Page 43 - ASEAN-EU Dialogue 2018: Regional and Inter-Regional Economic Cooperation: Identifying Priorities for ASEAN and the EU

industries, chemicals industries are the main player. This is followed by motor vehicles, trailers
and parts industries.

Table 7.4: Share of Malaysia’s HT and MHT Sub-Sectors in Manufacturing Value Added
(%), 2008-2016

2008 2009 2010 2011 2012 2013 2014 2015 2016
All manufacturing industries 56,689 48,138 59,760 69,492 72,749 73,859 77,422 67,539 65,173
($USD million)
Overall HT (%) 18.0 14.7 15.3 15.8 17.5 20.2 20.3 20.3 21.0
- Semiconductor 9.0 8.2 9.4 9.6 10.7 13.1 13.2 13.0 13.6
- Computers & office machinery 5.3 3.4 2.9 3.2 3.7 3.8 3.5 3.4 3.3
- Communications 1.7 1.1 1.0 1.0 1.1 1.1 1.3 1.2 1.3
- Testing, measuring & control instru. 1.0 1.0 0.9 0.8 0.8 0.8 0.7 0.8 0.9
- Aircraft and spacecraft 0.6 0.5 0.7 0.8 0.9 1.0 1.1 1.3 1.3
- Pharmaceuticals 0.4 0.4 0.5 0.4 0.4 0.4 0.4 0.5 0.6
Overall MHT (%) 17.3 16.9 17.9 16.7 17.3 16.2 15.8 17.4 17.4
- Chemicals (excl. pharmaceuticals) 9.3 9.2 9.8 8.9 9.0 8.4 8.1 8.3 8.2
- Motor vehicles, trailers & parts 2.8 3.0 3.4 3.3 3.5 3.4 3.4 4.1 4.0
- Machinery & equipment 2.6 2.6 2.6 2.4 2.4 2.3 2.2 2.6 2.6
- Electrical machinery 2.4 2.1 2.0 2.0 2.1 2.0 2.0 2.2 2.3
- Railroad & other transportation equip. 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2
Source: Data extracted from Science and Engineering Indicators 2018 (National Science Board, 2018)

Towards Industry 4.0: Issues and Challenges
Similar to other countries, Malaysia is currently facing the emerging exponential change driven
by technology and innovation. Industry 4.0, which is based on cyber-physical production
system and distributed mode of manufacturing, is one of the challenges that requires an
immediate and serious attention by policymakers. However, before Malaysia is ready to
venture into Industry 4.0, it is important for us to recognise the following limitations in our STI
ecosystem:

a) Governance and Institutions – As a whole, Malaysia’s STI governance is featured by a
multiplicity of advisory committees and councils as well as ministries and agencies
engaged in STI policy making, funding and implementation (OECD, 2016). However,
such complicated framework has resulted in the risk of redundancy of work among the
various entities. During the launching ceremony of the Science Outlook 2017 on 3 April
2018, the ASM indicates that there are about 157 agencies, statutory bodies or
institutions; 46 national policies; 27 councils related to STI development in the country.
Although the National Science Council (NSC) has been established in 2016 to provide
better co-ordination of STI development, it is still too early for us to foresee the impact
of NSC.

b) Education and Skilled Workforce – The number of STEM graduates is relatively low in
comparison to non-STEM graduates and it is far from the target of 60%. This might be
due to the unattractive career path in STEM disciplines. In addition, the quality of
students is considered low compared to neighbouring countries in the region as
reflected in both the PISA and TIMMS studies. There is similar issue for the TVET
th
programmes. The 10 MP reports that generally only 10% of Malaysian students enrol
in upper secondary level technical and vocation education whereas the average
enrolment rate for OECD nations is 44% (EPU, 2010). From the supply side, this

37