27 As such, it is imperative for Malaysia to transform itself at an accelerated pace and embrace Industry 4.0 as a critical cornerstone to propel and sustain its future manufacturing competitiveness. Specific attention needs to be given to four overarching goals: • Drive continuous growth in manufacturing GDP; • Increase national productivity; • Create higher skill employment opportunities; and • Raise innovation capabilities and competitiveness. PROPELLING SMEs Forward In Malaysia’s transformation, particular attention needs to be given to SMEs as they account for the bulk of manufacturing companies (98.5%) and a major part of employment (42%). While most of the large manufacturing firms are already anticipating the benefits and risks of adopting Industry 4.0 practices, Malaysian SMEs appear to be cautious in taking the leap. Despite the enormous economic potential of Industry 4.0, SMEs in the industry remain relatively unaware about it. There is a risk that Malaysian SMEs might be left behind. Industry 4.0 has the potential to transform manufacturing SMEs in multiple ways: improving productivity, efficiency and cost; enhancing organisational, management and production capabilities; enabling better quality and monitoring; and developing innovators and producers of Industry 4.0 technologies. The level of transformation required is, however, very substantial for SMEs. It will not just be about adopting Industry 4.0 technologies, but also about changing business processes and operating models. For example, SMEs will need to collaborate and participate in broader production networks with other SMEs, large firms or multinational corporations. Digitalisation of the manufacturing system will be important to build direct links to end customers and produce innovative and customised products. Scale effects are also being redefined as SMEs are making headways in many markets and outperforming larger corporations due to their agility and adaptability. As such, manufacturing SMEs will need to learn how to deal with these disruptions, be more resilient and embrace the change as an opportunity. SMEs stand to gain the most from this Policy. The aim is to optimise the framework conditions and support structures accordingly, so that manufacturing SMEs will be able to meet the challenges of Industry 4.0 and take full advantage of the benefits and opportunities it presents. This will require a new and comprehensive policy framework that guides the transformation, systematically addresses potential barriers and fosters urgency and action across the industry and all other stakeholders.