Tech disruption, a high-skilled workforce: Just where does the Shared Prosperity Vision fit in?

Foreign workers work at residential area which is under construction at Puncak Alam in Selangor November 1, 2018. — Picture by Yusof Mat Isa
Foreign workers work at residential area which is under construction at Puncak Alam in Selangor November 1, 2018. — Picture by Yusof Mat Isa

KUALA LUMPUR, Oct 3 — It is a question that has been kicked around in the corridors of power for decades now: how do we move the country away from its dependency on a low-skilled, labour-intensive workforce?

Malaysia aims to become a high-income nation but issues like stagnant wages and an uncertain job market have proven to be stubborn obstacles.

The Pakatan Harapan government is hoping that its Shared Prosperity Vision 2030 (SPV2030) will address these challenges, and more.

In implementing SPV 2030, the government aims to increase annual incomes which will lead to stronger spending power and a more robust economy.

So what do we need to achieve this goal? Malay Mail spoke to various experts and stakeholders to get their points of view.

Almost all agreed that Malaysia has the capability to move into a high-skilled, high-income economy but it needs a combination of the right kind of policies and political will to implement these ideas.

Upgrading skills

Deputy director of Khazanah Research Institute Christopher Choong Weng Wai said these policies should address premature deindustrialisation, as well as the potential risk of technology displacing mid-skilled jobs — so it is not just about addressing low-skilled jobs.

“We need to balance labour supply policies such as upgrading the skills of our workers, with labour demand policies which are creating jobs and drawing the right kind of investments into the country. This is because we have seen from the labour force surveys that our graduates are taking up semi-skilled jobs.

“We need to put in place a nimble and updated Industrial Policy that is responsive to business needs and economic cycles. The Industrial Master Plan (IMP) 2006-2020 ends next year, and it is timely to put in place the next IMP that addresses the new industrial and technological challenge for Malaysia,” Choong said.

He added that the changing nature of jobs, coupled with up-and-down business cycles, has wider implications on social protection.

If future jobs are non-standard and informal then there is the need to provide sufficient safety nets to avoid social and economic risks, he said.

“Many are working on an informal basis. Take for example a web designer who may work on a particular project... then once done, they get paid. These kinds of jobs are becoming the norm nowadays and there is no Employees’ Provident Fund nor insurance to cover any accidents or illnesses.

“Hence the government has set up Malaysian Social Protection Council to establish a social protection plan and I hope to see it address some of these issues in the changing labour market,” said Choong.

Under the Human Resources Development Bhd Act 200, the Human Resources Development Fund (HRDF) has been tasked with aiding the government in upskilling the workforce.

According to HRDF chairman Datuk Noor Farida Ariffin, her agency will conduct training lessons in collaboration with employers in order to meet future demands for high skilled workers.

“Needless to say, the workforce has to keep abreast of new technological developments in their area of work. This is imperative if we are to join the Industrial Revolution 4.0,” Noor Farida said.

“However, this does not mean that we will be abandoning technical and vocational education and training (TVET) programmes. These are still needed to cater to students who do not wish to pursue university degrees but want to opt for vocational training.

“However developed and high income a country is, we still need car mechanics, air-conditioning repair men and plumbers, for example and TVET will ensure that these skilled workers are retained among our workforce.”

Noor Farida pointed out that Malaysians aren’t interested any more in low-skill or what is deemed as 3D — dangerous, dirty and difficult — jobs. These jobs are then explicably taken up by foreigners.

She said her agency is working on a strategic initiative to help unemployed graduates find work and assist employers in training their employees.

“HRDF helps employers undertake this training by providing them with the necessary funding which is derived from the levy of one per cent which all registered employers have to pay to HRDF,” said Noor Farida.

“We also assist them with the setting up of the training programmes, especially the small medium enterprises.”

According to the Department of Statistics Malaysia (DOSM), in the second quarter (Q2) of 2019 and in terms of skill, positions were largely recorded in the semi-skilled category with a share of 62.3 per cent.

A total of 24.4 per cent of positions were in the skilled category while low-skilled was 13.3 per cent.

The highest share of vacancies in Q2 2019 was in the semi-skilled categories at 56.1 per cent and followed by skilled category 25.2 per cent while the low-skilled category represented 18.7 per cent.

To break it down further, DOSM stated that the largest share of vacancies was posted by the manufacturing sector at 55.6 per cent, followed by services at 20.1 per cent.

In SPV2030, this will be the two industries Putrajaya will focus on.

Don’t be a one-trick pony

Deputy Youth and Sports Minister Steven Sim Chee Keong and Malaysian Employers Federation executive director Datuk Shamsuddin Bardan both agreed that in order for the workforce to be better equipped, it is important to not only own one set of skills but multiple sets of skills.

