KUALA LUMPUR, Malaysia � Malaysia needs to focus on increasing investments in the Electrical and Electronics (E&E) industry to transform into a high-income economy under the Industry 4.0 revolution.

SME Association Malaysia National Deputy President, Ong Chee Tat said small and medium enterprises (SMEs) in the country had a lot of catching up to do, to be on par with the bigger players, as well as be atop the latest trends in automation and technologies.

He said in terms of the Industry 4.0 revolution, local SMEs do not have the economies of scale compared to other countries, and are thus, unable to get a faster return on their investments.

The big boys can spend first and earn later.But, the smaller players, can only spend what they earn. It is a matter of capital investment, he told Bernama.

Ong said the association had put forth suggestions to the government on the funds needed to spur SMEs to advance into the Industry 4.0.

He said local SME’s need to change their mindset, from one of reliance on foreign labour, to automating their businesses processes via the adoption of technologies such as robotics, the Internet of Things, cloud computing and artificial intelligence.

This requires upskilling the workforce and talent, he added.

Citing the Original Equipment Manufacturers (OEM) in Penang and other industrial zones as an example, Ong said the companies producing for big global factories were well into Industry 4.0.

We are encouraging SMEs not to become OEMs, but to produce their own brands and export it to the world, he said.

He said game-changing innovations had caused a paradigm shift in the E&E industry, and SMEs, especially the smaller players, required financial assistance to be able to advance in Industry 4.0.

According to earlier reports, Khazanah Nasional Bhd subsidiary, Malaysian Technology Development Corporation, plans to approve RM170 million in loans to technology-based firms this year.

Globally, Industry 4.0 has spurred demands for energy efficient products, such as LED lamps and energy-efficient refrigerators, air-conditioners and other electrical gadgets, while stimulating interest among industry players in the E&E sector.

On the local front, leading multinational E&E company, Infineon Technologies Malaysia, recently announced the opening of a new building at the Batu Berendam Free Trade Zone to support Industry 4.0 operations.

The new building is designed to Industry 4.0 standards, incorporating automation, the Internet of Things and cyber-physical systems.