Bright prospects: Experts say there are many high-skilled job opportunities for Malaysia in the technology and digital industries. — 123rf
JOANNE* has lost count of how many job applications she sent out since she graduated with a Business Management degree last year.
At this rate, the 24-year-old says, she’s willing to take on any job, including at a fast food restaurant or even as a “street salesman”.
“It’s not that I look down on them but it looks like a very hard, thankless job – going around the mamak trying to sell stationery sets or children’s books,” she says, adding that she’s trying hard to be patient and carry on in her job hunt.
Although many graduate workers have experienced the same challenges that Joanne is facing, the World Bank says that data shows Malaysia’s labour market has improved, with the national unemployment rate returning to pre-pandemic levels of 3.3% in the second quarter of 2024.
This is supported by Department of Statistics Malaysia’s Labour Force Statistics which showed that the unemployment rate for youth has also fallen by 0.1% to 6.4% or 428,500 unemployed youth in August, as compared to 433,100 in July.
However, despite these optimistic reports, the World Bank warns that not enough high-skilled jobs are being created for tertiary educated workers in the country, which is reflected in their growing number in semi-skilled or low-skilled jobs.
“In 2023, there were about 288,000 graduates that Malaysia produced. The number of high-skilled job vacancies was only 48,700. Of course, not all of these graduates will necessarily apply to high-skilled jobs, but it still gives you a sense of the magnitude of the problem,” World Bank lead economist for Malaysia Dr Apurva Sanghi is reported as saying at the launch of its Malaysia Economic Monitor October 2024 report on Oct 8.
This “underemployment” phenomenon is especially prevalent outside of Kuala Lumpur, he has noted. For example, the World Bank highlights, more than 50% of the workforce in Kelantan are underemployed. By contrast, the lowest underemployment rate is in Kuala Lumpur, at around 25%.
The future is tech
Clearly, this is an issue requiring policymakers’ utmost attention, and the government has undertaken various measures to address it.
The creation of high-skilled jobs is linked to the country’s foreign direct investment (FDI), which in the Malaysian context hovers between the technology and digital industries, says Sunway University’s Jeffrey Cheah Institute on South-East Asia economic studies director Prof Dr Yeah Kim Leng.
Yeah, who is also a member of the Policy Advisory Committee to the Prime Minister, illustrates the demand for jobs spilt over by FDI. Yeah says the country is seeing a surge of FDI; last year, the FDI reached RM188.4bil in approved investments out of a total of RM329.5bil.
“A lot of high-skilled jobs are linked to foreign direct investments. Typically they (investors) come to Malaysia to get a return on something higher in value, a more efficient way of producing that they can leverage on Malaysia’s advantages in producing quality products. That part of the so-called supply chain that is linked to the high-value products and services that we provide to the world. They (investors) are looking at the Asian market.
“Malaysia is seen as one of the production, distribution and operational hubs. So we can leverage on those kinds of investments and because these are typically skill-intensive and knowledge-based jobs, therefore they largely fall into the skill category.”
Prof Dr Yeah: The creation of high-skilled jobs is linked to the FDI. —Photos: The Star
He says Malaysia should continue expanding its efforts to become a technology-intensive hub, in line with the digitalisation efforts and shift towards high-value products and services. while underscoring the need for higher learning instates to be part of the endeavour.
“And those are skill-intensive sectors that Malaysia need to expand more quickly, with the FDI inflows, which in turn, stimulate the local supply chain to move up the value chain by producing better quality and higher value inputs that can support global companies and industries.
“And also, we need to promote our domestic investments, our technological capabilities. Now to develop that, we need skilled manpower, especially in collaboration with our universities. The universities will need to be able to produce graduates to meet increasing industrial needs.”
The growth of jobs in renewable energy, which falls under the green economy, has also been driven by the government’s commitment to sustainable development and achieving carbon neutrality by the year 2050, says Olivia Fernandez, research assistant at thinktank Bait Al Amanah.
Malaysia has also been strategically focusing on other high-value sectors such as in technology and the digital economy to foster more high-skilled job creation, says Fernandez.
“Government initiatives such as the Digital Malaysia Agenda and the Malaysia Digital Economy Corporation (MDEC) have been actively promoting the growth of the technology sector, offering a wide range of high-skilled job opportunities in areas such as software development, data analytics, cybersecurity and e-commerce.”
Meanwhile, government initiatives like the National Digital Transformation Roadmap aimed to create high-skilled jobs in sectors such as e-commerce, fintech and digital marketing, she adds.
“Artificial Intelligence and automation is another growing aspect in many sectors that are expected to increase Malaysia’s skilled workforce by 30% or more by 2030.”
