Cheska Tatiana Ridzuan, Arlene Teo and Meor Muhammad are just some of the millennials that work at PEMANDU Associates. Watch our latest instalment of BFR Untold as they share their thoughts on being a millenial in a consulting firm.
By Yong Yoon Kit and Khairunnisa Ghazali
It is an expansion of the traditional Meetings, Incentives, Conferences and Exhibitions (MICE) sector by interconnecting with activities within the tourism sector of the host country. Attracting business tourists to attend events at a host country is crucial as over 25% of international delegates are likely to bring their spouses along with approximately 65% of these delegates returning with family and friends in the future (Economic Transformation Programme [ETP] Lab Report, 2010).
Business tourism itself had a larger multiplier effect to the economy. Furthermore, it was less affected by seasonal price fluctuations and was typically used to reduce the ‘peak-trough’ differences in the year.
However, Malaysia was trailing behind Singapore, Indonesia and Thailand in the business tourism sector as events in Malaysia were mainly fuelled by small to mid-sized local and regional conference events. This presented a strong case for Malaysia to develop and be positioned as a leading business tourism destination to attract high-quality international events with large numbers of delegates. This, in turn, was targeted at translating into higher receipts quantitatively as well as generate qualitative benefits in terms of enhanced trade and know-how. It was estimated that for every RM1 spent by the government of Malaysia, there was a return-on-investment of RM111 in revenue obtained by the business tourism industry (ETP Lab Report, 2010).
The Malaysian Convention & Exhibition Bureau (MyCEB) that was set up in 2009 was specifically formed to drive the growth of the business tourism ecosystem in Malaysia. To help formalise its operations and funding from 2010 onwards, business tourism became one of the Entry Point Projects (EPP) under the Tourism National Key Economic Area (NKEA), one of the sectors identified under the National Transformation Programme. The Tourism NKEA had an ambitious goal of growing the business tourism sector to reach an 8% share of total tourist and international delegate arrivals by 2020 from a baseline of 5% in 2009.
Detailed Action Steps and Solutions Undertaken
Three main approaches were taken by the government to develop the sector:
Strengthening core operations to drive the industry
Provision of adequate funding to develop the sector
The Performance Management and Delivery Unit (PEMANDU, now a private entity known as PEMANDU Associates), then part of the Prime Minister’s Department of Malaysia, played a pivotal role in securing adequate funding from the government for MyCEB’s operations and development of the industry. The subvention funds issued by MyCEB to the private sector were allocated via a stringent mechanism and careful monitoring to ensure these funds were utilised to support achievement of the number of tourist arrivals and yield.
Implementation of a robust monitoring mechanism
This EPP’s progress was tracked via a stringent monitoring mechanism put in place by PEMANDU. Robust Key Performance Indicators (KPI) were crafted to drive achievement of the desired outcomes for this project. The indicators measured were primarily focused on the number of international delegates secured for each event and the estimated economic impact from the events hosted. The progress in achieving the KPIs were reported monthly while implementation issues were reviewed and resolved on a weekly basis.
Change of event management to maximise tourist yield
Taking a step further from event organisation, additional activities were conducted by MyCEB to tie the business events with other tourism activities. Cross-selling opportunities were taken where each event was provided pre and post-event tour options and delegates were clearly informed of the tourist activities available in order to maximise yield.
Coordination of players
Leveraging on industry experts
Getting the private sector to take ownership in developing the industry together was crucial. Thus, the Malaysia Conference Ambassador ‘Kesatria’ Programme made up of key opinion leaders and industry experts was launched in 2012. The programme’s objective was to encourage potential local hosts to bid for and stage international conventions. 47 ‘Kesatria’ ambassadors have been appointed, generating 135 leads with the potential to bring in 200,000 delegates and an estimated economic impact of RM2.1 billion.
Improving government’s facilitation of the industry
In addition to the focused attention by MyCEB, the government played a strong role in facilitating the growth of the industry. A Steering Committee comprising representatives from then-Ministry of Tourism and Culture (MOTAC), Ministry of Finance, Ministry of Home Affairs, Ministry of International Trade and Industry, MyCEB, events-related associations and other relevant private sector stakeholders met monthly to review and problem-solve implementation issues on business tourism related activities. Notable issues resolved included immigration requirements for exhibition delegates and international speakers to improve Malaysia’s attractiveness. An inter-ministerial committee with representatives from all ministries was also set up in 2016 to coordinate the involvement of the government for the events to be hosted in Malaysia and minimise overlap of resources provided.
