‘Panther 911’ : Digistar is bullish on new central monitoring system (CMS)

Digistar chairman Tan Sri Mohd Zaman Khan (left), Inspector -Gener al of Police Tan Sri Khalid Abu Bakar and Lee during Pan ther 911’s official launching on April 25, 2014.

Information and communications technology (ICT) and property company Digistar Corp Bhd is bullish about the prospects of its newly-launched central monitoring system (CMS) called ‘Panther 911’.

Chief executive officer Datuk Wira Lee Wah Chong says the company targets 100,000 users for its hi-tech product in the first year.

A CMS is security-based system that includes aspects such as CCTV monitoring and alarms.

Digistar’s medium term goal is to secure a subscription base of 500,000 for its CMS in five years.

“The margins are good, about 20% to 30%. And this would be reflected from our current financial year (ending September 30, 2014) onwards,” he tells StarBizWeek.

“The first year may be slower than what we target but once our CMS gains visibility in the market, we expect a jump in take-up rate among business owners and individuals,” Lee says.

Digistar had spent RM5mil over the past two years to develop the CMS.

The company intends to use a multi-level marketing strategy to push the product into the market. “To incentivise the sales staff, they will get monthly a commission of 5% from the subscriptions they secure.”

In addition, the police force is also looking at the installation of closed-circuit television (CCTV) cameras at resorts and islands off Sabah’s east coast.

Last week, the police was reported to have asked Digistar to send them a proposal on installing the ‘Panther 911’ security system in Sabah.

The Inspector-General of Police Tan Sri Khalid Abu Bakar said to have the system linked directly to police stations would help security forces respond faster.

Khalid said the Eastern Sabah Security Command (Esscom) was planning to place security teams at 11 private resorts and islands that were the furthest away from Semporna and Lahad Datu. This was in light of recent killing and kidnapping events highlighted in the news.

If successful in this tie-up with the police, it would be Digistar’s first collaboration with the public sector for its CMS business. Right now, its target is on the mass market and commercial buildings.

Entering the Sabah market would not come as a surprise as Lee has always wanted to expand into Sabah and Sarawak.

That would be the second phase of Digistar’s security system business and the company estimates another RM5mil of investments for the expansion in the next two years. However, Lee notes that there needs to be better Internet connectivity in order for Internet-based surveillance systems to thrive in the country.

Digistar has a few competitors in the local CMS space.

But it seeks to differentiate itself by the attractive features of its system.

Digistar’s Panther 911 CMS system offers 24-hour monitoring services via an internet protocol-based platform. It can switch to run on 3G, 4G and LTE networks during power disruptions.

Banking on property sector

Lee says the company has plans to be among the top 100 companies in Malaysia in terms of market capitalisation in the next five years.

To do that, Lee says the company needs to further expand its property business. For Lee, property is Digistar’s next phase of growth as he opined that the growth trajectory for an ICT company has its boundaries.

“We are still focused on our ICT business but to achieve bigger goals, we will expand our property division,” he says. “We are looking for pockets of land around the Klang Valley now for small scale projects.”

Digistar already has a serviced apartment project in Malacca called The Heritage, with a gross development value of RM150mil. It is already 70% sold and is targeted to be opened this November.

Lee says the company intends to rent out the remaining 30% of apartments for recurring income.

“We plan to rent out like a hotel.

“The project will be a ‘condotel’, a combination of condominium and hotel,” he says.

Digistar is already speaking to hospitality partners to rope in for the management of the hotel component at The Heritage.

The company has also a 15-year concession for the construction and asset management of the Malaysian National Technology Advancement Centre in Alor Gajah, Malacca.

The project is a tie-up with the Works Ministry for the minstry to carry out training programmes for engineers and architects.

Its concession consists of RM174mil for the construction of facilities and infrastructure, and RM66mil for the provision of ICT and lab equipment.

Lee says the margins for this project would likely be in the double-digit range as well.

Digistar is also in talks to develop its telecommunications segment as it owns three individual licenses from the Malaysian Communications and Multimedia Commission to provide network and facilities services for five years.

Lee says discussions are on-going and declined to reveal any details.

All these efforts, says Lee, are aimed at steering the company back into profitability.

For the 2013 financial year (FY13), Digistar made a net loss of RM11mil compared to a profit of RM6mil in FY12.

The company had said that the loss was due to a higher operating cost, commencement of projects where revenue was yet to be recognised as well as the business expansion for its CMS and telecommunications divisions. Lee reckons that Digistar’s CMS as well as other initivatives would help turnaround the company and generate long-term recurring income.

Contributed by Liz Lee The Star/Asia News Network

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Investing in 2014

Value Investing Summit 2014 - 'Live'

The end of the year is the time to reflect on the past and the beginning of the year is time to reflect on the future. 

SO how did your portfolio do last year?

The Dow Jones Industrial Average for US stocks hit 16,576 with a 26% gain for the year, the best year since 1996. By comparison, the Hang Seng Index performed 3%; Tokyo Nikkei did best at 57% and Bursa Malaysia ended 10.5% higher, just a tad off its record high.

