How universities should prepare for Industry 4.0

Prof Mahendhiran

As early as 2020, 22% of Malaysia’s 3D jobs (dirty, dangerous, and difficult) could be automated.

Industry 4.0, called the fourth industrial revolution, will see the increase of intelligent systems and robotics that can work longer hours than the humans they replace. Yet the challenge for Malaysia is not lack of jobs but lack of skills needed in jobs of the future. Thus, universities will play an important role in nurturing high-skill talent the country needs for sustainable economic growth.

Professor Mahendhiran, Vice President of Research & Development at Monash University Malaysia and CEO of Monash Malaysia R&D Sdn Bhd, shared the following insights in his keynote presentation at FAA’s Institute of Higher Learning Forum held in Kuala Lumpur.

How Industry 4.0 will shape economies

Industry 4.0 was originally a term used in the context of Germany’s manufacturing field. Today, it describes the current trend of automation and data exchange in manufacturing technologies and is powering developments in other sectors of the economy and society.

What makes it distinct from the third industrial revolution is 4.0’s “cyber-physical systems” and integrated networks. Cyber-physical systems (CPS) are controlled by algorithms, networked with the Internet, and in turn control physical operations. An example of CPS is an autopilot system which controls an aircraft; which  assists the human pilot, who can then focus on other operations.

A concern surrounding Industry 4.0 is that humans will lose their jobs to automation – and not only in the manufacturing sector. For instance, said Prof Mahendhiran, “We may no longer need managers who sign off on everything which can be done by rules and algorithms. Fintech, legal, agriculture – all sectors are touched by this new revolution. Routine jobs will be replaced by intelligent systems”

In the new revolution, thriving economies will be driven by information, ideas, and innovation. Much of the innovative endeavours will be enabled by cyber-physical systems. In contrast, traditional economies which depend merely on land, labour, and capital will suffer loss of jobs and competitiveness if they do not adapt to the changing global economic landscape.

Therefore, countries who wish to adapt should develop a “dynamic national innovation ecosystem” with “7i” elements:

  • Infrastructure and Infostructure to connect with the global economy.
  • Intellectual capital development –continuous knowledge creation and knowledge transfer.
  • Interaction – developing smart partnerships that create value to organisation and others in the ecosystem.
  • Incentives, both fiscal and non-fiscal incentives that foster innovation.
  • Institutions that promote a knowledge culture and adherence to global best practices.
  • Integrity in managing  resources for the benefit of all stakeholders in the economy.

Countries and organisations with a highly developed blueprints of the national innovation ecosystem (7i elements) are able to adjust to changes in the global economy. In fact, some of these organisations and countries are initiating rapid changes and becoming global pacesetters.

The role of universities in the new economy

Universities, too, need to adjust to global changes by “updating their programs to ensure that next-generation talent meets the needs of firms of the future.”

Prof Mahendhiran observed that in many pacesetting countries, it is universities who are a key driver of development. These universities drive development by partnering with industry and other stakeholders in the country.

"Universities are not only suppliers of talent for the workforce but are at the forefront of solving problems for industry and the community,” he stressed. A university must become a ‘one-stop’ knowledge centre for firms, industry associations, government agencies, and community organisations.

“Perhaps this is what educational institutions should be nurturing amongst future graduates. Give them the context, expose them to the tools of enquiry that enable them to solve problems and create new systems to improve socioeconomic well-being of people around the globe.”

What skills can universities nurture to prepare graduates for the new economy? Prof Mahendhiran described the creative worker as having these 10 skills:

  • Critical thinking – to challenge the norm, find alternative ways of doing things, and work under constraints that lead to more efficient solutions.
  • Sound ICT literacy – not only to use ICT systems but also analyse the strengths and weaknesses of existing systems.
  • Good Technical skills – to operate across multiple systems and diverse industrial sectors.
  • Communication skills – to articulate creative ideas clearly and persuasively.
  • Sound Multidisciplinary/interdisciplinary knowledge – to have depth within a discipline and also breadth of knowledge in other disciplines.
  • Learnability – ability to pick up new skills quickly.
  • Strong power of association – to combine different ideas and create value through innovation (recombinant innovation).
  • Opportunities for experimentation – try different things and troubleshoot current practices (fostering a culture of risk-taking).
  • Fostering problem-solving and observation skills.
  • Leadership skills – to be a dynamic leader who is a “purpose maximiser”, not a “profit maximiser”.

The role of universities is not merely to usher graduates into current jobs but to develop employees of the future, and enable some of them to power the next generation industries.

Prof Mahendhiran cited examples of job areas that may grow in demand: market analytics, AI design, IoT engineering, game and app development, robotics and drones, environmental science, and precision farming.

“We may not have control over the technology revolution,” he said, “So we should focus on . . . what we can do to support students and professionals alike by nurturing, upskilling, and preparing them to be more agile in the changing economic landscape.”

Professor Mahendhiran Nair is CEO of Monash Malaysia R&D Sdn Bhd and Vice President (Research & Development) at Monash University Malaysia. He is also a Professor of Econometrics & Business Statistics in the School of Business, Monash University Malaysia.

FAA (Finance Accreditation Agency) is an independent body supported by Bank Negara Malaysia and the Securities Commission Malaysia. Its aim is to create highly skilled and internationally mobile professionals in the financial services industry.