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The driving force behind Malaysia’s 4IR initiative


ECONOMIES worldwide are viewing Artificial Intelligence (AI) as a catalyst for Industry 4.0 (4IR), and with good reason. From facial recognition to natural language processing, AI technologies have become increasingly commonplace, galvanising global economies and even businesses as they seek to improve customer experience, increase sales or gain predictive insights.

According to a recent McKinsey report, AI will bring additional economic output of around US$13 trillion (RM54.4 trillion) by 2030 and boost global gross domestic product by about 1.2 per cent each year.

The allocation of RM3 billion for Malaysia’s Industry Digitalisation Transformation Fund at the recent 2019 Budget points to the government’s commitment to leverage digital technologies such as AI to transform the economy and to accelerate the shift towards 4IR.

As Malaysia transitions to a digital and data-driven economy, we expect to see a greater level of AI adoption next year, especially in the development of smart cities, as well as retail and MICE (meetings, incentives, conferences and exhibitions) industries. In fact, according to a study by IDC (International Data Corporation), 34 per cent of organisations in Malaysia have plans to adopt AI within the next two years, the second highest rate among Asia Pacific countries.

Malaysia’s AI focus stems in part from the various smart city initiatives and public safety applications rolled out across the country.

In 2016 for example, the Selangor government launched a blueprint to develop Selangor into a Smart State by 2025. The advancement of AI, big data, and Internet of Things (IoT), combined with the Smart Cities Initiative laid out under the 11th Malaysia Plan, signals that smart cities are set to become a reality in the near future.

Any smart city initiative should serve to improve the lives of its citizens; AI can play a vital role in strengthening public safety and law enforcement efforts in cities and communities.

In April, the Auxiliary Force Sdn Bhd (AFSB) became the first security force in Malaysia to integrate body-worn cameras with cutting-edge facial recognition technology. The cameras enabled officers to review captured video footage to positively identify persons of interest post-event. With auxiliary officers better able to safeguard the community, infrastructure and assets, citizens feel safer as they go about their daily lives.

The MICE industry is another area set to benefit from AI. In 2016, Malaysia’s MICE industry attracted 111,298 delegates to 153 events and generated RM1.035 billion in revenue. By 2020, business tourism is forecast to contribute triple that amount, boosting Malaysia’s gross national income by RM3.9 billion while generating 16,700 jobs.

AI can play a key role in transforming MICE operations by improving productivity and cost-effectiveness while offering delegates a unique conference experience. One such example is the inaugural Digital China Summit held in Fuzhou, China. Delegates were able to conveniently check in to their hotel with facial recognition self-check-in systems and afterwards, skip the hassle of queuing for registration with automated AI-powered gantry systems. With a simple scan of their faces, delegates could proceed straight to the conference halls and be guided by an AI concierge to the specific venue they were supposed to be at.

Retailers are also embracing AI as a powerful tool to engage shoppers and empower store assistants. Deployed within a store, AI can help personalise purchasing recommendations for customers whilst helping store assistants to understand the profile of their customers and anticipate shopping needs. For instance, retailers can leverage facial recognition technology and data analytics to better serve customers who opt in to such a loyalty programme.

The same IDC study found that more than 32 per cent of companies in Malaysia are already prioritising speech and image recognition interfaces to improve customer experience and enhance omni-channel know-your-customer solutions. This is poised to grow further as retailers realise AI’s immense potential in enhancing customer service.

When a customer enters a store, the store assistant can instantly identify the customer and pull up details on her purchase history and style preferences. Armed with this information, the store assistant is then able to recommend items most relevant to the customer and anticipate any requests, such as getting the customer a dress in her size. Beyond creating a more delightful shopping experience, AI can help transform customers into brand loyalists or even brand advocates by enabling retailers to go the extra mile for their customers.

While AI technologies have numerous positive societal and economic benefits, it is also important to recognise the challenges they may bring when it comes to privacy and data security. As conversations around privacy and data security move to the fore, winning the public’s trust in AI technologies will become paramount if AI is to progress and continue transforming industries and societies.

To that end, all players within the AI industry need to come together to build a trusted AI ecosystem via open, transparent discussions. Instilling trust will also require collaboration between industry, government and academia to develop and deploy AI technologies in a responsible manner.

More broadly, the AI ecosystem will need to focus efforts on educating the public about the benefits and challenges of various AI technologies. Expanding public outreach and education could help inform the public on the various use cases and how AI technologies can improve the way we live, work and play.

Harnessed in the right way, AI can create vast benefits for society and the economy. For Malaysia, AI could very well hold the key to the country’s Industry 4.0 future.