Project Title

Seminar on Understanding the Impact of Smart Manufacturing in Policy and Regulatory Approaches 

Project Year

2017   

Project Number

CTI 28 2017 

Project Session

Session 2   

Project Type

Standard 

Project Status

Project in Implementation   
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Project No.

CTI 28 2017 

Project Title

Seminar on Understanding the Impact of Smart Manufacturing in Policy and Regulatory Approaches 

Project Status

Project in Implementation 

Publication (if any)

 

Fund Account

General Project Account 

Sub-fund

None 

Project Year

2017 

Project Session

Session 2 

APEC Funding

147,000 

Co-funding Amount

Total Project Value

147,000 

Sponsoring Forum

Market Access Group (MAG) 

Topics

Market Access 

Committee

Committee on Trade and Investment (CTI) 

Other Fora Involved

 

Other Non-APEC Stakeholders Involved

 

Proposing Economy(ies)

Malaysia 

Co-Sponsoring Economies

China; Japan; Singapore; Viet Nam 

Expected Start Date

01/08/2017 

Expected Completion Date

31/08/2018 

Project Proponent Name 1

Alia Md Saleh 

Job Title 1

Principal Assistant Director 

Organization 1

Ministry of International Trade and Industry (MITI) 

Postal Address 1

Level 10, MITI Tower, Jalan Sultan Haji Ahmad Shah, 50480, Kuala Lumpur, Malaysia 

Telephone 1

60-3 62000575 

Fax 1

Not Applicable 

Email 1

alia@miti.gov.my 

Project Proponent Name 2

Aedreena Reeza Alwi 

Job Title 2

Director, Sectoral Policy Division 

Organization 2

Ministry of International Trade and Industry (MITI) 

Postal Address 2

Level 10, MITI Tower, Jalan Sultan Haji Ahmad Shah, 50480, Kuala Lumpur, Malaysia 

Telephone 2

60-3 62000595 

Fax 2

Not Applicable 

Email 2

aedreena@miti.gov.my 

Declaration

Alia Md Saleh and Aedreena Reeza Alwi 

Project Summary

The Fourth Industrial Revolution and its impact have been discussed extensively in many forums globally, such as the World Economic Forum (WEF), World Bank (WB) and the Organisation for Economic Cooperation and Development (OECD). However, there has yet to be a robust discussion on the subject in APEC, although APEC has strongly led various initiatives that relate to digitalization such as e-commerce and Digital and Internet economy.  It is quite apparent that there is no initiative in APEC so far that directly looks at how technological changes are changing the manufacturing landscape across the region, including their spillover effects along the value chains.

In this regard, there is a need for economies to build an understanding on the concept of “Smart Manufacturing” in industries and its implication on both the public and private sectors. This proposal intends to focus on understanding its definition, applications, benefits and challenges, and most importantly, the impact on the value chain eco-systems. It is also crucial to examine the role of the Government in facilitating this extensive transformation. We propose to develop a baseline study of the topic and solicit inputs from various stakeholders from APEC economies through a seminar. Inputs will be collated to develop a best practices compendium on Smart Manufacturing advocacy and for APEC to develop a more concrete programme going forward.

Relevance

Globally, we stand on the brink of technological revolution that will essentially change all aspects of human life. Via digital revolution, which has begun since the middle of the last century, technology has helped the manufacturing sector. This cyber-physical system is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres. Rapid technological changes are now causing disruptions on a larger scale but its overall and the extensiveness of its impact particularly for its subset of Smart Manufacturing is relatively unknown. Various other international organisation have embarked on extensive discussion on this subject particularly the World Economic Forum (WEF), World Bank (WB) and the Organisation for Economic Cooperation and Development (OECD).