On the other hand, the fastest growing economy in the world had the worst stock performance – the Shanghai A share index closed the year at -8%. Gold prices fell 27% to US$1,196 per oz, while property prices seemed to have done well in the United States and China. Bond prices are now extremely shaky, with the JPM Global Aggregate Bond Index falling by 2% during the year.

What is going on?

The answer has to be quantitative easing (QE) by the advanced country central banks. The world is still flush with liquidity and since investors are unclear on what direction to invest in, they have reversed investments in commodities (such as gold), avoided bonds because of prospective rises in interest rates and essentially piled into stocks.

Individual investors like you and I tend to forget that the market is really driven today by large institutional investors, including fast traders with computer-driven algorithms that have better information than the retail investor and can trade in and out faster and cheaper. It is not surprising that retail investors who have traditionally driven Asian markets have been moving more to the sidelines.

Even institutional investors are not equal. Long-term fund managers like pension funds and insurance companies are, by and large, highly regulated, with restrictions on what they can or cannot buy. So it is not surprising that the biggest money managers are today even larger than banks. BlackRock, the largest independent fund manager alone looks after nearly US$4 trillion, larger than most banks in emerging markets.

There are, of course, two types of asset management – active (where the managers actively invest according to their judgement on your behalf) and passive, where they simply follow the market indices or buy exchange traded funds (ETFs) that track market indices. According to the Towers-Perrin study of top 500 global asset managers, during the last decade, passive managers did better than the group as a whole.

So should we trust the market experts? I have been reading for years Byron Wien’s annual Predictions for Ten Surprises for the Year. Byron used to be a top investment pundit for Morgan Stanley but he is now working for Blackstone. His prediction of surprises is defined as events where average investor would assign one-third change of happening, but which he believed would have a better than 50% change of happening. He got roughly seven out of ten wrong in 2013, the more relevant mis-calls being the price of gold, a possible drop in S&P 500, the price of oil and the A share index.

Bill Gross, one of the top bond fund managers, pointed out that retail investors tend to be conservative, focusing largely on safe portfolios, such as investment grade and high yield bonds and stocks. But institutional investors have gravitated instead into alternative assets, hedge funds and more unconventional assets. Unfortunately, all these assets are “based on artificially low interest rates”. So if low interest rate policies are reversed, investors have to be prepared.

He rightly pointed out that the advanced country central banks are “basically telling investors that they have no alternative than to invest in riskier assets or to lever high-quality assets.” But if they withdraw QE or “taper”, then higher interest rates will cause a reversal of investment prices and also cause de-leveraging.

In other words, in order to bail out the world and keep the advanced economies afloat, their central banks are asking global investors to bear quite a lot of the risks of the downside. The smart money might be able to get out fast enough, but most retail investors do not have the skills to time their investments right.

So what should the retail investor do?

Peter Churchouse, who writes one of the best reports in Asia called Asia Hard Assets Report, quoted his son’s advice as “Buy good companies with strong earnings, strong growth and rock solid management. The world will go on.”

Quite right.

But how do we know which companies have rock solid management? My answer is: watch not what the annual report say (by all means read them), but look at what the management does. I have always tended to shy away from companies with high-profile CEOs who tend to win “Manager of the Year” awards.

There is, of course, no substitute for solid own research and look for yourself how the company or the economy that it operates in is doing.

The consumer or tourist is still the best investor because seeing for yourself gives you a feel of what is quite right or wrong with the country and just visiting the retail outlet, getting a sense of the service quality and the employee attitude would give you first hand what is right or wrong with the company you are investing in.

My favourite economy in Asia right now has to be Indonesia. I spent nearly 10 days over Christmas going through the markets of the most densely populated cities in Java and my conclusion was that Indonesia is on the move – literally. The population is young, mobile and connected. Every other shop seems to be selling mobile phones, cars or motorbikes. The quality of the retail shops, design and service has been improving over the years. And despite the coming elections, there is hope for change.

My bet, therefore, for 2014 is that if we stick to the better-run companies in the stronger economies, we should be better prepared for any tapering of QE to come.

Contributed by Tan Sri Andrew Sheng

Tan Sri Andrew Sheng is president of the Fung Global Institute.

MyDistress application

MyDistress app has been very useful 

I STRONGLY feel that the police should reintroduce the MyDistress application.

At about 4.30pm on Nov 4, my daughter and her friend had an encounter with a road bully in Shah Alam.

She has the MyDistress application on her phone but she was unable to use it as the application was discontinued by the police.

The man was very aggressive and began kicking her friend’s car when they stopped. He even spat at the lady driver’s face. This was over a lane-cutting incident.

She called me and I advised her to proceed to the nearest police station.

I then dialled 999 and got the operator who asked me too many questions about the incident. Where was the exact location of my daughter, etc?

How would I know their location when they were driving towards a police station?

If my daughter could trigger her MyDistress app, the police would have known her location.

I had on three occasions used MyDistress.

In the first instance, my neighbour, a senior police officer, called to tell me that he had cornered a burglar. I pressed the button on my phone for MyDistress which sent a signal that I had an emergency in my house. The police called and I told them it was my neighbour’s house. Within minutes two patrol cars arrived.

