Taking Malaysian Productivity from the Industrial Era to the
Knowledge Age
Dato’ Mohd Razali Hussain
The Perdana Leadership Foundation CEO Forum
24th September 2014
Knowledge Economy Definitions
The knowledge based economy” is an expression coined to describe trends in
advanced economies towards greater dependence on knowledge, information
and high skill levels, and the increasing need for ready
access to all of these by the business and public sectors.
Knowledge Economy as production and services based on knowledge-intensive
activities that contribute to an accelerated of technical and scientific advance, as
well as rapid obsolescence.
Source: Annual Review of Sociology Vol. 30, (2004), pp. 199-220
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Productivity House
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Source: Productivity Report 2013/2014
GDP Growth and Contribution (%)
Sources: (i) Department of Statistics, Malaysia
(ii) Total Economy Database, The Conference Board
4
Major Reports on Competitiveness
2014 (12/60)
2013 (15/60)
Released: 22nd May 2014
The Global Competitiveness Report by
World Economic Forum (WEF)
2014-2015(20/144)
2013-2014 (24/148)
Released: 3rd September 2014
2014 (6/189)
2013 (12/185)
Released: 19th October 2013
Global Innovation Index by INSEAD
2014 (33/143)
2013 (32/142)
Released: 3rd July 2013
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Malaysia ranks
Productivity, Income &
competitiveness
• Ease of Doing Business (EODB)
 6 /189 countries ,
• WCY 2014
 12 / 60 countries (overall).
• Income
 45 / 60
• productivity-wise
countries
 47 out of 60
GDP Per Employee (PPP, USD)
How do we
retrieve the
‘outcomes’ of
being top rank in
competitiveness?
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Source: EODB 2013, World Bank, WCY 2014
Productivity led growth
to push Malaysia out of efficiency driven stage
45,000
GDP per Capita (current US$)
40,000
Hong Kong
35,000
30,000
25,000
15 years
17,602 (4.6%)
4 years
20,000
Innovation Driven
10,000
9,000
10,275
(6.2%)
9,055
(4.5%)
Transition
10 years
3,429
5,000
3,000
15,466
(5.6%)
High Income
18 years
10 years
15,922
(4.4%)
17,000
15,000
18,657
(4.7%)
Korea
15,245 (2.3%)
6 years
9,371(2.6%)
Chile
10,058(2.7%)
Malaysia
7 years
14 years
3,244
3,628
Efficiency Driven
3,080
19 years
-
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Malaysia’s performance in
ICT Global Innovation
Index 2013
The telecommunications services
industry has matured and is able to
generate higher added value through
product and service innovation
Source: Productivity Report 2013/2014
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Malaysia’s Productivity Challenges : Technological capability
86% of Malaysian firms are Adopter /Adapter - focus on incremental innovation
TIC Level
52.2%
36.2%
5.3%
Ability to create new
technology/ significant
improvement on
existing
process/technology
6.3%
0%
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Technological Readiness
Taiwan
Singapore
Malaysia
Korea
Hong Kong
Chile
Canada
Australia
0
1
2
3
4
5
6
Score
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10
Labour market Inefficiency
•
Foreign - low wage and low skilled support Malaysia’s large &
export oriented enterprises
•
2013
Percentage of Foreign Workers, 1982-2013
13.8%
1982
11.9%
Malaysian Manufacturing’s ability to transform
itself to being ‘high-income’ status ready is being
prevented by over-reliance on foreign workers
95% of foreign
workers are
production
workers
2011
1999
11% 1997
9.8%
6.3%
30% of workforce in the manufacturing
sector are foreign workers .
95% of foreign workers are production
workers.
2009
1995
Nearly 30% of Workforce are foreign
workers
Source: i. Department of Statistics,
ii. Study on Transformation Strategy for Labour Intensive
Manufacturing Industries in Malaysia by Frost & Sullivan Malaysia
22% by
medium
70%
employed
by large
5% are
skilled workers
5 industries with reliance
higher than 25%
7 industries employ 74% of all
foreign workers
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•
•
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Get to know about productivity
Sharpen your productivity knowledge
All you need to know about productivity
•
•
Where we are in the global ranking?
Malaysia’s position against the worlds’
most competitive countries
Snapshots of Malaysia’s position in
the international ranking
•
•
•
•
•
National Policy on the Development
and Implementation of Regulation
Ease of Doing Business
Business Enabling Framework :
Comprehensive Scanning of
Business Licenses
Industrial Sector Regulatory Review
•
•
•
Let us show you the way on how to optimise your resources
Creating value for your business through customer focus
Innovate your process to improve efficiency
•
Analysing your business using MPC productivity assessment
tools
Your one-stop business health-check
Evaluating your performance for business sustainability
•
•
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Contradiction?
Both @ Balancing
Value Innovation
Local
Human
Long Term Strategy
Systemic Regulation Reform
Value Creation
Cost Reduction
Foreign
Technology
Action
Strategic Regulation Reform
Eliminate waste
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THANK YOU
www.mpc.gov.my
Malaysia Productivity Corporation ( MPC)
Lorong Produktiviti, Off Jalan Sultan,
46200 Petaling Jaya,
Selangor Darul Ehsan.
Malaysia
Tel : 603 - 7955 7266 | Fax : 603 - 7957 8068
Email : marketing@mpc.gov.my