ZAKWAN ZABIDI is a Senior Vice President at Malaysian Industry-Government Group for High Technology (MIGHT). Zakwan lifts leadership at MIGHT with his management experience and knowledge acquired over 20 years across a broad range of high-tech industries. In his capacity, Zakwan strengthens MIGHT’s best practices in project management and planning. To date, Zakwan has played a key role in a number of MIGHT’s programs and initiatives involving national blueprints, strategic roadmaps, innovation models and frameworks, policy and strategy development, foresight, technology audit and business strategy development.
Let us talk about MIGHT’s involvement in the development of Dasar Industri Pertahanan Negara (DIPN) and the local Defence and Defence Related Industry (DDRI). Can you brief us on the prospects of this programme – how are we approaching the stakeholders in order to understand their expectations?
First and foremost, we would like to thank MINDEF for their trust in MIGHT to assist them in developing the DIPN as well as to conduct a holistic study on how to improve and develop the local DDRI.
This is no ordinary time, and this calls for no ordinary response. Currently, the nation is at war with Covid-19. In just one year, we’ve gone from two deaths to more than 2 million across the world. Covid-19 is not only a global pandemic and public health crisis; it has also severely affected the global economy and financial markets. Significant reductions in income, a rise in unemployment, and disruptions in the transportation, service, and manufacturing industries are among the consequences of the disease mitigation measures that have been implemented in many countries.
The role of defence and security will also change. “Resilience” is the word of the moment, a military outlook based on strengthening civilian infrastructure to better withstand pandemics, the effects of climate change or cyber-attack. Defence organisations across the world have been reported to be integrating transformational technologies into their operations and accelerating digital transformation plans following the crisis.
Now is the best time to relook at the role of defence and security and therefore Dasar Industri Pertahanan Negara (DIPN) serves as the policy framework and guidance for defence industry development. This will incorporate strategies to enhance defence technology and science research, funding and education while cultivating long-term future for the industry to reach full potential and play a bigger part to propel our countries’ economy.
As the study involves various stakeholders, several engagement methods have been put in place to ensure greater coverage. Consensus and the right expectation towards DIPN is vital in bringing our local DDRI to the forefront, in-line with the five thrusts stated in the Kertas Putih Pertahanan (KPP) – the defence white paper. We understand getting full commitment from the stakeholders will be a challenge. However, we believe that for national interest and security, the stakeholders will eventually find a common ground to start working together. To assist the stakeholders, a series of engagement activities involving ministries, agencies and industry players have been planned for the DIPN study. We hope to get support and commitment from all parties to ensure a successful development and commencement of the DIPN study.
Recently there was a scenario-building workshop conducted by MIGHT in collaboration with MINDEF. Can you share about the workshop and the key outcomes of the programme?
In October 2020, MIGHT conducted a scenario-building workshop in collaboration with MINDEF to help set the direction for the development of DIPN. It was attended by representatives from relevant ministries and agencies.
During the workshop, the participants collaborated to explore and identify the most impactful drivers of change that will shape and influence the future development of the local DDRI. The activities helped the participants understand and anticipate plausible scenarios that could affect the local DDRI in the next ten years.
By exploring the defence industry’s potential, we were able to develop a shared vision for the future. We collected many noteworthy responses from the participants for cross-ministry collaboration and partnership. We are grateful for their involvement throughout the workshop.
The workshop serves as a platform for stakeholders to share their concerns and expectations towards DIPN. Developing a policy that will work holistically for the country and industry is still a work in progress. Finding the balance between those two will be key to charter a bright future for the local DDRI.
When we talk about development of an industry, it is inevitable that discussions on budgeting and funding will crop up. Through the study and analysis conducted by your division, what are the most common issues on the topic globally and how do countries overcome the issues?
Globally, there are several common issues plaguing budgeting and funding for defence. The challenge comes down to pinpointing and understanding which of these issues are large-scale shifts that require an organisational response.
Among the countries that are leading in defence, only a few such as the United States and the United Kingdom meet the NATO spending targets of 2% of GDP and 20% of the defence budget spent on equipment. The current COVID-19 pandemic has worsened the situation as countries around the world are shifting their spending towards healthcare and other, more pressing economic sectors to contain the impact of the pandemic to their respective GDPs. We have seen a similar trend of a stretched defence budget in the local defence industry.
Having an adequate allocation is crucial to allow stakeholders to properly implement a long-term plan without disrupting the progress of the plan and compromising on requirements. Ultimately, it avoids the vicious cycle of project delays that result in cost overruns which, in turn, cause further delays. Also, we are aware that for a country to be self-reliant, it is important that the defence industry excels in R&D. Several factors influence R&D including high investment costs, funding availability, market acceptance and profit uncertainties.
We have seen several approaches by countries globally in overcoming the issues. In some countries, interaction with the defence industry has changed. Privately financed companies have become involved in funding equipment, taking on jobs previously carried out by the military and providing facilities previously owned and operated by the government. The European Union’s (EU) defence procurement, for instance, has become increasingly collaborative with the introduction of the European Defence Fund, a funding mechanism for security and defence acquisition envisioned to help EU member states spend on their defence projects collectively and more efficiently. Also, the EU focuses most of its R&D spending on specific programmes and a forward order book.
Another important aspect to the sustainable development of an industry is talent and human capital. How do countries globally bridge the skills gap and mismatches in talent for their defence industries? What measures are being taken to improve the situation?
No doubt that talent and skills are key to sustaining any industry. Yes, we have noted a similar trend in the defence industry with regard to skills gap and mismatches in talent and skills. Many defence organisations struggle to get access to the appropriate mix of skills and talent, due in part to insufficient qualified and skilled human capital to absorb high technology.
It also does not help that skilled manpower is continually being pinched by companies outside of the defence industry. This can be attributed to the perception that defence is unattractive, highly bureaucratic, less dynamic and does not pay very well. Declining defence budgets and relatively low levels of defence investment over the past decades have inadvertently contributed to a stagnation in industrial skills and learning.
Nevertheless, we believe there are a few initiatives in place to address these gaps. Funds have been poured on studies to review past and current initiatives to address defence-related skills gaps. There is collective effort between the Government, the industry and training institutions to ensure talents stay up to date with the latest trends and developments in the defence industry. For instance, training institutions play their roles by encouraging the uptake of Science, Technology, Engineering and Maths (STEM) studies, while the industry takes the lead in supporting programmes that align industry needs with critical defence-specific skills requirements.
