Challenges await SMEs in shifting focus to IR 4.0
20 Feb 2023
While small and medium enterprises (SMEs) will play a key role in transitioning corporate Malaysia’s adoption to the Fourth Industrial Revolution (IR 4.0), there are hurdles which need to be ironed out to achieve this goal.
RS Malaysia country general manager Sean Er Lim told StarBiz that as SMEs are the backbone of the economy, they play an important role in the country’s transition to IR 4.0.
However, she said many challenges must first be addressed for SMEs to reap their full potential.
RS is a Malaysia-based subsidiary of one of the largest UK’s FTSE 100 Index companies.
Lim said there needs to be more awareness when it comes to IR 4.0 among Malaysian SMEs.
“Common reasons like financial constraints and a fear of change are some of the causes. More pressing issues such as the lack of funding and lack of understanding of the benefits of this technology needs to be addressed by the government.
“To be fair, the country has already started addressing them, for example, through the MyDIGITAL initiative that aims to transform Malaysia into a high-income digitally-driven regional leader in the digital economy,” she said.
RS Malaysia is a subsidiary of UK-based RS Group, a global omnichannel provider of product and service solutions for designers, builders and maintainers of industrial equipment and operations.
The group stocks about 700,000 industrial and electronic products sourced from over 2,500 leading suppliers, and provides a wide range of product and service solutions to over 1.2 million industrial customers.
IR 4.0 refers to the “smart” and connected production systems that are designed to sense, predict and interact with the physical world to facilitate decisions that support production in real-time.
Lim said, thankfully, there are currently a few affordable options available for SMEs to leverage in their IR 4.0 transformation journey.
For example, she said SMEs could leverage e-payment where most banks provide zero-transaction cost online, replacing cheque payment.
SMEs could also partner with strategic suppliers who provide a one-stop solution and digital platform with zero cost.
Additionally, she said engaging with suppliers who provide expertise and consultancy along with components and spare parts would be beneficial for SMEs to leverage in their journey.
She said Malaysia is in the early stages of transitioning to IR 4.0, and has been actively working on implementing the right policies by investing in research and development, providing funding for startups and SMEs, and collaborating with international organisations on digital transformation to reach its goals.
“However, the country faces many challenges in its transformation journey, from the lack of talent and necessary skills in areas such as artificial intelligence (AI), Internet of Things (IoT), robotics, cybersecurity and standardisation, to high cost of IR 4.0 technologies adoption and insufficient funding,” Lim said.
Commenting on the future of IR 4.0 and how it would impact the economy, its growth trajectory and competitiveness, she said the adoption of advanced IR 4.0 technologies such as cloud computing, AI and 5G would lead to an increase in productivity and efficiency for various sectors from manufacturing to services.
This would drive economic growth and competitiveness via cost reduction and the improvement in the quality of products and services, which would significantly boost Malaysia’s economy and help it stay relevant as well as compete against its regional peers, she noted.
“To fully realise this potential, the government will need to continue and step up its investments in infrastructure (Internet, advanced facilities, etc), the training of skilled workers and creating incentives to encourage local businesses such as SMEs to shift their focus towards IR 4.0.
“Partnerships and agreements with technologically advanced countries are also needed to facilitate technology transfers and skillsets to enable IR 4.0 transformation,” Lim added.
As to the impact of the technology on the environment and sustainability, she said, historically, technological innovations and breakthroughs have led to a more efficient and sustainable way of doing things.
She said IR 4.0 and its related technologies – IoT, 5G, etc – would enable companies to achieve their sustainability goals via the optimisation of industrial and business processes.
This would greatly increase efficiency, leading to lower emissions and more sustainable use of resources which reduces waste, she noted.
“That being said, IR 4.0 has its downsides. The increased demand for IR 4.0-related technologies (semiconductors, computers, etc) has ramped-up demand and production for greenhouse gasses and e-waste.
“Manufacturing these devices leads to greenhouse gasses and an increase in e-waste.
“Therefore, it is prudent for companies to implement and integrate sustainable practices,” she added.
Source: The Star