Page 1 of 9

Advances in Social Sciences Research Journal – Vol. 11, No. 1

Publication Date: January 25, 2024

DOI:10.14738/assrj.111.16271.

Abu Bakar, M. Z., Jaafar, J., Muhamed, A. A., Rahman, A. A., & Rasedee, A. F. N. (2024). Leveraging the Industrial Collaboration

Program for Malaysia's Aerospace Industry. Advances in Social Sciences Research Journal, 11(1). 199-207.

Services for Science and Education – United Kingdom

Leveraging the Industrial Collaboration Program for Malaysia's

Aerospace Industry

Mohd Zamri Abu Bakar

Faculty of Business and Management,

Universiti Teknologi MARA, Malaysia

Jefiena Jaafar

Technology Depository Agency Berhad,

Putrajaya, Malaysia

Ariff Azly Muhamed

Faculty of Business and Management,

Universiti Teknologi MARA, Malaysia

Azlin Abdul Rahman

Malaysian Institute of Aviation Technology,

Universiti Kuala Lumpur, Malaysia

Ahmad Fadly Nurullah Rasedee

Faculty of Economics and Muamalat,

Universiti Sains Islam Malaysia, Malaysia

ABSTRACT

The Industrial Collaboration Program (ICP) in Malaysia serves as a pivotal strategy

for economic growth, technological advancement and aligning to propel Malaysia

towards a high-income knowledge-based economy. The objective of this study is to

examine the present strategic efforts of Malaysia's Industrial Collaboratives

Program in the context of the country's aerospace industry. The study specifically

focuses on the development of a knowledge-based economy, the establishment of a

global supply chain, and the creation of employment opportunities. It offers a

comprehensive comprehension of the industry's potential and the crucial

significance of partnership between the government and the industry. Preliminary

findings indicate that the ICP has significantly contributed to skill development,

technology upgrades, and has spurred research and development (R&D) activities

in other key sectors such as automotive, and electronics. The study emphasizes the

importance of strategic planning, robust governance, and continuous improvement

to maximize the ICP's benefits specifically within Malaysia aerospace ecosystem.

Keywords: Industrial Collaborative Program, Aerospace Industry, Technology Transfer,

Global Supply Chain, Knowledge Transfer.

Page 2 of 9

200

Advances in Social Sciences Research Journal (ASSRJ) Vol. 11, Issue 1, January-2024

Services for Science and Education – United Kingdom

INTRODUCTION

In the evolving landscape of global industrialization, the Industrial Collaboration Program (ICP)

stands out as a cornerstone of Malaysia's economic strategy, designed to bolster the nation's

competitive edge in the global market [1]. The ICP is a policy-driven initiative aiming to foster

partnerships between the government, local industries, and international players. Its primary

objective is to enhance technological capabilities, stimulate research and development, and

ensure sustainable economic growth by leveraging the strengths and resources of both public

and private sectors [2]. ICP in Malaysia operates by mandating that significant government

procurements and investments are linked with value-added, technology transfer, or capability- enhancing conditions [3]. These conditions are tailored to boost local industry capabilities,

enhance employment prospects, and stimulate the economy. The program is not just a policy

but a comprehensive ecosystem involving various stakeholders, including government bodies,

industry leaders, technology providers, and educational institutions, working collaboratively

towards a common goal of industrial and technological advancement.

As of May 2023, Malaysia has witnessed the inception of 135 ICP programs encompassing a

total of 571 projects [4]. These projects span across 15 different sectors, illustrating the

program's extensive reach and multi-sectoral impact. The breadth of these sectors includes

critical areas such as aerospace, automotive, defense, and information and technology, among

others. Importantly, these initiatives have directly benefited 771 recipients, a testament to the

program's expansive and inclusive nature. The beneficiaries range from large corporations to

small and medium-sized enterprises (SMEs), reflecting the ICP's commitment to fostering

growth and development across the entire industrial spectrum [2]. Through strategic

partnerships and collaborations, Malaysian companies are introduced to global business

networks, enabling them to export their products and services, thereby increasing their market

reach and competitiveness. A significant aspect of the ICP is fostering technology transfer and

adoption of advanced manufacturing techniques. By collaborating with multinational

corporations and foreign investors, local companies gain access to new technologies, expertise,

and best practices, crucial for upgrading their operations to meet international standards.

Developing the aerospace industry through the ICP aids in economic diversification, reducing

reliance on traditional sectors [4]. It creates high-value jobs, attracting and retaining talents in

engineering, design, and other high-tech areas. This not only contributes to economic growth

but also helps in building a resilient economy capable of withstanding future shocks.

Leveraging the aerospace industry via the ICP can be a significant part of this strategy. The

Malaysian Aerospace Industry Blueprint 2030 reflects the government's ambitious vision to

propel Malaysia to the forefront of the aerospace sector both regionally in Southeast Asia and

globally [5]. The primary goals are to establish Malaysia as the leading aerospace nation in

Southeast Asia. This involves excelling in various aerospace activities, including manufacturing,

MRO (Maintenance, Repair and Overhaul), engineering, design, and training. The blueprint

targets an aeronautical activity of approximately 12 billion USD per year by 2030 [6]. This

growth is expected to come from expanded manufacturing activities, increased MRO services,

and higher exports.

Page 3 of 9

201

Horii, D., Kaneda, H., Okuda, E., & Sugiyama, Y. (2024). Quantitative Analysis of Qualitative Data on Factors Affecting College Students' Motivation

to Exercise. Advances in Social Sciences Research Journal, 11(1). 188-198.

URL: http://dx.doi.org/10.14738/assrj.111.16271

Fig.1: Malaysia Aerospace Ecosystem Adapted from [6]

The purpose of this paper is to c analyze the impact and strategic significance of the Industrial

Collaboration Program (ICP) in the advancement and transformation of Malaysia's aerospace

industry. This study aims to provide a comprehensive analysis of how the ICP initiatives have

influenced technological development, economic growth, global supply chain integration, and

human capital enhancement within the aerospace sector in Malaysia.

LITERATURE REVIEW

Knowledge Based Economy

Malaysia is actively facilitating technology transfer and commercialization [7]. By forming

strategic alliances with global firms and investing in technology-intensive projects, the country

acquires advanced technologies and know-how. Commercializing these technologies leads to

new products and services, thereby creating higher value in the market [8]. For a knowledge- based economy, skilled human capital is indispensable. The ICP emphasizes enhancing the

quality of education and training, focusing on Science, Technology, Engineering, and

Mathematics (STEM) fields, and fostering lifelong learning. By aligning educational outcomes

with industry needs, the program ensures a steady supply of knowledgeable and skilled

workers capable of driving innovation and growth. This includes the skills, expertise, and

creativity of the workforce. Investments in education, continuous learning, and professional

development are fundamental to enhancing the quality of human capital.

The aerospace industry, known for its high technology and stringent safety standards, serves

as an excellent example of how Malaysia can leverage ICP to bolster its economy in the post- COVID-19 era [9]. Through collaborations under the ICP, Malaysia's aerospace industry can

acquire advanced technologies and expertise from leading global players. This includes

everything from aircraft manufacturing to maintenance, repair, and overhaul (MRO) services.