In line with the changing expectations for the country to be more innovative and creative, MPC had aligned itself to meet the challenging demands as outlined in the New Economic Model (NEM) and to accelerate the nation’s transformation and aspiration to achieve a high income economy through enhancing productivity and innovation.

MPC’s new direction is reflected in the newly set up five-department model which focuses on drivers for higher productivity growth. The departments are Regulatory Review, Enterprise Innovation, Knowledge Management, Business Excellence and Global Competitiveness.

In the Tenth Malaysia Plan 2011-2015, MPC is entrusted to review business regulations for competitiveness. With this new  direction, MPC has realigned its activities and implemented measures to ensure that it has the necessary capabilities and resources to review existing business regulations with a view to removing unnecessary rules and reducing compliance costs.

Besides Regulatory Review, MPC was specifically tasked to undertake productivity enhancement research activities as well as advisory and training to promote enterprise innovation. With the setting up of the Enterprise Innovation Department, MPC was able to better assist industries to enhance their innovation capabilities and improve efficiencies. These two core functions were supported by Knowledge Management, Business Excellence and Global Competitiveness. Knowledge Management creates the knowledge base to further improve productivity while Business Excellence develops best practices for companies to emulate and become more competitive. Global Competitiveness on the other hand, provides international benchmarks and best practices for the country to chart a higher growth path.

MPC will support the nation’s aspirations to achieve a productivity growth an average of 4.6 percent annually until the year 2020. Based on this target, MPC will align its strategic initiatives and priorities in tandem with the emphasis on the National Key Economic Areas (NKEAs) of the Economic Transformation Programme (ETP) and the Government Transformation Programme (GTP).

Knowledge supported by research efforts is the thrust of capacity building and decision making in the private and public sectors. MPC’s research efforts are guided by Consultative Panels, comprising experts from different economic sectors that provide inputs, expertise and experiences to enable MPC to carry out research that is current and meeting the industry requirements.  The Productivity Report, which is in its eighteenth edition, provides a comprehensive analysis of the productivity performance at the industry, sectoral, national and international levels. A total of 78 research projects were completed in 2010 in specific areas of innovation and knowledge management, competitive strategies to enhance Government Efficiency, Total Factor Productivity (TFP), Service Innovation, Human Capital Development and the Productivity Linked-Wage System (PLWS). The research projects also resulted in 59 publications on productivity, competitiveness and innovation for 2010.

Productivity and Innovation are the drivers towards higher productivity growth. To accelerate this growth, it is imperative that the industries introduce high impact and innovative initiatives. To this effect, MPC had introduced the Enterprise Innovation Intervention Programme (EIIP) which is a system to diagnose and improve    processes along the value chain and monitor success of the intervention to further enhance the innovative capacity of the companies. During the year, MPC implemented 872 Productivity and Innovation Enhancement Programmes and 81 Systems Development projects attracting a total of 21,918 participants.  To foster innovation and creativity, industries need to engage, experiment and transform.  In this respect, the synergy of cross functional teams such as the Innovative and Creative Circles (ICC) had resulted in many breakthroughs in product and service innovation, improved work efficiency and enhanced value creation. During the year, 168 circles from 91 organisations participated in the national ICC convention. The outcome of the activities from these circles resulted in total cost savings of  RM123 million.

MPC encourages Malaysian companies especially Small and Medium Enterprises (SMEs), to become global players through the enhancement of productivity and innovation. In terms of organisations participating in MPC’s programmes, SMEs accounted for the highest number with 1,841 organisations from a total of 2,742. To ensure greater outreach, MPC attuned its activities to continuously develop new approaches and programmes for SMEs.

At the international level, MPC also conducts productivity improvement programmes under the Malaysian Technical Cooperation Programme (MTCP), Third Country Training Programme (TCTP) by the Japan International Cooperation Agency (JICA) and the Asian Productivity Organisation (APO). These collaborative efforts provided local companies with international benchmarks and best practices to sustain competitiveness.

Transforming enterprises into global players requires a Business Excellence Framework that enables local enterprises to benchmark their performance. To assist these enterprises, various business efficiency enhancement programmes had been conducted by MPC. These include Benchmarking and Best Practices and assessment through Quality Management Excellence Award, Productivity Award and Quality Environment (QE) programmes. 

Benchmarking and Best Practices programmes provide the necessary tools for both the private and public sectors to ensure continuous improvement.  A total of 357 SMEs and 72 public sector organisations participated in MPC’s Productivity Work-Out sessions and Business Process Improvement programmes. MPC also provides a mechanism for sharing excellent innovation practices through the establishment of the Community of Innovation (CoI).

In the area of Quality Environment (QE), more companies had come on board to be assessed and certified. An increase of 34% from 431 companies in 2009 to 577 companies in 2010 was recorded. The QE initiative is the foundation for continual improvement in operations and service delivery systems as well as inculcating a productivity and innovation culture in the organisation.

In strengthening Malaysia’s efforts to enhance competitiveness, MPC is a partner institute to two leading competitiveness ranking agencies namely, the Institute for Management Development (IMD) which publishes the World Competitiveness Yearbook (WCY) and the World Economic Forum (WEF) which publishes the Global Competitiveness Report (GCR). MPC also collaborates with the Australian Government Productivity Commission on international best practices in the area of regulatory review.

MPC has been entrusted with enhancing the nation’s productivity and innovation to move Malaysia into an innovation-driven economy in which productivity is prominently featured. The private sector needs to be re-energised in order to generate a more competitive domestic economy while the public sector needs to be strengthened in setting and implementing policies aimed at providing a more conducive business environment.  MPC initiates Regulatory Review and Enterprise Innovation to facilitate and create a dynamic business ecosystem.

I would like to express my gratitude to the Ministry of International Trade and Industry for their continuous support towards MPC’s activities.  Appreciation is also extended to the Board Members, the Members of the Consultative Panels, industry associations and their representatives for their contributions and invaluable insights. I also wish to thank all MPC staff for their perseverance, innovative and creative ideas which have helped to create higher impact services, and their commitment in positioning MPC as Malaysia’s leading productivity and innovation organisation.

Tan Sri Azman Hashim
Chairman
Malaysia Productivity Corporation