Don: Prepare beyond ETP [New Straits Time (Malaysia)]
(New Straits Time (Malaysia) Via Acquire Media NewsEdge) KUALA LUMPUR: MALAYSIA is on its way towards achieving its targets set under the Economic Transformation Programme (ETP), which is to become a developed nation by 2020 by targeting a per capita income of US$15,000 (RM48,900).
However, it must prepare and devise a plan on what next to do and on how to sustain that growth for years to come.
Harvard Business School associate professor of business administration Diego Comin said it is time for Malaysia to think its next growth track to determine what type of country it wants to be post-ETP.
"To ensure sustainable growth beyond 2020, Malaysia has to stop relying on natural resources due to the volatile prices and limited supply and focus more on knowledge intensive sectors, where opportunities are self-generated, of which the more you know, the more opportunities arise.
"Malaysia has to strategise and devise a plan fit in the global economy after 2020 and to face the medium-term challenges," he told Business Times, here, yesterday.
Comin is here as part of Universiti Teknologi Malaysia visiting researchers programme to give talks to 700 Master's of Business Administration students at the UTM International Business School in Jalan Semarak.
He will also be meeting Prime Minister Datuk Seri Najib Razak tomorrow to give recommendations on what Malaysia can do to tweak and improve on the ETP after 2020.
"One way for Malaysia to sustain that growth post-ETP in 2020 is to bolster its knowledge economy in all sectors from information, communications and technology to oil and gas, electrical and electronics.
"It must create a knowledge inclusive society as well as a knowledge economy for companies to operate to counter low-quality exports, such as the electrical and electronics sector, which has gone down the drain.
"Malaysia has to think globally now to ensure the continuity of the growth experience for the economic development to be sustainable after 2020."
Comin said even though Malaysia has had a strong recovery since 2009 with a gross domestic product growth of 5.5 per cent, symptoms of medium-term challenges persist for Malaysia, such as a slowdown in productivity growth, reduction in investment rate, high price- earnings and and high dividend yield at Bursa Malaysia.
He said there is also high capital and skilled labour outflow, relative contraction of high-skilled manufacturing sectors, reduction in Malaysia's market share and quality in skilled- intensive exports, and many of these symptoms are unique to Malaysia.
"There is a missing factor, which is the lack of technological knowledge that prevents companies to move up the value chain to take advantage of new opportunities as well as prevent companies from creating more good jobs that pay well, induce workers to go to college and reduce inequality."
Comin said to create a knowledge- friendly ecosystem where knowledge is produced and assimilated, universities and research institutes must distribute it to companies.
As an example, he said, the Malaysian Palm Oil Board (MPOB) has done well by finding technological solutions for plantation companies, such as developing a variety of palm products, improving yield, and getting rid of pests.
The role of the research organisations is to provide technical knowledge to the firms so that they can solve problems and become world-class firms.
Institutes such as Mimos and MPOB can engage in conducting and assimilating applied research and development and getting involved in contract research with private companies that need knowledge and not involved in the development of new products.
"Top science and engineering university departments connected to institutes must supply scientists who conduct research and development and participate in contract research."
He said public institutions must coordinate and collaborate with each other because there is now an inefficient diffusion of knowledge, of which companies do not know where to go for help.
Comin said there are also weak links between research institutes and top universities' science and engineering deparments, which must be addressed.
"It requires properly targeted actions that alleviate missing factor (knowledge) and provide new opportunities to companies.
"Such companies also need to move away from their comfort zone and take advantage of the new opportunities."
Comin is also scheduled to meet Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz, Minister in the Prime Minister's Department in charge of economic planning Datuk Seri Abdul Wahid Omar and Minister in the Prime Minister's Department and Performance Management and Delivery Unit chief executive officer Datuk Seri Idris Jala.
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