According to Price Waterhouse Coopers (PWC), Boston Consulting Group (BCG), among others, Smart Manufacturing is generally focused on end-to-end digitalization of the manufacturing sector based on the 9 pillars namely, Internet of Things (IoT), Big Data Analytics, Autonomous Robots, Augmented Reality, System Integration, Simulation, Cloud Computing, Cybersecurity and Additive Manufacturing (or 3D printing). Among APEC economies, there are clear leads such as the United States and Japan. Additionally, many APEC economies are embarking on individual national strategies in response to the impact of Smart Manufacturing such as China, Republic of Korea, Singapore and Viet Nam.

While APEC has been an advocate of promoting GVC development and cooperation as well as facilitating Digital and Internet economy, there is no dedicated initiative or project to date on Smart Manufacturing. Due to the extensive transformation and disruptive nature that these technological changes bring, the current Government policy, framework and regulation would not be adequate to address issues faced through digitalization.  As such, this project seeks to address the gaps existing in this space for APEC to contribute towards challenges and opportunities incumbent with Smart Manufacturing. Understanding its impact in the manufacturing and manufacturing-related services sector would enable economies to develop necessary policy responses as well as assist economies in identifying future areas of collaboration among APEC economies.

This is a Rank 1 project as it has the merits of four (4) APEC Funding Criteria 2017: 

·   Trade and Investment facilitation and liberalization, including infrastructure development and PPPs;

·  Next Generation Trade and Investment Issue;

·  Information Technology and digital economy, including e-commerce, ICT infrastructure, and digital trade; and

.  Internet Economy, including the implementation of APEC Initiative of Cooperation to Promote Internet Economy.

Objectives

The objectives of this inaugural seminar are to:

1) Understand the concept of Smart Manufacturing and its impact on policy and regulatory approaches (public and private sector) through initial survey; and

2) Share best practices and develop a compendium of best practices/case study on Smart Manufacturing Policies.

Alignment

This project was developed in response to the actions outlined by the Ministers Responsible for Trade (MRT) as an outcome of the 23rd MRT Meeting held in May 2017 in Ha Noi. Under the subject of E-Commerce, Internet Economy and Digital Trade, Ministers pledged to collaborate to unleash the potential of internet and digital economy, and they recognised the importance of an enabling environment that promotes the internet and digital economy to support broad-based and innovative growth in Asia-Pacific region. 

This project is aligned with MAG’s agenda in supporting deeper Regional Economic Integration. As in past initiatives such as on Trade in Remanufactured Goods, this project aims to look into how MAG can deliberate on issues related to trade, such as tariffs, NTMs, ROO, among others, for trade in products that are manufactured using smart technologies. Similarly, under the APEC Strategy for Strengthening Quality Growth endorsed by Leaders in 2015, economies are now working towards promoting closer cooperation in the 5 identified areas, one of which is on innovative growth. This initiative, therefore, will build developing economies’ capacity on Smart Manufacturing which will ultimately contribute towards the REI and Growth Strategy objectives.

TILF/ASF Justification

Not Applicable.

Beneficiaries and Outputs

Outputs: The experts will present and share views on current megatrends of Fourth Industrial Revolution in the context of its application to Smart Manufacturing. Various international forums and individual APEC economies would have differing views or definition on Smart Manufacturing particularly those that are leading this initiative. Before a concrete work programme is designed in APEC, it is crucial for expert speakers to provide an insight into Smart Manufacturing applications, policy responses by select APEC economies from both developed and developing economy on varying developmental stage of addressing Smart Manufacturing to ensure that case studies presented will highlight the difference policy responses and regulations. 

The project will involve:

1)  A baseline survey will be undertaken for all economies to gauge current policy responses as well as regulations involved for Smart Manufacturing;

2)  Two-day seminar to be held in Penang to discuss policy approaches, regulations for smart manufacturing and a factory visit to enhance understanding of the concept;

3)  Deliberation on the consolidated outcomes of the seminar and survey analysis including post-workshop survey of participant’s feedback on the effectiveness of the seminar; and

4)  Producing a report compiling selected best practices and recommendations on the possible way forward for APEC on Smart Manufacturing.