In the second incident, I was on my way to KL Sentral in a Komuter train at around 2pm when my wife, a teacher, called to say she saw a man jumping over our fence.

The train was near Bangsar. I triggered MyDistress. The police called and informed that they had despatched men. On reaching home there were two patrol cars and the police were taking a statement from my wife. What a relief!

In the third occasion, I was praying in a surau at a petrol station in Puchong when I saw a man with a bag and an axe.

I triggered MyDistress. Again the police called to know my whereabouts. Within minutes they arrived and questioned the man.

Kudos for the police with MyDistress.

Contributed by SAMAD RAHIM Shah Alam The Star/Asia News Network

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1. MyDistress | MyDistress 
MyDistress is a personal safety application designed based on smart technologies ... the use of MyDistress application and how it works quickly and accurately. 
2.Application Guideline | MyDistress
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Malaysia’s vanguards: Design thinking of grooming innovators

Malaysia’s vanguards

SIMPLY put, Design Thinking produces creative solutions to solve complex problems. In other words, you have to be creative to be innovative. But can one learn creativity or for that matter, innovative skills?

Yes, if you believe David Kelley, the design thinking guru and founder of global design firm Ideo and the School of Design Thinking at Stanford University.

“So many people think that it’s kind of in your gene – you’re a creative person or you’re not. I don’t buy it,” says Kelley in Design & Thinking, a documentary on design thinking by San Francisco-based One Time Studio. Kelley argued that human beings are naturally creative (just observe kids!) and you just need to rediscover your creative confidence to crack open the door to innovation. The process of design thinking is a “scaffolding for creativity” as design thinking advocate, Tim Brown of Ideo, calls it.

Hence when Genovasi was initiated by the Government to produce “innovation ambassadors,” the organisation settled on design thinking methodology to cultivate these innovators.

“We wanted an approach that would instil a sense of curiosity for technology and entrepreneurship among youths. And any innovation that derives from the approach should include empathy towards the needs of people,” says Datuk Seri Dr Kamal Jit Singh, chief executive officer of Unit Inovasi Khas (UNIK) which manages Genovasi.

“Design thinking fits these criteria perfectly as it offers a human-centred approach to innovation.”

Under the Innovation Ambassadors Development Programme, participants go through a 10-week programme to grasp the nuts and bolts of design thinking and apply their know-how to solve real-life problems posed by project partners. To date, project partners include The Millennium Project, an independent, non-profit think thank, and RSA (The Royal Society for the Encouragement of Arts, Manufactures and Commerce), a London-based charity committed to finding innovative solutions to today’s social challenges. Upon completion of the programme, these “ambassadors” may go on to create startups or find placements in Genovasi’s partner organisations like government agencies, GLCs or corporations.

“These Ambassadors are expected to bring positive changes to three core areas: improve public service delivery within government departments, ministries and agencies; improve the quality of life in rural and local communities and create new economic wealth through entrepreneurship or industry game-changing efforts,” says Dr Kamal. Genovasi’s plan is to produce a minimum of 5,000 Innovation Ambassadors over the next five years.

As collaborators, the Hasso-Plattner-Institut (HPI) School of Design Thinking in Potsdam, Germany, not only helped develop the programme for Genovasi but also conducted strategy and trainers’ workshops and assessments.

“It was really great to see there are a lot of Malaysians who are keen to do something under the innovation programme,” says Dr Claudia Nicolai, the general programme manager of HPI D-School. Nicolai was in Malaysia to help set up the programme. “People are extremely open-minded and willing to work together.”

“Malaysia’s advantage, compared to Germany, is that you are so diverse. You have influences from different ethnic cultures, customs and religions – that’s an advantage to generate truly creative ideas.”

The D-School in Germany did not copy and paste Stanford University’s D-School model but instead adapt it to the European environment.

“Genovasi’s programme is basically an Asian version of what we are doing. It puts a new flavour in design thinking,” says Professor Ulrich Weinberg, HPI D-School’s director.

“You have the chance to build on the experiences of Stanford and HPI,” he adds. “You can build something which is the next version or reinvent what we’re doing.”

The Innovation Ambassadors Development Programme (IADP) is open to university students or entrepreneurs up to the age of 35. Students and experts from all disciplines are welcome to apply. The programme is free for Malaysians. IADP’s second intake starts from May 27. Closing date for application: March 31, 2013. For more info, go to genovasi.my

Grooming innovators

To produce innovative Malaysians, innovation agency Genovasi teamed up with a Germany-based institute to teach ‘design thinking’. We travel to Potsdam, Germany, to find out more about this creative approach. 

NEON-coloured sticky notes, Lego blocks, rainbow-hued foam peanuts, knitting threads, cardboard boxes and colouring pens – these are “tools” for brainstorming and constructing prototypes. Whiteboards on wheels replace walls that separate the “classrooms.” Chatter and guffaw waft across the space.

