Malaysian tech and job creation — Reza Razali

OCTOBER 16 — There seems to be some unrest on the ground in regards to the Malaysian economy, and the feel-good historic election of 2018 factor is beginning to taper off as we face the reality of the day.

With a weakening ringgit and a sense of uncertainty in the global economy thanks to the impulsive nature of the American president and his tweets, we can see its effects in our domestic consumption.

If you follow the social media trends and conversations, one can see the anxiety clearly among young Malaysians who are witnessing the Malaysian dream slipping away from their very hands. While the official youth unemployment rate stands at 10.9 per cent, which is three times higher than the national average, this does not tell the entire story.

Underemployment is a real issue affecting our youth, our graduates who were trained to be engineers and technical specialists are forced to jump into the gig economy job market or fill in the low-end retail service vacancies.

With substantial student debt at the back of their mind and the realisation that the years they spent in college harnessing knowledge and technical know-how seems to be wasted, it adds fuel to their anger and disillusionment.

A poll by Merdeka centre reveals that at least 42 per cent of those in the 20-30-year-old bracket is disappointed or are angry with the government.

With voting age dropping down to 18 and once the automatic registration mechanism kicks in, this youth bloc will play a vital role in the next general election, thus crucial for any government of the day is job creation, quality job creation.

Part of the problem is that while our higher education system is geared to fill the demands of a highly-skilled labour market, our economy has yet to catch up.

We sometimes fool ourselves by thumping billions and billions worth of foreign direct investment as a sign of a healthy economy, yet we do not look into the details of those investments.

FDI is a good thing in general, but it does not necessarily translate itself into a job creation spillover, for instance, one must understand that the outcome of a billion ringgit worth of investment in property is not an equivalent to the same amount of investment in manufacturing.

Now even if we decide to fall back to our forte back in the 90s by restructuring our economy to become the hub for the production of goods, in hopes that we can ride on the uncertainty of a trade war between US and China, reviving the glory days of the Asean Tiger would be extremely difficult facing competition with the likes of Vietnam and Cambodia who can easily beat us on the cheaper labour factor.

While we appreciate the government efforts in stimulating the economy and job market via tax breaks and pushing for significant foreign investments (introduction of Gojek for example), it won't mean much if we do not harness the ability to produce and create something be it a product or a form of high-end service.

While an investment from a tech giant like Gojek is quite an achievement, it won't mean much unless they are opening up an R&D centre or moving their development HQ here in Malaysia.

I fear that all it will offer to the job market would be an overflow of gig-economy jobs which are not long term nor sustainable in nature.

Perhaps it's about time that we look into reviving the national spirit of producing, innovating and creating.

A healthy economy is an economy that not only consumes but also produces; I think it's about time we look into pushing and promoting Malaysian tech companies and learning from past mistakes something that is driven by the private sector.

Now we may not be able to compete in heavy industries due to the economy of scales, but tech application is something that we can push and promote.

Government services and procurements should prioritise indigenous products, from payment gateways to secure emails or mobile apps; we should create an atmosphere and an ecosystem where Malaysian tech can prosper.

The direction in which the government should encourage is to nurture grounds that can inspire fresh graduates to create and invent new products and services.

However, this is not a call for a lopsided affirmative action policy; this Malaysian tech initiative must be based on merit and that the private sector must drive it.

As we have seen many times before, a monopoly based affirmative action will only stifle innovation, we must not make the mistake of rebadging imported products while trying to push it as a Malaysian innovation, it will be bad for the market, and it will not spur growth.

Malaysian Tech creates jobs, quality jobs for Malaysians, while we understand the need for Malaysian companies to compete by merit on a global scale, sometimes one must understand that competition must be based on a level playing field.

Big conglomerates with local partners may be able to offer a more attractive package, but they do not come in the form of a long term investment for the nation, mostly in the form of quick profit by the local partner.

If indeed the government is serious in creating good jobs for our graduates, start with our local Tech, regardless of race, driven by merit.

Buy Malaysian tech first; it creates jobs and opportunities for fellow Malaysians because we don't just rebadge things, we make them.

* Reza Razali is founder of Terato Tech and an active investor in the Malaysian startups.

** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.

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