The compendium of best practices, outcome of seminar and recommendations on the way forward will be included in a report that will be submitted two months after project completion.

Outcomes: The concept of Smart Manufacturing in response to the Fourth Industrial Revolution is implemented differently due to the varying economic and technical advancement of each economy. By sharing existing policy responses by various APEC economies from both developed as well as developing economies as well as other industry experts would ensure that APEC as a large trading block remains at the forefront in addressing global megatrends. First-hand account of policy and regulatory approaches for Smart Manufacturing would ensure similar understanding of the concept. An APEC-wide understanding of that concept will be captured under the baseline survey would be the basis for APEC future work. Additionally, individual economies will be able to learn from these best practices and emulate those that are suitable to assist them in developing the appropriate policy responses. The outcome of the seminar is also expected to assist other fora in APEC to understand the concept and how Smart Manufacturing relates to their sub-fora.

Benefits: Direct beneficiaries of the project include policy makers, trade and investment promotion agencies, business associations and experts, researchers in the academia and industry players (including MNCs and SMEs) of the manufacturing and manufacturing related services sector in the APEC region. This project will kick-start the discussion on Smart Manufacturing concept and create awareness on policy approaches and regulations by various APEC economies. Policy approaches involving standards, services and general regulation would promote cross-fora collaborations in APEC. The survey will establish APEC’s baseline for Smart Manufacturing and the report will be made available to public through the APEC document database. In order to be inclusive, surveys and invitation to the seminar will also be extended to each ABAC economy representatives primarily through ABAC Malaysia representative. Additionally, major industry association will be partnered to ensure increased number of private sector participation to the seminar which will include factory/centre of excellences’ visit to experience first-hand Smart Manufacturing in action. Economies and all participants will also be encouraged to disseminate the report to their domestic stakeholders, particularly the relevant firms and/or organisations that would benefit from the outcomes report.

Dissemination

A report that factually summarizes the proceedings of the seminar and includes all documents and presentations presented at the seminar for which the project overseers have permission to reproduce, will be made publicly available on the APEC website. Additionally, information will also be disseminated through ABAC and APEC/economy’s social media platforms. The target audience include the private sector/industry and APEC Governments policymakers.

Gender

Gender considerations will include the selection of presenters and participants and the development of seminar content. Participating economies will be encouraged to nominate both male and female participants. Expected seminar outcomes will indirectly enhance gender equity through delivery of policy options which facilitate trade and thereby contribute to the development and improvement of the livelihoods of women in APEC developing economies particularly in the manufacturing sector. A minimum target of 10% female expert speaker will be imposed for the seminar and 40% female participation. PO will also encourage female expert speakers and participants through invitation and questionnaire sent via economies to ensure the targets are met.

Work Plan

Timeline

Key Activities

Outputs

November  2017

Obtaining approval from BMC

-  Final Full Project Proposal for the “Seminar on Understanding the Impact of Smart Manufacturing in Policy and Regulatory Approaches”.

December 2017 – March 2018

-  Identifying consultant for the survey

-   Dissemination of the Survey

-   Remote conferencing from economies seeking clarification on survey form

-   Draft TOR for APEC Baseline Study is attached. Finalisedf TOR for APEC Baseline study

-   Dissemination of the survey,and follow-up with individual economies for submission of initial response

-   each APEC economy representative

May – June 2018

Finalizing agenda, speakers and dissemination of invitation and nomination for eligible APEC economies

-   Proposed Agenda for the seminar is attached

-   Finalize agenda for the APEC Seminar

July 2018

Organizing the workshop in Penang including Factory/Centre of Excellence visit for nominated APEC seminar participants

-   Public-private dialogue and discussion during the seminar.

-   Post seminar evaluation survey including data collection, analysis and compilation of best practices

In the margin of CTI3, 2018 (August)

Reporting of the draft compendium of best practices come of seminar and recommendations on the way forward to MAG

-  The draft report of the seminar outcomes to be discussed and refined during MAG meetings intersessionally after project completion.

