NIMP 2030 sets breakthrough agenda for manufacturing sector’s next take-off — SERC
01 Sep 2023
The New Industrial Master Plan (NIMP) 2030 has set the breakthrough agenda for the Malaysian manufacturing sector’s next take-off in the new green industrial age, said the think tank Socio-Economic Research Centre (SERC).
Its executive director, Lee Heng Guie, said the master plan has mapped out a comprehensive industrial direction, strategies, and enablers to position Malaysia for new growth catalytic sectors and industries in the decades ahead.
“It is a pivotal moment for Malaysia’s industrial development. Malaysia’s manufacturing sector has to accelerate IR 4.0, taking advantage of smart technologies to move its production base up the value chain while conforming to environmental, social, and governance (ESG) and meeting net zero.
“Amid increasing geo-economic complexity and the escalating impacts of climate change, Malaysia needs a new generation of sustainable industrial transformation to ever up the economy to sustain a resilent and competitive advantage internationally,” he told reporters after the launching of NIMP 2023 today.
Lee said domestic manufacturing industries must strengthen their resilience and competitiveness to counter operational challenges caused by geo-economic conflicts that disrupt supply chains, resource scarcity that threatens energy and utility security, and adverse climate change disruptions.
The NIMP 2030, launched by Prime Minister Datuk Seri Anwar Ibrahim, adopts a mission-based approach to drive the manufacturing transformation in four ways, namely, advancing economic complexity, tech-up for a digitally vibrant nation, pushing for net-zero carbon emission, and safeguarding economic security and inclusivity.
The high-impact sectors include electrical and electronics (E&E), chemical, electric vehicle, aerospace, and pharmaceutical.
Lee said domestic direct investment (DDI), especially by micro, small and medium entrepreneurs (MSMEs), is crucial for supporting the industrial ecosystem.
“The inclusion of DDI as a key performance indicator (KPI) is a positive step to facilitate and raise the quality of domestic investment. MSMEs should be provided with opportunities to gradually scale up their industries through horizontal and vertical integration as well as to embrace green practices.
“This necessitates capital investment in advancing technological and digitalisation capabilities, ensuring an ample supply of highly skilled and knowledge-based human capital, and more importantly, access to financing, grant and development funds,” he said.
Lee opined that introducing the NIMP Strategic Co-Investment Fund and NIMP Industrial Development Fund would support strategies, action plans, and missionbased projects as well as industries and businesses, especially MSMEs.
The government announced it would allocate RM8.2 billion to fund the NIMP 2030 action plans throughout its implementation period.
“We also support the implementation of the multi-tier levy model to reduce over-dependence on low-skilled foreign workers, but the levy must not be too steep during the transition period as it would be significantly burdening the employment and operating costs of MSMEs,” he said.
Ensuring the competitiveness of SMEs
Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said adopting a mission-based approach is essential for ensuring the competitiveness of our small and medium entrepreneurs (SMEs).
He said SMEs have yet to embrace the latest technologies, making it imperative for the government to support them through a mission-oriented strategy.
“This approach involves providing funds to facilitate the transformation of SMEs, allowing them to shift towards export-oriented operations — a goal we aspire to achieve. The crux lies in the notion that when guided by a mission and executed effectively, the allure of foreign direct investments strengthens.
This confidence, in turn, attracts foreign investors, and even domestic ones (DDI), provided they demonstrate promising outcomes. This interplay propels the integration of our industries into the global supply chain,” he said.
Soh said collaborative efforts between the private sector and the government are imperative, particularly in enhancing workforce capabilities in the knowledge-based economy.
Meanwhile, Khazanah Research Institute deputy director of research Yin Shao Loong said the NIMP 2030 is timely as much geopolitical movement is happening right now, especially in semiconductors and other areas.
So it is important for Malaysia to have a strategy going forward in terms of delivering the best kind of future for the country. And that is why having this kind of seven-year plan until 2030 is important because you need to do these big structural shifts.
“The biggest shift is that now we’re focusing on missions rather than trying to achieve sectoral targets. When we chose a thorough target, it didn’t always deliver strong results. When we look at overall economic complexity, then it’s a broader challenge, but then, in some ways, you can push it from many different avenues,” he said.
Yin added that the newly launched master plan would give a much clearer signal to investors about what Malaysia wants for the future.