You can’t help but feel the creative vibes and peppy energy that emanate from the Hasso-Plattner-Institut School of Design Thinking (aka D-School). Located in the historical city of Potsdam, southwest of Berlin, D-School is part of the Hasso-Plattner-Institut, an IT-Systems Engineering university founded by Hasso Plattner, the man behind software giant SAP.

We are on a media familiarisation trip organised by Unit Inovasi Khas (UNIK), an innovation agency under the Prime Minister’s Department, to get an insight into D-School, which partners Unik to train Malaysian youths to become innovators.

Founded in 2007, the D-School curriculum is based on the “design thinking” process – an approach that looks at users’ needs and desires, leading to sustainable innovations that can make people’s lives better. It is not about design per se.

And unlike the mythical lone genius inventor, design thinking involves teamwork. It draws on the expertise of individuals from varying backgrounds and disciplines, from engineers and anthropologists to accountants and fashion designers.

Hardly a newfangled idea making its runway debut, the concept has been bandied about for decades and used as a mantra by some of the biggest creative companies in the world, including San Francisco-based global design firm Ideo.

But the methodology was pioneered from Stanford University in California, and taught and explored at the Hasso Plattner Institute of Design at Stanford since 2005. As part of the coursework, students get to work on real-life “design challenges” developed together with project partners from the industry, public sector or non-profit organisations.

Design thinkers

In the corporate realm, award-winning companies like Ideo employ design thinkers who are marketers, engineers, psychologists, industrial designers and architects. Ideo has 12 offices in eight countries and high-profile clients like Visa, Toyota, Samsung, Procter & Gamble and Coca-Cola.

Take their design project with Shimano, the leading supplier of bicycle components in the world. In 2004, Shimano was grappling with stagnated growth in its high-end road-racing and mountain-bike sectors in the United States. Driven by technology innovations for years, the company’s initial instinct was to introduce high-end casual bicycles that might appeal to baby boomers.

But with the help of Ideo, adopting the design thinking method, the company realised they should reach out to the 161 million US adults who aren’t riding bicycles. Using a human-centred approach, Ideo and Shimano hit the streets to survey why 90% of American adults do not ride bicycles. Findings reveal that the complexities (like shifting gears) and costs of modern bikes, the high maintenance, and the danger of cycling on roads are factors that put off casual cyclists.

Shimano then partnered with bicycle manufacturers like Giant, Trek and Raleigh to produce a biking experience that stirred up childhood memories of simple, joyful riding. These “coasting” bicycles have coaster brakes (back pedalling to brake), automatic shifting and puncture-resistant tires to make cycling easier and low maintenance.

To ensure a holistic experience, a comprehensive website helps people to locate safe places to ride. Shimano also launched a trade campaign and training curriculum to educate retailers to better serve recreational customers. In six months, the three manufacturers sold out the 30,000 Coasting bikes produced.
“Design thinking is a mindset and a set of methods you can use to solve problems that can impact society and businesses,” explains Dr Claudia Nicolai, the general programme manager and lecturer of D-School, on our visit.

“It’s not like it has never been done before,” admits Nicolai who has been studying strategic innovations, the precursor to design thinking, for a decade.

“What it does is to combine different methods and developments and put it under the design thinking label.”

Nicolai develops and designs teaching content, coaches students and teachers, hosts workshops and develop design-thinking strategies for companies.

At D-School, there are three core elements in design thinking: focus on multi-disciplinary team, team-supported space that is highly flexible and dynamic, and the process itself, Director of D-School Professor Ulrich Weinberg added.

Dubbed the “grandfather of computer graphics in Germany,” Weinberg is instrumental in getting D-school going from the beginning.

He has 25 years of experience in 3d animation, simulation and computer games. At D-School, the course runs over one term (Basic track) or two terms (Advanced track) spanning 12 weeks, and students are assessed based on their teams.

“What I learned in the last five years is that you will not get the full, dynamic energy of the people, whether in companies or schools, if you have incentive models that focus on individual performance.”

In recent years, huge corporations in Germany are also jumping in on what D-School is doing.

“Companies are calling us to partner on projects or to book workshops on design thinking,” says Weinberg. Some of D-School’s partners include industry giants like Siemens, Johnson & Johnson, DHL, Panasonic and Lufthansa Airlines.

The enthusiasm of D-School students is as infectious as their teachers’.
“I think the key benefit is learning how to design for people, focusing on their needs or wishes. You are not trying to sell things but to fulfil needs,” says Juliana Paolucci, 24. A product and graphic designer from Brazil, Paolucci and her teammates Andrezej Karel, Sabrina Meyfeld and Laura Kroth are working on a design challenge for Genovasi. Their subject: how to engage young people in the development of the community.

They had to set out to find solutions that can convert Malaysian youths from armchair critics to empathetic doers.

“The youths are the future of the country, they need to engage the community and change reality,” explains Paolucci. “But first we need to find out their needs, wants and desires, and ways to fulfil them.”

“Also we need to take into account activities they like to do, for example, how do they use social networking to take community action?”

Using design thinking methodology brings together different actions in a structured way, Karel added.

“The first idea might not be the best solution, so we go through an iterative process multiple times: understand, observe, define point of view, ideate, prototype and test,” says the 25-year-old Polish who is working on his thesis for his marketing/management degree.