Providing an enabling environment
Capacity-building of the industry
In order to support the development of professional standards and skills training for event organisers, the Industry Partner Programme was established under MyCEB in 2011. This programme’s objectives were to provide access to market insights, encourage industry training and certification as well as facilitate co-operative marketing and promotions efforts. This activity was instrumental in ensuring a pipeline of capable event organisers who will be able to continue spearheading the industry.
Development of shell sites
Shell sites are required to host events such as gala dinners. Iconic shell sites can differentiate Malaysia from its competitors in other countries and provide a draw for organisers to host their events here. In Malaysia, no dedicated site existed as at 2010. Under this initiative, four shell sites were formally recognised comprising Central Market, Thean Hou Temple, Forest Research Institute of Malaysia (FRIM) and Maritime Centre Putrajaya.
Impact and Results
As a result of the concerted efforts spearheaded by MyCEB and supported by key stakeholders, business tourist expenditure grew at a CAGR of 16.3% from RM386 million since the launch of project in 2011 to RM954 million in 2017. The number of events secured annually also grew from only 49 in 2011 to reach 149 in 2017 with significant return of investment growth from 14.4 times in 2011 to a high of 47.7 times in 2017 (MyCEB, 2017).
In total, this EPP supported 2,013 events between 2010-2017 and attracted more than 943,146 international delegates to Malaysia, which translated to an estimated RM11.5 billion in economic impact to Malaysia. The share total arrivals from business tourism grew from 5% in 2009 to 7% in 2017 (ICCA, 2017).
Malaysia successfully secured and hosted various prestigious international events as exemplified below (list is non-exhaustive):
| No | Year | Notable events |
| 1 | 2011 |
|
| 2 | 2012 |
|
| 3 | 2013 |
|
| 4 | 2014 |
|
| 5 | 2015 |
|
| 6 | 2016 |
|
| 7 | 2017 |
|
| 8 | 2018 |
|
Hosting these international events increased Malaysia’s global recognition as a leading business tourism destination. In addition, this positively impacted various ancillary components such as accommodation, catering, logistics, events management as well as increasing the spillover effect for leisure tourism. In 2016, Malaysia was ranked 10th for business travel contribution in the World Travel and Tourism Council (WTTC)’s ranking. WTTC also reported that an analysis from Oxford Economics had shown that business travel spending in Malaysia was significantly higher than leisure travel and the average in the ASEAN region (WTTC, 2016).
As there was no dedicated body or initiative overseeing the development of this sector previously, the growth can be attributed to the success of this EPP under the Tourism NKEA.
Lessons Learnt and Recommendations
A key lesson learnt from this initiative is that it is highly imperative to have a dedicated body to spearhead the development of this sector and coordinate the various players from both the public and private sectors. Without a dedicated body to push the business tourism agenda forward, the initiative would not have been able to grow as rapidly. In addition, adequate funding support was critical to ensure continuous development as any reduction would directly impact the amount of subvention funds that could be provided, thus reducing the number and size of events that could be secured.
The involvement of private sector associations was also important to bridge the last mile in securing international organisers as well as provide the relevant expertise to ensure the success of the events. For example, the Malaysian Association of Convention and Exhibition Organisers and Suppliers (MACEOS) contributes to the development of this industry with its network and understanding of the industry, including the operations and execution of hosting international events. MyCEB plays a role to assist the association in market intelligence, bidding package and proposals to secure Malaysia as the host destination.
Another lesson learnt was that it was crucial to secure the support of other ministries and agencies. This is important as the involvement of the relevant ministry in charge, with the attendance of senior civil servants or the minister, serves as a draw for international event organisers. One of the ways to address this during the implementation phase was to create an inter-ministry coordination committee to coordinate the planning, securing, and organising of the business events hosted in Malaysia. This proved an important step in ensuring wider reach of MyCEB from only being under the purview Ministry of Tourism & Culture, to also work with various ministries which oversee policies such as industry development, the economy, immigration and trade.
Moving forward, PEMANDU Associates continues to have the view that a strong dedicated body to drive this sector is necessary, equipped with adequate funding and emphasising on recognised ROI, to support the growth of this industry. In addition, strong coordination and cooperation between the public and the private sectors is crucial to ensure the success of this industry.
