Introduction

The establishment of this framework and guideline is to provide the basis for decision making in identifying the ICP activities to be implemented. This framework would also assist TDA in understanding the national direction and strategic action plans in developing the country through the development of economy, industry and technology. Furthermore, it will ensure alignment of ICP activities to the national development agenda.

This framework will guide TDA in determining industry gaps in the industry value chain by understanding the landscape and ecosystem of each industry. ICP may provide the platform and act as enabler to address the gaps. However, there are limitations and not all gaps could be addresses through leveraging ICP. The expected outcome of ICP is to add value to the government procurements by creating net returns to the investment of federal funds.

Objectives

The objectives of IIDF are as follows:

  1. To define TDA Focus and priority area (in the value chain).
  2. To avoid overlapping and redundancy of role and function of lead agencies.
  3. To avoid overlapping and redundancy of industry development to certain focus areas.
  4. Justification of the importance and significance of the project to the whole value chain.
  5. Source of reference for industry development
Principle
The principle of IIDF development is to enable GOM to obtain ‘value added’ from all ICP programme. ICP in Malaysia will generally be implemented based on the following principles:

1.  Alignment to National Direction ICP activities should be in line with the national direction. This is important to support the aspiration and ambition of the country that have been outlined by the GOM in various policies, strategic roadmaps and blueprints.  

2. Understanding OEMs Capacity and Capabilities It is important to understand the capacity and capabilities of the OEMs, suppliers or ICP providers to ensure the successful implementation of the ICP towards achieving the ICP objectives.  

3. Mutually beneficial for all stakeholders ICP activities must bring mutual benefits to all stakeholders involved throughout ICP development and implementation.  

4. Reduction of foreign dependency The ultimate goal of ICP activities is to reduce dependency on foreign contents and increase the local contents through localisation activities, which will reduce the outflow of national capital to the foreign countries.  

5. Human capital development One of the objectives of ICP activities is to develop human capital capabilities to create high skilled personnel/ workforce in the area of technology, MRO and manufacturing. Therefore, ICP activities should aim at reducing and closing the local industry gaps, where possible.  

6. Sustainability The ICP activities shall be sustainable for long term. On the other hand, stakeholders should continue to support ICP recipients to further grow and participate in the global supply chain.  

7. Investment Stakeholders need to view ICP as an investment for the growth of local companies, industry and the country
  • ICP Industrial Development Framework

The IIDF is divided into 4 quadrants as shown in Figure 1. Each section has its own criteria and considerations to ensure that the assessment and the evaluation follows the philosophy that has been set in each quadrant. These quadrants are:

  1. First Quadrant – National Direction & OEM Interest
  2. Second Quadrant – Value Chain Focus Area]
  3. Third Quadrant – ICP Programs/ Projects
  4. Fourth Quadrant – Impact Assessment
Figure 1. ICP Industrial Development Framework

Each of these quadrants has its own objectives that will determine the impact of the project proposed by the applicant. After the impact assessment has been measured in quadrant 4, the outcome and results achieved will serve as an input to re-measure the gaps and/or future ICP Programme, if any.

1. First Quadrant – National Direction and OEM Interest   In this quadrant, consideration shall be made based on national directions that have been outlined in documents such as Policy, Strategic Action Plans, Blueprints, Roadmap and other national documents by the ministries and/or its implementing agencies.   In addition to the direction of the government, the evaluation will also consider capacities and capabilities of OEM companies and their interest to ensure mutual benefits and win-win situation for both parties. Mutually beneficial ICP programme and projects will ease the negotiation with OEMs.  

2. Second Quadrant – Value Chain Focus Area   In quadrant 2, the value chain need to be mapped out and established to ascertain the needs of the respective industry. The industry needs shall be based on the industry gaps, issues and challenges of the sector. These will help to identify the problem statements and the potential ICP programme or projects to be proposed. The sector focus on the respective value chain encompasses:

a) Resource Sector: Quarry, Mining, Agriculture, Forestry and Fishery
b) Primary Sector: Energy, Oil & Gas and others.
c) Secondary Sector: Manufacturing, Construction, Utilities and others.
d) Service/After Sales Sector: MRO, Refurbishment, Sales, Customer Service, Information Technology and others
e) Supporting Sector: Logistic, Education, R&D and others  

TDA may engage the relevant industry players or leaders to identify current gaps and determine the needs and requirements of particular industry landscape in Malaysia.      

3. Third Quadrant – ICP Program/ Project
In this quadrant, based on the identified gaps and needs of the industry, all ICP projects will be defined and proposed based on (not limited to only) the six (6) ICP objectives.
a) Transfer of Technology
b) Localisation 
c) Market Access
d) Investment
e) Human Capital Development
f) R&D&C

4. Fourth Quadrant – Impact Assessment
In this last quadrant, all ICP activities that have been completed shall be assessed for its impacts on three attributes, namely;
a) Gross Domestic Product (GDP),
b) Technology Development, and
c) Industry Development.

The importance of these assessment is to understand the impact and future action and activities to be carried out for continuous improvement. Methodology and assessment tools for measuring the impacts have been developed to assist TDA in measuring these impacts to the country.

Conclusion

All ICP activities should be measured and able to be quantified through ICP Impact Assessment based on economy, technology and industry development. The result of impact assessment would be useful for the sustainability of the businesses and future planning for ICP activities.

In conclusion, by having this framework and guideline as our guidance in developing our industry players and ecosystem, we are expecting more impactful program/project to be established in the future. This effort is really needed to help us achieve the goals of the ICP and meet the government’s aspirations for advancing the technology, industry and the country.

Prepared by, Industry Intelligence Department