Room for failure is the DNA of design thinking.

“In a conventional design process, you just sit in your room, and keep going at it until you think it’s perfect,” explains Meyfeld, 27, a communication scientist.

“But with design thinking, we’re out testing prototypes on the second or third day and if it doesn’t work, we start at it again.”

“I am keen on social innovation and want to learn more about how to apply the methodology in my social enterprise,” adds Kroth, 29, who studied communications and public relations. She hopes to start a small business to bring people of different generations together to develop dialogues on German history and keep history alive for future generations.

 D-School experience

As for D-School alumni like Jeremias Schmitt, his experience prepared him for how he wants to work with people and how to develop projects further.

“After the D-School experience, students actually find real meaning in what they do, why they do it and how they want to do things,” quips the 27-year-old Berliner.

“Some even applied for jobs that they never thought of applying, for example, a student who studied information science seeking for a business development job.”

In Europe, more and more start-ups are using design thinking as a tool to innovate, Schmitt added.

So is design thinking the be-all and end-all of innovation? And how does one measure its efficacy or success rate?

“For me, it’s not about how many products are successful in the market. I care more about how design thinking deeply impacts the students, how they got the chance to experience the process, and how it changed the way they do things,” says Weinberg.

To date, D-School has done about 70 projects. One-third of the ideas were implemented at some point, the other third came up with solutions that led to different things, and one-third led to nothing.

Clients who worked on the project either left their companies or there was no follow-up from the clients’ side. The role of design thinking at D-School is to create innovators, not so much innovations.

In the case of Shimano’s Coasting programme, three years after its initial success, the company pulled the plug on the programme and manufacturers stopped rolling out coasting bikes because sales fell below expectations.

Some industry observers blamed it on the bike brands that weren’t doing their jobs to communicate the benefits of Coasting to retailers and customers, among other factors.

It wouldn’t be fair to say this design thinking experiment has flopped.

Suffice to say, design thinking isn’t the magic pill for success.

But “use it to its advantage: to give new insights, outline new ways of thinking, introduce new techniques or develop new entries to the market,” as innovation and design writer/editor Helen Walters (formerly with BusinessWeek and Bloomberg) attested in her talk “Design Thinking Won’t Save You.”

By LEONG SIOK HUI star2@thestar.com.my

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How can universities powering Malaysias' ivory towers?

It is time we look at how our universities can be true to their noble calling as a mirror of humanity’s great heritage rather than be in danger of choosing show over substance.

A UNIVERSITY is a temple of learning and a storehouse of the knowledge and wisdom of the past. It is a receptacle of art, culture and science and a mir=ror of humanity’s great heritage. At the same time it is a laboratory for testing out a new vision of the future.

In more than four decades as a teacher, I have witnessed the ebb and flow of many educational movements. Some of them give me the feeling that we are choosing show over substance.

> Industrial links: In order to refute the charge that universities are ivory towers with no appreciation of societal needs, all universities have forged close relationships with the professions, industries and commerce. Curricula are devised to satisfy Qualifying Boards and potential employers. Students are required to do periods of apprenticeship. Captains of industry are often recruited as adjunct professors.

All this is laudable. At the same time it must be realised that our orientation towards industries and the professions distorts university education in some ways. A balance is needed.

> Lack of liberal education: The role of universities is to advance knowledge and build characters and not just careers. In their obsession with narrow professional goals and employability of graduates, many universities adopt curricula that are bereft of the arts and humanities. This paucity and poverty is accentuated because, unlike many countries, professional courses in Malaysia do not require a degree at entry point.

If a university is true to its worth, it must provide holistic education and produce well-balanced graduates who have professionalism as well as idealism, an understanding of the realities as well as a vision of what ought to be. Merely supplying technically-sound but morally-neutral human cogs in an industrial wheel to contribute to high production figures, will not in the long range lead to enlightened development of human capital or of society.

> Research: The crucial, core factor in a university’s eminence is qualified academicians with proven research abilities and a solid commitment to lead and inspire their wards to travel up the mountain path of knowledge.

A university cannot become an acclaimed university unless it possesses a large number of scholars who are the voice of the professions and who not only reflect the light produced by others (knowledge application) but are in their own right a source of new illumination (knowledge generation).

However, emphasis on research is leading to a number of adverse tendencies. Teaching is being neglected. Committed teachers are being bypassed in tenure and promotions in favour of entrepreneuring researchers.

Instead of singling out and supporting good researchers wherever they are found, the Malaysian approach is to anoint some universities with RU status and shower them with special grants. Innovators in non-research universities are thereby prejudiced.

> Research has various components: Capacity, productivity and utility.

The first (capacity) can be developed. Sadly, often it becomes an end in itself. The second (productivity) does not necessarily follow from the first. The third (utility) is often lacking. A great deal of research has no impact on the alleviation of the problems of society. Prestige and profit override public purpose. We need better criteria for research grant eligibility.

> Seeking best students: At the risk of sounding heretic, I wish to say that this modern obsession with seeking “the best students” is not conducive to social justice. Highly motivated, intelligent and articulate students make teaching a pleasure.