By Ku Kok Peng and Mohamad Afif Abdullah
Global population is set to grow from the current 7.6 billion to 9.8 billion in 2050[1], with 70% living in urban areas[2]. The middle-income class continues to boom. By 2027, this segment is expected to reach 5 billion, representing 60 % of the global population[3].
This growth will be accompanied by an ageing population as the number of people aged 60 or above is expected to more than double by 2050, rising from 962 million globally in 2017 to 2.1 billion in 2050[4]. Life expectancy is rising, from 65 years for men and 69 years for women in 2000-2005 to 69 years for men and 73 years for women in 2010-2015[5], with further improvements expected moving forward.
These demographic changes point to greater demand for food, feed, fuel as well as consumer and health products, all of which can be fulfilled by vegetable oils, including palm oil. Maybe, things are not so bleak after all, but let’s examine the facts.
To meet growing demand, the world will inevitably see an expansion of land use for oil crops such as palm oil, soy, rapeseed, sunflower, coconut and others.
Palm oil is superior to other oil crops in respect of yield productivity. On average, oil palm yields about 3.5 tonnes from a hectare of land. Other oil crops such as rapeseed oil, sunflower seed oil, soya bean oil and coconut oil can only yield 0.8 tonnes/ha, 0.7 tonnes/ha, 0.4 tonnes/ha and 0.3 tonnes/ha respectively.[6] Hence, palm oil requires significantly less land to produce the same quantity of oil.
Yet, palm oil cultivation is facing immense pressure from environmentalists. In 2017, the European Parliament passed a resolution to ban palm biofuel from 2021 and to impose a single certification scheme for all palm oil entering the European Union, citing concerns on deforestation. Following tremendous protest by producers such as Indonesia and Malaysia, this stance was later softened to only exclude palm biofuel along with all other vegetable oil-based biofuel in 2030.
But is there basis for the allegations on deforestation? Statistics suggest not. In fact, livestock rearing is the main culprit while soy cultivation causes forest loss at almost double the rate for oil palm cultivation.
Moving forward, we will witness a combination of oil crops delivering environmentally optimal vegetable oil supply. Banning palm oil expansion may in fact worsen the environmental impact. A cost and benefit analysis for palm oil expansion conducted in 2013 by James Fry, a leading palm oil expert, showed startling results. Had a moratorium been imposed on oil palm cultivation in 2013, the world would have lost an incremental 145 million hectares of forest to make up for that loss of production. This stems from the need to expand other crops at a faster rate to close the supply gap from palm oil.
Given the worldwide population growth trend and the need to feed the population, there is no doubt that palm oil must and will remain in the mix. The more pertinent question is how palm oil planting can be expanded sustainably.
Sustainability must be the utmost priority in palm oil business. To co-exist symbiotically with the environment, the industry must prioritise a balance between economic development and environmental sustainability, avoid deforestation and optimise land use, protect biodiversity and adopt robust standards.
Teresa Kok, Minister for Primary Industries of Malaysia recently reiterated the policy of capping palm oil expansion to ensure 50% forest cover.[7] Such bold policy actions should be lauded as it signals commitment by the government to reduce deforestation and protect biodiversity in one stroke of policy.
Adopting sustainability standards is the most practical and impactful approach that can be taken by palm oil stakeholders. To date, the globally recognised Roundtable for Sustainable Palm Oil (RSPO) has certified total of 19% of palm oil produced across the globe. In complementary moves, Indonesia and Malaysia have both enacted their own national standards, namely Indonesian Sustainable Palm Oil (ISPO) and Malaysian Sustainable Palm Oil (MSPO). However, both certification schemes have yet to gain extensive acceptance, by both governments and private sector buyers.
The execution of sustainability policies must be well-coordinated among governmental units. This is especially when jurisdictions related to plantation and environment sit within different government entities or territories. In Malaysia, there is a need to harmonise environmental policies for the plantation and commodities sector under Ministry of Plantation Industries with other related environmental and land use policies under the purview of other Ministries.
For instance, protecting biodiversity requires the identification and demarcation of high value conservation (HCV) areas and collaboration between Federal Ministries and State Governments, as custodians of land matters, to put in place sustainable management plans. This may include working towards certification, or an outright halt to new plantations which may encroach into HCV areas through plantation licensing enforcement. Plantations and HCV areas can coexist and balance socioeconomic needs of rural areas and ecological preservation.
