MALAYSIA needs a change in mindset to improve labour productivity as it will boost economic activities and growth in all sectors, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed.
“We cannot be complacent. We need to focus on addressing challenges like enhancing growth enablers for sustainable economic development,” he said at the launch of Productivity Report 2013/2014, here, yesterday.
Challenges remain as the demands from the market remain sophisticated.
Labour productivity grew by 2.3 per cent, far lower than the 4.6 per cent targeted in the 10th Malaysia Plan.
“Education and innovation are two ways of addressing this shortfall as we will need long-term measures to jump to a higher level of competitiveness.”
Apart from research and development (R&D) and high-quality jobs to turn local industries into global players, Mustapa acknow-ledged that in areas such as foreign labour “we are not there yet”.
In terms of labour contribution, the quality needs to be improved by strengthening policies and incentives to firms to create modern jobs that will attract higher wages and increase productivity through the application of technology.
“Undoubtedly, strengthening these modern industries will boost demand for skilled workers and enhance the contribution of labour quality to the country’s economic growth,” Mustapa said.
The increase last year was led by the manufacturing sector and helped gross domestic product (GDP) to expand by 4.7 per cent.
Manufacturing recorded 5.4 per cent growth, followed by services and construction (4.8 per cent and 5.2 per cent, respectively).
Labour productivity in the agricultural sector, however, declined by 3.5 per cent.
“We will need to zero in on those sectors which we have failed to make the grade,” Mustapa said.
Malaysia ranked sixth in the World Bank Doing Business Report 2014 and 12th in the recent World Competitiveness Yearbook 2014 by the International Institute for Management Development (IMD).
Meanwhile, IMD World Competi-tiveness Centre director Prof Arturo Bris, who attended the Productivity Competitiveness Conference 2014, said at 2.3 per cent productivity level, it places Malaysia very much in the low side of the middle-income group of countries.
“Real productive” jobs must be created while the manufactu-
ring sector needs to move fast enough in the high-value innovation level.
“Even though the ratio of R&D to GDP is relatively good, we do not see this reflected in the number of patents.”
The Conference Board executive vice-president and chief economist Prof Bart van Ark felt that business regulations will also need to be amended to raise the competitiveness level while more incentives must be extended.