But what is even more satisfying is to take ordinary students and convert them into extraordinary persons; to mould ordinary clay into works of art.

It is submitted that entry points should be flexible. They should be based on holistic criteria. They should take note of initial environmental handicaps. They should be cognizant that equitable access to knowledge is a factor in sustainable development. They should further the university’s role to assist in social and economic progress; to cut poverty; to help the disadvantaged.

Entry points are less important than exit points. How a student ends the race is more important than how he/she began it.

All universities should be required to run some remedial programmes for under-achievers and to practise affirmative action for all marginalised sections of the population.

> Over-specialisation: Our system is committed to teaching more and more on less and less. Production of enough professionals and technocrats for the industries and the job market is an overriding role. However there is clear evidence that half or more than half of the graduates end up in roles outside of their university training.

In an age of globalisation, economic booms and busts, and high unemployment rates, there is a growing disconnect between what students study and what their subsequent careers are.

It is therefore, necessary to train students for multi-tasking, multi-disciplinary approaches; to have split-degree courses; and to produce graduates who have career flexibility and who are able to adapt to different challenges at work.

> Community service: Universities must serve society and not just by producing graduates for the job-market. All university courses must have an idealistic component and must straddle the divide between being people-oriented and being profession-oriented.

The curriculum must be so devised that staff and students are involved in the amelioration of the problems of society, in schemes for eradicating poverty, protecting the en-vironment, providing fresh water, storm control, protection from disease, adult education and free legal, medical, commercial and technical advice.

Tailor-made, short term courses for targeted groups should be devised to enrich lives. These courses should have no formal entry requirement. Town-gown relationships should extend to links with NGOs, GLCs and international groups that are involved in wholesome quests like environmental sustainability.

> Globalisation: Internatio­nalisation of knowledge is crucial for humanity’s advancement. However, to be truly global, we must not ignore citadels of excellence in Japan, Korea, China, India and Iran. It retards our progress and prevents us from addressing problems peculiar to our clime that our tertiary education suffers from a debilitating Western bias. Our course structures, curricula, textbooks, and icons are all European and American. It is as if the whole of Asia and Africa is and always was an intellectual desert. The opposite is true.

Asian universities must build their garlands of knowledge with flowers from many gardens. That would be true globalisation.

Comment
By Prof Shad Saleem Faruqi

> Shad Saleem Faruqi is Emeritus Professor of Law at UiTM 

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Malaysia lures for its Gen Y youths?

KUALA LUMPUR: Gen Y youths young people usually recognised for their savvy in communications, media, and digital technology will benefit from the Government's move to draw quality high-tech and knowledge-driven investments to the country.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed said with the Government's emphasis on developing the 11.4 million youths who make up 46% of the nation, it was important for Gen Y workers to have access to companies with good training, exposure and salaries.

“The Government is adopting new methods by looking beyond hard FDI (foreign direct investment) numbers,” he said here yesterday.

“Services companies are becoming more crucial to our economy, and their presence in Malaysia is relevant to the young through their (the companies') job creation.”

Mustapa said the Government was not only giving out fiscal incentives, such as tax holidays and training grants, to attract quality investments, but had also liberalised 18 services sectors this year, to follow the 27 in 2009.

He said such measures had yielded “fruitful results” with companies like Service Source, test and design company National Instrument and computer multi-national Hewlett Packard, employing large numbers of Gen Y workers.

“Service Source, a recurring revenue management company, came to Malaysia in 2010 with only 27 people.

“Last June, it surpassed 550 staff the majority being graduates or diploma holders and more than half of them are below 30.

“National Instrument is another sterling example. It offers a salary scheme to graduates equivalent to that offered by some investment banks in Malaysia,” Mustapa added.

The Jeli MP emphasised that FDI was particularly relevant to Gen Y, as the creation of employment and knowledge spillover from foreign companies allowed youths to be exposed to new technologies and cutting-edge training schemes.

He said these companies offered competitive salary packages.

“This will increase their knowledge in the industry and improve their employability,” he said, giving the example of oilfield services corporation Halliburton, which sends fresh graduates to their training centre in the United States for up to 18 months to gain specialised knowledge.

However, Mustapa said, there were challenges to attracting such investments.

“Some companies are not willing to pay more for talent, and so might face a higher turnover rate.
“There is also competition for FDIs from countries that offer bigger incentives or huge domestic markets.

“However, Malaysia offers a value proposition as we have a sound infrastructure and legal system, investor-friendly policies, and a talent pool that will be able to complement investors.”

International Trade and Industry Minister Datuk Seri Mustapa Mohamed has been working hard to bring in investments that Gen Y can benefit from. 

In an interview, he talked about the government's approaches and challenges faced.
Excerpts from the interview:

>What do you think of the state of Malaysia's economy?

There lots of of challenges globally and regionally. Europe is still in some trouble, America is not out of the woods yet. India is going through a difficult period politically and economically as well - there was a time where India was very bullish. Although growth is still good there, it's not that good as a year and a half ago. China is still going strong. The bright spots will be ASEAN, Africa, the Middle East.