-   Recommendations to be proposed for APEC’s future work programme once endorsed.

Risks

The following are some potential risks that would need to be appropriately managed and mitigated: 

Risk 1: Program participants will not have the appropriate technical skills and knowledge to contribute to the breakout session and input on Smart Manufacturing. 

Mitigation: CVs of nominees, including their records of previous training and employment, will be scrutinised by the Project Overseers. 

Risk 2: There may be last-minute speaker cancellations. 

Mitigation: Identifying possible back-up speakers in advance of the event.

Risk 3: Lack of/low/delayed engagement of economies in participating in the initial survey, leading to poor representation of data collected. 

Mitigation: Survey will also be sent via ABAC to ensure industry input are captured. Additionally, APEC economies’ representative will be approached before the Seminar to ensure they provide feedback during the seminar as well.

Monitoring and Evaluation

All speakers and participants will be required to provide complete feedback on the efficiency and outcomes of the Seminar whether the objectives are met, whether the information sharing is able to bring about changes after its completion and how. The speakers and participants will be requested to provide feedback by filling in the evaluation form in addition to the survey form. The following information will be collected to measure/assess progress and impact by the PO: 

1)  The first indicator to be used is to assess whether the Seminar meets its set objectives. This can be assessed through an evaluation form to be filled in by participants. The target number of participants will be approximately 80 people (with 20 participants from 10 APEC travel-eligible economies). It is also expected that more than 12 APEC economies will participate in the workshop due to the growing interest in the subject, and its relevance to current trends.

2)  The second indicator can be whether the Workshop has accommodated the right participants and whether there has been representatives from both public and private sectors. It is targeted that the workshop will accommodate all participants who are involved in and related to the manufacturing and manufacturing related services industry – with a balanced representation of both the public and private sectors.

3)  The third indicator can be the quality of speakers, this can be assessed by compiling comments of participants in the evaluation forms. It is expected that at least 50% of the speakers will meet the quality anticipated by the participants. As per the agenda, the speakers will come from both sides: the MNCs and the SMEs.

4)  The fourth indicator relates to gender issue: How many female participants can attend and learn knowledge/experiences at the Workshop and how many female speakers can come and share their expertise and experiences. It is hoped that at least 25% of the participants and speakers are female.

Linkages

The subject of Smart Manufacturing covers a wide area of interest which also include (non-exhaustively) standards, regulation, policy approaches not only for the manufacturing but also services sector. The Fourth Industrial Revolution has been propagated at various international forum such as World Economic Forum (WEF), OECD and World Bank. In APEC, various initiatives in terms of promoting REI and digital economy are discussed however not in the package of Smart Manufacturing. Responses towards Smart Manufacturing require extensive transformation. Changes are also required based on the current Government policy, framework and regulation to address the existing gaps in this space.  It is timely for APEC to contribute towards addressing these challenges and opportunities brought about by Smart Manufacturing. Understanding its impact in the manufacturing and manufacturing-related services sector would enable economies to develop necessary policy responses as well as assist economies in identifying future areas of collaboration among APEC economies. 

Although the broader macro discussion will be held at MAG level, the broad area of coverage would also feed into the overall REI goal under CTI, regulatory approaches under the Economic Committee (EC) and extended to also other sub-fora under CTI such as SCSC, IEG and GOS. As a start, this project also has relevance to the work currently on-going for Manufacturing Related Services (MRS) under CTI through the Manufacturing Related Services Action Plan. Going forward, cross-fora collaboration will be promoted through consistent communications and consultations with the relevant APEC sub-fora before its elevation to the Committee level. Currently, cross-fora or joint dialogue sessions (e.g. through Trade Policy Dialogues TPDs) is proposed to achieve this aim. Additionally, inputs from APEC observers such as ABAC, PECC and ASEAN will also be sought in due course.

