Finding our niche in the global market

Finding our niche in the global market

Innovation is the key to a prosperous future. It has become the clarion call of the 21st century—and this being Malaysia’s Year of Creativity and Innovation, let’s hope we make great progress in this area. But the reality is whether we gain momentum depends on the kind of action we take.

Moving ahead as a country aiming for innovation-economy, high-income status, we should first have in a place a road map—a strategy in terms of innovation. Before that can happen, we must have a vision—for without vision, without strategy, we would be going about blindly.

Innovation may be industry-led but the public sector is needed to play its role effectively as partner to the private sector. For example, government agencies must understand the speed at which the private sector needs to move in order to remain in global competition.

And Malaysians simply must believe in innovation as the key to a prosperous future before we can make headway. We must embrace innovation as the tool that will propel us forward. We need to have a global perspective to help shape the way we do business in the international environment. We need innovation-savvy technopreneurs who understand how new technologies work and who view the global marketplace as one that is without borders.

Creativity is not about artistry alone but also about economics. As a country we need to understand the significance of people’s creativity for economic efficiency, competitiveness and development. Activities that stimulate one’s creativity and critical thinking offer prospects of new economic opportunities. They can release untapped potential for economic innovation and enterprise.

But before we can start talking about converting creativity into economic wealth, we must surely understand the fundamentals of innovation first in order to find our niche on the global stage.

For instance, we talk about becoming a hub for halal products but the truth is unless we move faster, we will get beaten by competition. It is a field where innovation comes into play: to be a hub for such products, we have to look into many aspects, such as packaging and marketing where innovation is called for. We have to be able to come up with products people would want to buy.

Designing a world car

Moving ahead, Malaysia needs to find a niche in the global market that will place it in a competitive position. The country has already built itself up as a trading nation—it is among the world’s top 20 trading nations. What we need to focus on is tapping the natural resources that are readily available and taking advantage of the many trade partnerships that are already in place.

It would, for instance, be only natural if Malaysia became a car manufacturer for the world. We could design a world car and make it the best in its category. But getting there requires innovation and creative excellence. There has to be a sharp focus on creativity before that can happen.

protonAre we well—positioned to be a world car manufacturer? The country is rich in natural resources such as rubber, tin, timber, copper, iron ore and petroleum—and we have the knowhow. Cars have been assembled in this country for many years—we understand the ins and outs of the auto market. Malaysia was among the first in the region that sought competitive advantage through manufacturing, and today the manufacturing sector is dominated by large multinational corporations, with a heavy Japanese presence, so there has been much transfer of technology taking place over the decades.

But countries such as Japan are way ahead of us in car manufacturing, so it wouldn’t make sense to compete with them. The way forward would be to look for a niche market. Malaysia could focus on emerging markets for new opportunities. We could cater to lower-cost markets where the demand is for basic cars that combine comfort with safety at a fraction of today’s prices.

It is said that China and India would lead in this regard as these countries have the most number of people who are skilled in producing such cars, but what’s to stop a country that is ambitious and bold enough to step out to get a lion’s share of the market?

Tapping the halal market

Malaysia is already well-positioned to surge ahead—there are many markets to tap, from APEC, the premier Asia-Pacific economic forum consisting of 21 members, to ASEAN, a smaller grouping of trading countries but a formidable one, no less. There are also the partnerships we have with the Organisation of Islamic Conference or OIC, the Commonwealth, and the Global Smart Partnership we first forged with African countries in 1997.

The possibilities are immense where our link to OIC is concerned. Islam is the world’s fastest growing religion and being a Muslim nation, Malaysia can surely look forward to taking a lead in pioneering ways and methods to upgrade standards in trade and industry.

Last November, Malaysia and Turkey agreed to join forces to develop uniform halal global standards, a move that should pave the way for OIC countries to tap the growing halal market which is currently dominated by non-Muslim countries. How is it that non-Muslim countries are ahead of us here? How is it that they export more halal products than Muslim countries?

Malaysia’s investments in OIC are mainly in the plantation sector, oil and gas-related industries as well as in construction. Between January and August last year, trade with the OIC amounted to RM64 billion with exports valued at RM38 billion and imports at RM25 billion. But so many areas are yet to be explored, halal food being one of them.