Against that backdrop, our performance has been quite credible, our economy is doing okay, steady growth that is higher than the world's average. Unemployment rate is low, inflation is manageable, we have an issue with the deficit which is being managed well by the govt. We have strong reserves. Our fundamentals are strong.

Some factors leading to Malaysia's relatively strong state of economy are the fiscal stimulus, the Economic Transformation Programme, our diversified economy, and robust customer spending.

>Do you think the youth population of Malaysia will benefit from our economy?

Yes, our employment opportunities will of course benefit mainly young people. Many come out from universities and expect to get a job, a good job. Some come out and do temporary work, which is useful - working in a hypermarket or petrol station, for example - these are very important stepping stones as they allow you to get some experience.

Our graduates are not as selective as before, they are prepared to accept these jobs to sustain them for a few years before moving on to a better-paying one. Gen Y represents a big percentage of the Malaysian population, and the Government is mindful of the fact that this is a volatile and dynamic component of the population.

The issue is quality employment. Graduates being paid RM2,000 is not true reflection of what they can contribute. Some companies are not paying their graduates too well, some graduates are accepting jobs which require lower qualifications and for that reason salaries are lower.

Job opportunities are plentiful, that's not an issue here. We have lots of job opportunities in Malaysia but the challenge for us in government is to generate more quality employment opportunities.

From anecdotal evidence, many graduates are not happy with the entry-level salaries. That's why Budget 2013 focuses a lot on young people, including measures such as the Graduate Employability Taskforce with an allocation of RM200mil. This isn't new, we have Talent Corp, we have collaborated with various institutions like Mida to help young people.

We also have the 1Malaysia Training Scheme Programme (SL1M), which will increase the employability of graduates through soft skills and on-the-job training in private companies.

From MITI's point of view, our job is to stimulate investment, both domestic direct investment and FDI. We have been working very hard.

In an average year, the companies approved by the Malaysian Investment Development Authority (Mida) will normally generate about 100,000 new job opportunities. The ETP over the next 10 years will generate 3.3 million jobs, that makes 330,000 a year. That's the kind of number we are looking at, and many of these jobs will b available to young people.

>Are we making steady progress towards this goal?

Definitely. There's a company out there, Service Source international - they started small here but when I saw them two weeks ago they had a headcount of more than 500. Their plans are to add more. This is a company of graduates, most of the staff are either diploma-holders or local graduates.

Service Source have also launched a Protg Programme in the company where many fresh graduates are given on the job training at an executive pay package.

Another of fruitful result, is a company in Penang called Agilent which has 2,800 people. 900 of them work in research and development.

In Iskandar you have Legoland, people who work in these places command high salaries.

Of course in sectors like banking and finance they will be well-paid, there has been good growth in Islamic banking and finance in the country. As Islamic finance in Malaysia grows, as the country becomes a hub for the region, there are more opportunities created for young people.

>Why are foreign direct investments relevant to the young, particularly to Gen Y?

The creation of employment - without jobs, our youth will not find an opportunity to improve their economic standing.

Panasonic, for example, employs 20,000 Malaysians as executives and also as blue-collar, factory workers.

The other reason is knowledge spillover as a result of forward or backward linkages with foreign companies possessing high technology that invest in Malaysia, our youth will be exposed to new technology on their job. This will increase their knowledge in the industry and improve their employability as they move further in the industry and perhaps opportunity for them to carry out their own business operations as a vendor to the foreign investor.

Halliburton, one of the world's largest providers of products and services to the energy industry, provide specified training to its fresh graduates from six to 18 months while they are on the job.

They also send these Malaysian fresh graduates to Halliburton Technical Training Centre in the United States. This is an example of how knowledge spillover from FDI can benefit our youth.

>What is the Government doing to attract quality investments? 

We are more focused now, more targeted. We can't compete with some of our neighbours in terms of wages, but where we can compete are the areas where companies require higher skills, productivity. We target companies that are high-tech, knowledge-intensive companies.

The Government is considering GNI creation of any project or investment while also using employment creation as a complementing tool to measure a “good investment”.

In giving out fiscal incentives such as tax holidays and training grants; the Government targets knowledge-driven, research and development based companies that budget a large amount on capital spend on technology per employee.

We have to look at the supply side as well, increase the supplies of trade and human capital.

The Government liberalized 27 services sectors in 2009 and a further 18 services sectors in 2012. The intention behind this is to drive foreign investments which can create quality, high-paying jobs.

While recording low investments, services companies are becoming more crucial to our economy and their presence in Malaysia is relevant to the young through their job creation.

>Have these approaches been fruitful?

Yes, along with companies I already told you about, there's National Instrument - another sterling example, a test-and-design company. NI Malaysia offers a salary scheme to graduates that is equivalent to the salary schemes offered by some of the investment banks in Malaysia.

More importantly, it has a unique internship programme formed in 2009. In 2012, they admitted around 30 graduates and these interns were trained in R&D and manufacturing as well as IT applications.

There is also Hewlett Packard, which has its Operation Headquarters for Asia-Pacific here. We gave them a tax holiday - one of the ways we are attracting investments, as you asked before.