Higher yield necessarily means reduced land use but unfortunately, it is on a declining trend. In Malaysia, the national FFB yield has declined from 19 tonnes/ha in 2012 to 18 tonnes/ha in 2017.[8] The declining productivity was primarily due to labour shortages, slow replanting of old palms and therefore, slower regeneration of palms with higher-yielding planting materials. There is a need for faster replanting to create a new generation of oil palm areas that have higher yields and are more labour-friendly, leading to improved productivity.
Another key strategy is to accelerate the discovery of even more superior oil palm seedlings. Existing conventional breeding methods of cross-breeding and hybrid take a long time to show results, as it goes through a breeding cycle of about 10-12 years. The advent of genome editing (GE) can fast-track the new development of planting materials, cutting the long development duration and delivering better results. Desirable traits such as lower palm height, shorter fronds, longer fruit stalks, low-shedding fruits and disease resistance can become a reality significantly faster with the deployment of GE.
Labour productivity has increased in recent years in Malaysia due to increasing mechanisation. Productivity increased from 0.68 tons/day per worker to 0.88 between 2012 and 2017. Yet, more can be achieved through a combination of brownfield and greenfield approaches. The brownfield approach seeks to adapt, prototype and deploy existing mature applications from other crops or regions across the upstream value-chain. The greenfield approach, on the other hand, encompasses an end-to-end new system of production with deployment of digitisation, Internet of Things (IoT) and big data analytics. This is a long-term process requiring innovation and it is critical to get started right away.
Palm oil is a well-established source of green fuels and chemicals. The crop can do more in this role.
Despite efforts to eventually phase out fossil fuels from the transport sector, fossil fuels are here to stay for the foreseeable future. Therefore, there is still some room for growth for palm biodiesel. In Indonesia, domestic blending has been mandated at 20%, moving to 30% by 2019, while in Malaysia, renewed efforts certainly can be made to increase the current blending from seven% to 10% for both transport and industrial sectors.[9] [10]Elsewhere, commitments to the Paris Agreement by China and India to reduce their Greenhouse Gas (GHG) emissions per unit of GDP by 33% and 60%, respectively, by 2030 present an opportunity for biodiesel blending in both countries to decrease their GHG emission.[11]
Be that as it may, the future of palm biofuel is in advanced biofuel. It is a complete substitute for conventional fuel – fully compatible, mixable and interchangeable – without requiring any adaptation of the engine or infrastructure that can support all transportation modes, including aviation. This development will involve a longer gestation and significant investment, but it is a pursuit that must be made.
On the other hand, the global oleochemical market size is projected to hit USD30 billion by 2024 while the global nutraceutical market size is expected to be USD285 billion in value by 2021.[12] [13]The industry is moving higher up the value-chain by producing derivatives and phytonutrients used in major consumer and health-based products that will unlock more value from palm oil.
The beauty of palm oil is in its versatility and efficiency. Not only is palm oil a stable and healthy source of edible oils and fats, it also infiltrates every aspect of human life, encompassing foods, consumer and household products, fuels and lubricants.
As a global market leader, headwinds are only to be expected. The good news is palm can be even more efficient and sustainable, and that may just be enough for it to stay competitive for the long run. Wither, it will not.
[1] Source: United Nations Department of Economic and Social Affairs (UN-DESA)
[2] Source: Envisioning Malaysia 2050: A Foresight Narrative, Akademi Sains Malaysia
[3] Source: Brookings Institution
[4] Source: United Nations Department of Economic and Social Affairs (UN-DESA)
[5] Ibid
[6] Source: Ministry of Primary Industries, Malaysia
[7] Teresa Kok: Govt to stop oil palm expansion, keep 50pc land as forest | Malay Mail. (2018). Malaymail.com. Retrieved 5 September 2018, from https://www.malaymail.com/s/1669208/teresa-kok-govt-to-stop-oil-palm-expansion-keep-50pc-land-as-forest
[8] Source: MPOB
[9] Biofuels Policy In Indonesia: Overview And Status Report
[10] Malaysia Biofuels Annual Report by USDA Foreign Agriculture Service 2017
[11] Malaysian Biodiesel Association
[12] Grandview Research, 2016 (https://www.grandviewresearch.com/press-release/global-oleochemicals-industry)
[13] PEMANDU Associates Analysis
By Adlina Atikah Amran
In recent years, this has seen governments around the world adopting the ‘lab’ methodology as a problem-solving tool to catalyse transformation. In essence, labs are a facilitated environment that encourages robust discussions between various stakeholders to develop solutions for specific issues. This setting allows for innovative ideas to take shape which can yield positive outcomes. These ideas will then lead the team to pursue a process, agenda or programme to implement the idea with accountability, clear determinants of roles, budget and milestones to achieve success.