Sustainability

In order to ensure sustainability of the project, the following are proposed to carry the lessons learnt:

(i)  Based on the recommendation of this project, for further expansion of the scope to cover other technical areas such as standards, technologies and services;

(ii) Organising cross-fora or joint dialogue session on Smart Manufacturing; and

(iii) Developing a model for public and private sector interventions or partnership on Smart Manufacturing including through customised capacity building activities.

Project Overseers

Ms. Aedreena Reeza Alwi
Director,
Sectoral Policy Division
Ministry of International Trade and Industry (MITI), Malaysia
No. 7, Menara MITI, Jalan Sultan Haji Ahmad Shah, 50480 Kuala Lumpur.
Tel:  +603-6200 055
E-mail:  aedreena@miti.gov.my 

Ms. Alia Md Saleh
Principal Assistant Director,
Sectoral Policy Division
Ministry of International Trade and Industry (MITI), Malaysia
No. 7, Menara MITI, Jalan Sultan Haji Ahmad Shah, 50480 Kuala Lumpur.
Tel:  +603-6200 0575
E-mail:  alia@miti.gov.my , 4IR@miti.gov.my

Both POs have been involved in trade and industrial development for Malaysia for more than 10 years including as APEC CTI reps for Malaysia. Both POs are currently involved in spearheading the development of Malaysia’s Industry 4.0 policy framework and have been heavily engaging various stakeholders (public, private, academia, training institutes and international organisations) on the subject. 

A contractor to be appointed to assist in the baseline study including the organisation of the seminar based on the timeline drafted above. The contractor appointed will be based on their experience in related studies to Smart Manufacturing.

Cost Efficiency

Not Applicable.

Drawdown Timetable

Not Applicable.

Direct Labour

Not Applicable.

Waivers

Waivers are sought for the following: 

a)  Participants from travel-eligible APEC economies to receive per-diem and advance payment for the workshop; and

b)  10 speakers to receive per-diem and advance payment for the workshop.

A waiver is requested to permit the use of approved project funds to provide travel and per diem assistance to a maximum of two participants from travel-eligible APEC economies, workshop speakers/trainers either from APEC member economies. 

A speaker is chosen from WEF and another from Germany, as both have strong background in the subject matter on Fourth Industrial Revolution and Smart Manufacturing or Industrie 4.0.

Are there any supporting document attached?

No 
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Project No.

Project Title

Project Status

Publication (if any)

Fund Account

Sub-fund

Project Year

Project Session

APEC Funding

Co-funding Amount

Total Project Value

Sponsoring Forum

Topics

Committee

Other Fora Involved

Other Non-APEC Stakeholders Involved

Proposing Economy(ies)

Co-Sponsoring Economies

Expected Start Date

Expected Completion Date

Project Proponent Name 1

Job Title 1

Organization 1

Postal Address 1

Telephone 1

Fax 1

Email 1

Project Proponent Name 2

Job Title 2

Organization 2

Postal Address 2

Telephone 2

Fax 2

Email 2

Declaration

Project Summary

Relevance

Objectives

Alignment

TILF/ASF Justification

Beneficiaries and Outputs

Dissemination

Gender

Work Plan

Risks

Monitoring and Evaluation

Linkages

Sustainability

Project Overseers

Cost Efficiency

Drawdown Timetable

Direct Labour

Waivers

Are there any supporting document attached?

hdFldAdmin

Project Number

Previous Fora

Secretariat Comments

Reprogramming Notes

Consolidated QAF

Endorsement By Fora

PD Sign Off

Batch

Forum Priority

Committee Ranking Category

Committee Priority

PDM Priority

Priority Within Funding Category

Monitoring Report Received

Completion Report Received

PMU Field 1

PMU Field 2

PMU Field 3

On Behalf Of

Proposal Status

Originating Sub-Forum

Approval Status
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