That way as technology catches up to human beings, they can fall back on other avenues to remain as high-income earning workers.

Sim said future Malaysians should be the ones to code the next generation of machines, build them and operate them.

He said the education sector must change with the times and think about what jobs will be on offer in the next five, 10 or 15 years as SPV2030 aims to move into the new high-end job market.

“Under KBS we have 22 TVET institutions. We are in the process to up the value chain, so instead of just wiring, we want to offer coding too; instead of just welding, we want to offer robotics; instead of just data entry, we want to offer data analytics. And we do not do this just because it’s in trend,” Sim told Malay Mail, referring to his ministry.

The computer engineer and MP for Bukit Mertajam said Malaysians in general, and the government especially, must acknowledge that if Malaysia does not catch up on technological developments, it will continue to be a middle-income country.

“We have to go up the value chain. The government has to think what’s going to be there in the third decade of the 21st century and plan backwards.

“Education sector needs to be rethought. That’s why we are going to teach artificial intelligence component to Standard Four students next year, in the future these are going to be basic skills like how a word processor is a basic skill — one is expected to know it already without being really taught.

“Universities are undergoing reforms first to make them more autonomous to enable academics and students to make important decisions beyond political intervention,” he added.

Meanwhile, Shamsuddin said employers will play a pivotal part in ensuring the transition to a high-skilled workforce but it will not happen overnight.

Workers at the Soon Hup Oil factory are pictured packaging subsidised cooking oil November 9, 2016. — Picture by Azinuddin Ghazali
Workers at the Soon Hup Oil factory are pictured packaging subsidised cooking oil November 9, 2016. — Picture by Azinuddin Ghazali

He pointed out how many industries in Malaysia still use old machines for production as their workers are more comfortable and familiar with them, as they are not equipped with the knowledge to handle modern high-technology machinery.

This, he added, is no excuse for Malaysians to not adapt to a changing environment, as given proper training and time, workers will be able to familiarise themselves with modern machinery.

“Employees can gain their high-level certification by working first then getting a degree or certification later on like an Recognition of Prior Learning.

“By doing this it’ll increase your base income. Special attention must be given to the B40 group as they are struggling the most,” said Shamsuddin, referring to the bottom 40 per cent households.

“Ideally we would like to see the annual wage for an average household to be increased from the current average of RM90,000 per annum to say RM125,000.”

A fair model for all

Part of SPV2030’s aim is to move away from race-based policies and be a fair model, prioritising the B40 but without leaving other Malaysians behind.

For Shamsuddin this may be good in the early days of its implementation but cannot be a long term solution and a proper timeline for execution is needed.

“Some races like the bumiputras in the B40 are are just catching up to modern society so they  may need some help first.

“Therefore plans like this need proper timelines that we must adhere to. We can’t just be helping one race all the time. And once we’re all on equal footing, there should be no more identification by race, just Malaysian,” said Shamsuddin.

Recently, Education Minister Maszlee Malik said that despite the high number of graduates with a first-class degree, youth unemployment remains high because of the lack of digital skills.

According to DOSM, the current unemployment rate is at 3.3 per cent, roughly around 542,800 unemployed personnel.

He said youth unemployment has increased steadily from 9.94 per cent in 2011 to 10.92 per cent in 2018. Maszlee felt that by equipping graduates with the right digital skills through public-private cooperation, this skills and knowledge gap can be fixed to make youths more competitive.

Prof Ahmad Fauzi Abdul Hamid from Universiti Sains Malaysia, while echoing Shamsuddin’s sentiments, said job losses due to advancements in technology is nothing new.  

“Job mismatch and losses have been happening throughout history, remember the machine-destroying Luddites in the early years of the Industrial Revolution in England?” asked Fauzi, referencing the 19th century radical faction which destroyed the textile machinery as a form of protest against its use to get around standard labour practices.

“Our mentality needs to be changed from one of merely job seeking to one of job creation and job adaptation. We shouldn’t be shackled by the idea that we have only the Malaysian market.

“Why not venture out where non-Bumiputeras have already done for the past 40 years or so and have edged their Bumiputera counterparts in competitiveness.

“Some were compelled to translocate overseas due to perceived lack of opportunities here at home. Many made it big,” added Fauzi.

“Also changing technology doesn’t recognise ethno-religious affiliations, so for those who fail to adapt, the state can probably provide avenues to cushion the impact, but even such measures can’t be long term.”

* Editor's Note: An earlier version of this article contained an error which has since been rectified.

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