Halal foods account for 17% of the global food market and the global halal food market is expected to increase to US$642 billion by this year. Malaysian exports of halal food products to the OIC countries, which increased significantly to about US$640 million in 2007, is projected to reach US$900 million by this year.

But the global halal industry does not only mean halal foods; it includes cosmetics, logistics as well as Islamic banking and financial services. Many opportunities remain untapped. Just think: if we could have as little as 5% of the halal market—translating to US$32 billion—that would increase our GDP significantly.

But again, to achieve our goals towards this end, we need innovation.

Vast opportunities in ASEAN

ASEAN logoASEAN is a vibrant market with a population of 587 million and a combined gross domestic product of over US1.4 trillion. It is another front offering abundant opportunities; another illustration of how regional cooperation is a prerequisite for the development of markets.

As our Prime Minister Dato’ Seri Najib Tun Razak has pointed out, ASEAN remains the most concrete manifestation in our part of the world of what regional cooperation can achieve. Malaysia’s trade with ASEAN countries amounted to RM297.6 billion in 2008, with exports standing at RM171.2 billion and imports, RM126.4 billion.

ASEAN has concluded FTAs with China, South Korea, Japan, India, Australia and New Zealand, and this year as AFTA comes into play, tariffs will no longer be an issue. By 2015, the ASEAN Economic Community will be established, allowing for the free flow of goods, services and investment.

Forward-looking businesses would want to look upon all these as opportunities to be welcome instead of challenges that are insurmountable. A positive way of looking at it is that exporters will have improved access to the markets of our FTA partners, and local producers will find that their lower cost structure makes them more competitive in the international market.

Commonwealth, Smart Partnership links

The Global Smart Partnership International Dialogue in Langkawi which Malaysia initiated in 1997 has helped African countries embrace a new era of economic growth and development. A number of smart partnerships since then have paved the way for closer ties between Malaysia and Africa, helping to build Africa-Asia business linkages that are mutually benefitting.

Yet another market we can focus on is the Commonwealth, a family of 53 countries from all major continents, including the UK, Canada, Australia, New Zealand and Singapore.

The Commonwealth has a quarter of the world’s countries, a third of its population, a fifth of its trade, and a billion young people.

If we were to look at exporting education to some of these countries, for instance, we would see that it is a huge market—and the sky’s the limit. After all, out of one billion illiterate in the world, some 330 million are found in the Commonwealth!

We need to open people’s eyes to the relevance of education that is focused on creativity and innovation. Most governments of the Commonwealth adopted the British system of education wholesale because the methodologies were already in place. They may have worked in the old days but in the new global environment, these systems are irrelevant. The one-size-fits-all solution that worked in the past does not address the differing socio-economic development stages of the countries.

The world has changed and is constantly evolving, but the education system in place in many of these countries has remained unchanged. Surely an out-of-date system is unable to yield the kind of results needed in today’s high-tech environment.

Well-positioned to export education

Limkokwing University, as you may well know, has already made inroads into Africa and Britain.

In Africa, the university is working with various governments to liberate the vast store of African talent. We have been putting into practice the Smart Partnership principles adopted at the Langkawi International Dialogue and the spin-off Southern Africa International Dialogue—and we are already seeing positive results in the number of graduates the university produces.

Clearly many countries are interested in what Malaysia has to offer in terms of education. The Limkokwing website receives more than one million visitors a year—reflecting the amount of interest the university generates because of the work we have done in terms of creativity and innovation.

As a country we should take advantage of the fact that we are a good role model for developing nations. We should also take advantage of the fact that in the global environment, an education with a western bias is no longer sufficient. With powerful economies rising in the east, a strictly western-centric education is no longer enough even for those living in the west.

We only need to seriously embrace innovation in packaging ourselves better so that these countries can see how we provide a brand of education relevant to the 21st century.

Again, it all begins with innovation. If we lack this, if we are not focused on this, we will never get there.

tansri photo

About Tan Sri Lim

Tan Sri Dato’ Sri Paduka Dr Lim Kok Wing, the Founder and President of Limkokwing University of Creative Technology, does not fit into any ordinary mould that would describe most entrepreneurs.

His journey has been closely linked with the economic and social development of Malaysia.

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