In Malaysia, thousands of people from various backgrounds came together in a series of labs to develop a socioeconomic agenda to transform Malaysia’s economy and uplift the lives of Malaysians. Utilised to plan, initiate and execute the National Transformation Programme (NTP), the labs were recognised as a ground-breaking approach for the country’s public sector to problem-solve, identify opportunities and implement socioeconomic reform. The labs created a collaborative environment for stakeholders to identify problems, craft solutions, recommend initiatives and create a framework for transformation for its robust implementation. It helped break down silos between agencies and bring input from subject matter experts to critically argue and resolve issues.
Through the labs, initiatives were developed to enable private sector participation in the economy, ensure sustainable public finance and increase the country’s GNI per capita. The programme’s initiatives, co-created by the public and private sector, positively impacted social development in the country, creating over 2.26 million new jobs and contributing to lifting 2.9 million individuals out of poverty as at the end of 2017.
In Denmark, the government established Mindlab in 2002 to initially carry out the task of breaking down silos between ministries and engage in service design projects, and later on manage more complex projects such as policy-making, reform and capacity-building. One of the pioneers of labs, Mindlab has inspired the set-up of many similar labs and methodologies.
In the view of Mindlab, the public sector has more indicators for success compared with the private sector: productivity, service, changes in behaviour and democracy. Therefore, Mindlab’s methodology is based on the use of ethnography and design methods such as prototyping and testing to create solutions in collaboration with citizens, businesses and government agencies. The co-creation process leads to the invention of designs which enables problems and opportunities to be reimagined.
Mindlab was initially intended to operate for a few years, but it succeeded in remaining relevant by focusing on current issues and always planning ahead of trends. Its reach across the government is unprecedented and has resulted in a major shift in how organisations think and work in Denmark.
In 2018, Mindlab was evolved and replaced by the Disruption Task Force, a unit set up by the Prime Minister of Denmark, to move Denmark’s public sector transformation to a new phase. This involved digitally reforming Denmark’s civil service, building on Mindlab’s legacy of enabling and encouraging recursive intervention to resolve issues and embedding the culture of innovation within the government.
In South Korea, Seoul’s Mayor Park Won-soon established the Seoul Innovation Bureau (SIB) in 2013 with the objective to transform Seoul into a city of innovation. The idea was brought about to bring radical changes across the government by getting ideas from citizens and working with departments to implement them. This is done with the aim to eliminate excessive bureaucracy. Thus, its key tool has been to engage citizens in getting ideas and sharing resources for city policies through its “Sharing City” initiative.
One of the most significant and popular citizen-led transformation facilitated by SIB is Seoul’s night bus. The idea was sparked by a citizen on Twitter, which was supported by many others. The SIB then used data from people’s phones in the planning of late-night bus routes, guided by the locations of 3 billion phone calls. Currently, the buses run on eight routes between midnight and 5am.
In 2018, the SIB will be launching a living lab to try out solutions for some of the most complex forces shaping the city – rising property prices, youth unemployment, healthcare, the sharing economy and technology. It plans to employ a combination of diverse methods to gather and test ideas via pilot projects, workshops and conferences.
The adoption of the lab methodology globally has shown how labs help governments deep dive into specific subject areas and get their implementation programme right at the start to ensure the success of their transformation agenda. However, whilst the labs are an innovative tool and environment to chart out a true north for any transformation agenda, it is only an initial step of a transformation.
The real work comes after a roadmap with clear deliverables, accountability and deployment of resource has been laid out, and discipline of action is practiced in executing the carefully designed programmes to achieve tangible and measurable outcomes. As demonstrated by global experiences, the implementation of public sector agendas can only succeed with the presence of clear accountability, rigorous monitoring and problem-solving in a recursive manner.
PEMANDU Associates coordinates and facilitates labs and provides assistance in monitoring implementation of public sector transformation and business turnaround. Our lab methodology, part of PEMANDU Associates’ BFR 8-Step Methodology, enables the delivery of solutions through robust analytics and discussions from a myriad of individuals involving the public and private sector, as well as subject matter experts. If you’d like to find out how a lab can be constructed and adapted to your needs, do not hesitate to contact our team of consultants at [email protected].