>But how do you know these foreign companies will hire fresh graduates rather than someone who has already been in the workforce for a while?

Well, some companies do prefer to take people from other companies rather than train fresh graduates. There are different ways to do it, and some companies to tend to take the easier way out. But I feel they should invest in youth, employ them, train them. The companies must play a better role in training youth, it can't just be left to the Government.

I'll bring up SL1M again - we've found that our graduates become much more employable after learning these soft skills - they become more proactive, more aggressive, more forthcoming. The government is doing that, but we urge and strongly encourage companies to play a more active role and train its new recruits.

>Are there any challenges when it comes to attractive quality investment?

It's a chicken and egg issue - companies will come here if we have a large pool of skilled graduates and manpower, and that will bring in more investments as well. On the other hand, if the skills are not available then they will not come. We need to increase the supply of human capital.

Companies operate on cost factors and many companies that are interested in Malaysia are still looking at low cost factors in Malaysia. Some companies are not willing to pay more for talent.

There is also competition for FDIs, Singapore, Hong Kong and Taiwan offers bigger incentives and has very liberal policies while countries such as Thailand, Vietnam and Indonesia continue to offer a huge domestic market which interests investors.

However, I am convinced that Malaysia offers a value proposition as we have sound infrastructure and legal system, investor-friendly policies and a talent pool that will be able to complement investors.

>What are some of the challenges a company may face in recruiting Gen Y workers?

In general, those companies which offer lower salaries are not so good with attracting good people. Those which are willing to pay a little more have better luck.

>Do you think these companies would be more inclined to hire expats?

In general, bringing in expats costs money, and if you add up, it will almost certainly be more than what you pay a local.

>Would local graduates be making more if they took their skillset overseas?

If you factor in other costs - rent, transport, cost of car... We found that at the top level, the gap is not that wide. Malaysians earn a decent income. The problem is the entry rates at base levels, entry point salary is where the difference is.

Once Malaysians leave, it is harder for them to come back because they've made friends, settled down, become part of the community. If our entry level salary is low, and because of that people work overseas, it will become even more challenging to build this talent pool.

In my view, if companies have better entry-rate salaries, it will help to prevent brain drain, and also solve some problems companies have when hiring.

>Do you think that the development of our Gen Y will meet the Government's aspirations of attracting quality investments?

In a way, some of our measures are short-term. We need more medium and long-term solutions, for example, reform the education system. It needs to be more hands-on, so we've got some measures like the National Education Blueprint.

We also need to regularly change the curriculum in schools and universities. Malaysians have to develop a love for skills, fight to get a job.

I would like to relate to you a story of a young girl by the name of Nani Abdul Rahman. She is an alumni of Yayasan Khazanah, which I chair. She read Law at IIUM and in her penultimate year, she interned at Khazanah. Khazanah Nasional offered her a job as an analyst and after working for a few years, she got an offer to do her Masters in Jurisprudence at Harvard University. Today, she is a senior personnel at one of the biggest Islamic banks in the world.

I have complete trust in our Gen Y. They are very confident and well exposed generation.

>How do MNCs feel about local graduates? Do they prefer those who graduated from foreign universities, Ivy Leagues and similar?

Some of our local graduate are good, some are outstanding. Many of our top corporate figures were trained in this country. Not every top corporate guy studied overseas. I don't think companies have a preference, it does depend on the person.

If you're a foreign university graduate but you're quiet, timid, aloof - the company will not want to take you on. It is the qualities a person holds.

Companies are looking for a person who is outgoing, passionate, ready to learn, good work ethics... These characteristics can come from a local or foreign graduate.

>You hold the importance of education in very high regard. 

Yes - even within my community in Jeli, the constituency I am MP for, I focus on developing human capital.

I run and fund the Darul Falah programme, which provides free tuition for students between 10-12 every Friday and Saturday. The focus is on English, Maths and Science.

The centre actually operates out of my house in Kelantan, it started about 15 years ago. I also have three other centres which have been up and running for three years now.

It is important in a rural area like Jeli, the children get some exposure. There has been improvement, but I am still not happy with it.

The programme has expanded to offer free computer classes, we hold camps, essay writing competitions in both Malay and English - I give prizes to the winners.

Last year when I was in Perth for work I met a number of students and one of them, a JPA scholar, came to me. She said she was an alumni of Darul Falah. Her father was a customs officer who used to send her back and forth on a motorcycle to Darul Falah when she was 10.

She is now a scholar reading Commerce at the University of Western Australia and she aspires to be a Partner at PriceWaterhouseCoopers.

It's moments like those that underline my conviction that education is the best investment.

>Do you have any advice for Gen Y looking to make a living in Malaysia?

Be prepared to start small, meaning, accept any job and learn while doing it. Shine in your job, by which I mean outshine others.

Discipline and passion are very important qualities. You need to be disciplined. Work ethics, passion - in my view, these are qualities some graduates are lacking. Passion and commitment are important.

The technical knowledge you earned is important, of course, but so are passion, discipline and commitment.

By TASHNY SUKUMARAN tashny@thestar.com.my

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