While Fernandez highlights the potential of sectors like renewable energy, data analytics, and software development for high-skilled job creation, Prof Dr Geoffrey Williams of Malaysia University of Science and Technology presents a counterpoint.
Prof Dr Williams: Industries such as data centres and semiconductors will create relatively few high-skilled jobs.
He argues that industries such as data centres and semiconductors will create relatively few high-skilled jobs.
“By their nature, Fourth Industrial Revolution (4IR) technologies replace people with automation, digitalisation and robotisation. The Green Jobs agenda is also irrelevant and will not create many high-skilled jobs,” he says.
On the contrary, he believes the care economy will create a large number of opportunities for high-skilled jobs as the demand for skilled care workers will go up in line with the increasingly ageing population in the country.
“Another area is in creative industries leveraging new technologies and a third area is in halal business and Islamic finance where there is a huge emerging global market,” he adds.
Sustaining the future
How can Malaysia ensure that its existing and future workforce is not only prepared but also thriving in this new landscape?
Malaysian Employers’ Federation president Datuk Dr Syed Hussain Syed Husman says automation and technological advancements present both challenges and opportunities – the Organisation for Economic Co-operation and Development (OECD) estimates that 14% of existing jobs could become obsolete in the next 15 to 20 years, while 32% will undergo significant changes due to automation.
“However, this doesn’t necessarily spell doom for the workforce. Instead, it underscores the importance of upskilling and reskilling to remain relevant. In this 4IR, the most vital competencies will be adaptability and self-directed learning.
“For older workers, engaging in lifelong learning will be essential for coping with technological advancements. Malaysia has already laid the groundwork with policies like the 4IR National Policy and the Digital Economy Blueprint, which aim to raise labour productivity by 30% across all sectors by 2030.
“These initiatives are projected to generate up to 500,000 jobs by 2025, enhancing sectors like agriculture, manufacturing and services, where productivity improvements could reach 55%, 30%, and 45%, respectively.”
Dr Syed Hussain: The structural changes needed to fill Malaysia’s high-skilled labour gap require a multi-pronged approach.
Nevertheless, Centre for Market Education CEO and Universitas Prasetiya Mulya faculty member, Carmelo Ferlito, cautions against relying too heavily on the government for job creation. Instead, he advocates for the government to focus on removing barriers to investment and facilitating job opportunities.
“I do not think that the government is responsible for creating jobs and it is all the more utopic to believe that the government could decide which kind of jobs can be created.
“The government can only do its best to remove obstacles to job creation, which are all those obstacles that can stop investors from investing.
“But entrepreneurs create the jobs they need. Malaysia is a small economy and there will never be an upside-down labour pyramid – unskilled jobs will always be more than the skilled ones.
Instead, he proposes for the Asean labour market to be opened to allow the excess of skilled workers in Malaysia to find opportunities across the region.
“This is to allow the excess of skilled workers present in Malaysia can find job opportunities in countries where there is a deficit of skilled workers.
“On the other side, Malaysia could attract low-skilled workers more easily, which are terribly in demand, much more than skilled workers.
“Investments will always create a small percentage of high-skilled jobs and more medium-skilled jobs. We can’t think otherwise. That’s why the best option is an open Asean market.”
Preventing future gloom
The structural changes needed to fill Malaysia’s high-skilled labour gap require a multipronged approach, combining education reform, policy shifts and workforce mobilisation, says Syed Hussain.
He emphasises that Malaysia’s education system needs urgent reform. He points out that the country’s performance in internationally benchmarked exams, such as Trends in International Mathematics and Science Study (TIMSS) and the Programme for International Student Assessment (PISA), lags behind government targets and high-income country averages.
“Shifting from teacher-centred instruction to student-centred learning is essential to building a skilled workforce that can drive future growth.”
Beyond education, Syed Hussain notes the broader evolution of work, driven by technology and automation, with digital skills now critical for nearly half of Malaysia’s high-skilled jobs.
“The changing nature of work means that lifelong learning becomes ever more important. About half of online job postings for high-skilled jobs in Malaysia require digital skills. Jobs involving manual skills are gradually replaced by those requiring advanced cognitive and socio-emotional skills, such as problem-solving, teamwork, and perseverance.”
Subsequently, Syed Hussain says to address this, Malaysia must not only focus on education reforms but also mobilise underutilised labour sources, particularly women and youth.
He stresses that policies aimed at improving the school-to-work transition through streamlined Technical and Vocational Education and Training (TVET) governance, along with legal reforms that better support working parents, could significantly boost female labour force participation.
“Expanding child and elderly care provisions would further empower more women to enter and remain in the workforce.”
* Not her real name
