready for the Fourth Industrial Revolution?: The Automotive Sector as an i4.0 Springboard

Mathew Maavak (Universiti Teknologi Malaysia (UTM), Malaysia) and Aini Suzana Ariffin (Universiti Teknologi Malaysia (UTM), Malaysia)
DOI: 10.4018/978-1-5225-3468-6.ch003
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Malaysia intends to ride on the crest of the coming i.4.0 wave. According to the 2016 GE Global Innovation Barometer study, a significant number of Malaysian executives felt positive about embracing i4.0 vis-a-vis their global peers. On the surface, Malaysia appears ready for its own i4.0 revolution. According to the WEF's Networked Readiness Index on digital readiness, Malaysia was ranked 6th in terms of having the most tech-savvy government in the world. The automotive sector is ideally suited to kickstart the i4.0 revolution as it was traditionally regarded as the “industry of industries” – particularly due to its traditional role in spearheading wider, cross-sectoral industrialisation. However, Malaysia is not yet ready to embrace the 4th Industrial Revolution. This chapter discusses the obstacles, challenges, and opportunities facing i4.0 uptake in the Malaysian automotive industry. It ends by recommending a unique pathway for i4.0 adoption in the sector.
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Industry Background

The Fourth Industrial Revolution is the culmination of centuries of technology-driven progress. Also called Industry 4.0 or i4.0, the new industrial paradigm is expected to usher in a range of new technologies that will fuse the physical, digital and biological worlds. Since it is poised to impact all disciplines, economies and industries, Brynjolfsson and McAfe (2016) have described the coming epoch as the “second machine age”; one that will feature a fully-integrated virtual dimension to industry. Using this description, it can be assumed that the “first machine age” kicked off with the First Industrial Revolution which birthed new inventions and manufacturing processes during a 100-year period that ended in the mid-1800s (Landes, 1969). Industries began to be mechanized and nations that built and harnessed machines began to colonize the world.

The ensuing Second Industrial Revolution witnessed another surge in cross-sectoral inventions, notably in the transportation sector (Engelman, 2015). Mankind’s technological progress could now be measured in the proliferating numbers and types of cars and aircraft. The Taylorian production process became vogue; made famous by Henry Ford’s T-Model. Worldwide literacy, beginning with elementary schools, began to surge during this period, creating skills and competencies to fulfil long-term industrial and societal needs.

According to Rifkin (2011), the Third Industrial Revolution – also known as the Digital Revolution or Industry 3.0 – began in the 1980s and was marked by a steady migration from analogue to digital devices. Through the Internet, real-time multimedia interactions became possible for the first-time in history. Economies began the journey towards virtualization and international outsourcing. A high-tech job was increasingly typified by sedentary inputs on a computer screen – often half the world away from where the actual product or service was being developed or offered.

Throughout these epochs, governments had to continually tailor policies, laws and regulations to satisfy the imperatives of each new industrial paradigm. Children could no longer work in coal mines and factories, and factories were later mandated to dispose toxic effluences and by-products in a regulated manner. Environmental consciousness, sustainability and green technology soon became the global ideal du jour.

Rising complexities and uncertainties have however grown in tandem with ephemeralization (Fuller, 1938) forces unleashed by successive industrial revolutions. Ephemeralization describes the technological momentum where improving efficiencies to achieve greater outputs (i.e. products and services) progressively require fewer inputs (i.e. effort, time and resources). Moore's Law, which foresaw the number of transistors per square inch doubling every 18 months, epitomized both the ephemeralization process and the Digital Revolution.

Ephemeralization also initiated a race between the rapidly increasing severity and complexity of problems in a system and the improving but nonetheless uncertain ability to anticipate, proactively solve, and constructively respond to these problems (Homer-Dixon, T.; Walker, B.; Biggs, R.; Crépin, A.S.; Folke, C.; Lambin, E.F.; Peterson, G.D.;. Rockström, J.; Scheffer, M.; Steffen, W.; & Troell, M., 2015; p1). As systems got more connected and efficient, they became more entropy-prone and less predictable (Fuller, 1957; Heylighen, 2002).

A new industrial paradigm is therefore needed to handle complexities and uncertainties as they emerge in real-time – alongside Just-in-Time (JIT) production processes. Furthermore, twentieth century methods of running businesses and factories may no longer provide sufficient returns on investments (ROIs).

Since Industry 4.0 heralds greater efficiency, lower costs and superior products across entire value-chains, rapidly-transforming countries like Malaysia may see i4.0 as a fast-track avenue into the Developed Nations league.

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