Penang’s E&E ecosystem the draw for National Instruments
By Karamjit Singh April 30, 2013
- Innovation from Penang facility being shared globally
- Has various programmes to deepen interest in STEM
THE vibrant electronic and electrical (E&E) ecosystem of Penang is what drew Texas-based National Instruments to establish a pilot initiative it had not done before in Malaysia’s northern state in 2009.
“We wanted to launch both a manufacturing and an R&D (research and development) facility here,” says Scott Rust (pic), vice president of R&D Engineering for National Instruments (NI).
NI says its graphical system design approach provides an integrated software and hardware platform that simplifies development of any system that needs measurement and control.
The company was drawn to Penang because the state was already doing many things well, including its vibrant ecosystem of small and medium enterprises (SMEs) and large number of trained engineers.
“We are building a world-class organization here that has already built very high quality products and whose innovative ideas are being shared around our global sites,” Rust says.
While satisfied with the progress of NI in Penang so far, he does wish that design work had been going on in Penang for much longer so that the ecosystem would be even more mature for NI to tap into.
Rust likes what he sees so far of having R&D and manufacturing next to each other, and in the talent, both fresh and experienced, which he rates as being on par with any talent NI has globally, citing this as one of reasons the company came to Penang.
“There is lots of synergy in having the engineers who design the products sit next to manufacturing. Our manufacturing engineers can quickly offer feedback on how to better design the products to make them easier to manufacture,” he says.
NI came here against a backdrop of a global economic crunch with the offshore units of multinationals having to justify their continued presence from a cost perspective. And Penang was not cheap anymore.
NI’s approach when making any offshore investment is to take a long-term approach that balances needs of all stakeholders which include staff, suppliers and its customers. It looked at many factors before coming to Penang, especially since it was about to try a never before co-location of manufacturing and R&D.
“Our products require a lot of Intellectual Property (IP) and that sits in the minds of our employees. It is not easy to uproot that and take it elsewhere.
“But if you just look at one dimension, the labour cost, then yes, you are driven to move to a cheaper location -- but when you think of the disruption this causes to your ability to develop innovative products, then it is actually damaging to the whole balance,” says Rust when asked about relocating to a cheaper country.
“Our high gross margins enable us to take the long-term view in our investments overseas and I think we will be offering high-value R&D jobs in Penang for a long time,” he adds.
Although MNCs tend not to disclose how many engineers they have, especially in R&D, Rust shares that the target is to have 250 R&D engineers within five years of operations, which means this will be hit next year.
Those jobs clearly need high quality talent and one of the questions Rust poses is on the range of talent Malaysia produces. Is the talent consistently high, or is there a broad range? Is the university system creating enough talent?
Which is why he professes to being excited about the creation of the Centre for Collaborative Research in Engineering Science Technology (CREST), which aims to deepen the pool of world-class engineering and science talent in Malaysia.
“It’s an innovative effort with the Government realising it needs to make certain investments, but with close cooperation from industry to really make it valuable. NI is really happy to be a part of this initiative,” he says.
With STEM (Science Technology Engineering and Math) being at the core of the value that NI delivers to its customers, the company has similar efforts as Agilent Technologies in promoting an interest and love for engineering to kids.
“That’s the first challenge, getting kids interested in engineering and science and hopefully pursuing a career in this,” says Rust.
To help encourage them down this path, NI has its Lego Mindstorms robotics programme where kids learn to use NI’s software to control robots in a fun environment.
Children get their first taste of working with technology and learn by doing. In the process, they hopefully get excited about learning more about math and science, which propels them to a career path in engineering.
Naturally, there is also a key focus on working with universities. In fact, the very reason NI was formed was because its co-founder and CEO Dr James Truchard wanted to solve some of the problems he had around instrumentation.
“So, universities have always been a cornerstone in our history and we have wide range of programmes with them,” says Rust.
In Malaysia, this includes an existing programme with an initiative called Innovate Malaysia, where teams from different universities propose projects and compete with each other. This has seen tremendous response, says Rust.
And then there is the sponsoring of five labs at Universiti Tunku Abdul Rahman and Universiti Malaysia Pahang (UMP).
The labs at UMP include RF (radio frequency) wireless activities, chemical engineering, agriculture engineering, robotics and mechanical engineering. “All are using our Graphical System Design platform and it is very exciting to see what people come up with when you give them these tools,” says Rust.
“At the end of the day, we want people who can think and not just do what the professor told them. Having that foundation in knowledge and demonstrating you can think through problems means you have ability to learn and grow on the job and keep doing great things here at NI,” he adds.
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