Our country, Malaysia has grown in leaps and bounds moving up the economic ladder and value chain to be recognised as a country that is sought after from an investment and talent standpoint.
“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.”
This quote by physicist William Pollard (1911 – 1989) pretty much sums up the predicament the country is in today.
Starting our journey as a commodity-based economy, coupled with being a manufacturing hub or a part of the supply chain of many multinational companies in the last three decades, have been our success mantra.
However, with Vision 2020 barely four years away, the market dynamics have shifted and today we look beyond being a commodity-based or even a manufacturing hub that no longer serves our purpose for posterity.
Commodity is finite. China is now recognized as the manufacturing backyard to the world due to cheap labour and lower cost of production. This is our reality.
For one, according to our Statistics Department, in 2015 alone our total exports accounted to RM 779.95 billion, registering a slight increase over 2014. However, in 2015, our GDP growth dipped to 5 per cent from 6 per cent the year before.
What does this mean to our economy? And where does that leave Malaysia then?
While exports still hold the key to our country’s economic wellbeing, the composition of it has to keep up with changing times.
Looking at how the economics of production and distribution shift, along with consumers’ behavior and the birth of smart products, manufacturers turn to innovative ways of creating and captivating value.
From Original Equipment Manufacturers (OEMs) that form part of the supply chain of large companies, where they supply parts to these large companies; companies then move to become Original Design Manufacturers (ODMs) where they design and at times, produce products for other companies; and lastly Original Brand Manufacturers (OBMs) are those who manufacture their own brand products.
This has basically been the path that many manufacturing companies have taken, moving from the OEM, ODM to the OBM opportunity.
Quoting the late Steve Jobs, “Innovation distinguishes between a leader and a follower.”
As we progressed from the OEM to the ODM and OBM stages, value-adding our products and even creating our own brands should be the way forward. With our very own Malaysian-made brands, we should capitalise on the opportunity of exporting these homegrown brands.
Designing and branding are vital components that can help companies propel to a whole new level, in addition to opening up new markets.
In line with the adoption of Blue Ocean Strategy by the government, this has been the mandate of the Malaysia Design Council or MRM ( www.mrm.gov.my) to assist companies “to produce Malaysian-made and innovative designed products that can compete at an international level,” and the council has been doing that in its signature program known as Malaysia Good Design Mark.
These efforts could expand the Gross Domestic Product (GDP) in the services and manufacturing sector in the area of design and branding. We need to take stock and be more confident producing and promoting Malaysian-designed and Malaysian-made products.
To pursue this, the Ministry, MRM, and its many agencies have been encouraging, promoting and enabling companies to head in this direction. For instance, companies that provide industrial design services are eligible to apply for a 70% tax exemption on their statutory income for a period of five years. To enjoy this, companies are required to register with MRM for evaluation. MRM will grant successful companies with a certification to support their application to the Malaysian Investment Development Authority (MIDA).
Having identified the competitive advantage that design and branding can bring to products, we cannot emphasise enough on the need for companies to embrace this as a mean to further their market reach in the highly competitive global marketplace.
Creativity and innovation are the way forward. Look at Indonesia for instance – in 2008 alone, the creative industry has contributed 7 per cent to its GDP, amounting to US$ 8.7 billion with 4.5 million workers, covering 1.5 million companies.
Such is the potential of the creative industry to the overall economy of Indonesia. The same can be emulated in our country too.
Another point of contention that we have is the perception of Malaysians and international brands.
We tend to favour foreign designs, designers and brands over than local ones. But we have also seen success and staunch following in some of our local brands. Look at our very own Malaysian designers Jimmy Choo and Zang Toi – they made it big overseas before being embraced at home. We can only be optimistic about our creative industry.
The Ministry believes it is time we give emphasis on design. Many of us do not realise that every day we are surrounded with material things, items and activities that incorporate design.
Our industries have to shift their focus on the downstream activities that provide a market appeal, value-added products or services. This is where design and branding play an important role, as it provides consumers a preferred choice in a competitive market place.
So taking a page from Steve Job’s philosophy, let us all be leaders than followers by differentiating ourselves with design and branding.