22 Industry4wrd : National Policy on Industry 4.0 CASE FOR ACTION IMPORTANCE OF THE Manufacturing Sector in Malaysia The Malaysian manufacturing industry is an important economic sector contributing about 22% to the GDP in the last five years. To date, its growth has had the effect of stimulating jobs, attracting investments and creating business opportunities in the downstream activities and related services sectors. The manufacturing sector is expected to remain resilient and is on track to achieve the targeted annual GDP growth rate of 5.1% under the 11th Malaysia Plan (RMK-11). It is important to note that the sector is made up of a large number of SMEs, which account for 98.5% of the manufacturing firms. Although most of these SMEs do not have a strong global presence, many have the potential to be global exporters. Together with other ongoing initiatives like the eCommerce Strategic Roadmap and the Digital Free-Trade Zone (DFTZ), the Government is trying to provide the right platform for SMEs to reinvent themselves and adopt the latest technologies to be globally competitive. On a global level, Malaysia has been enjoying a fairly strong and competitive position in both manufacturing and the use of technology. The Global Manufacturing Competitiveness Index 2016 (by Deloitte Touche Tohmatsu) ranked Malaysia at 17th place among 40 countries. The report also projected Malaysia to climb four notches to 13th by 2020. On the technology and innovation side, the Global Innovation Index 2017 (by Cornell University, INSEAD and WIPO) ranked Malaysia at 37th globally among 127 countries and 8th in Asia. Further, the recent Readiness for the Future of Production Report 2018 (by WEF and A.T. Kearney) highlights that Malaysia is well-positioned to benefit from the future of Industry 4.0.