Post by : Shakul

The World Bank has warned that Malaysia’s leading companies are struggling to scale up and innovate effectively, limiting the country’s ability to create high-paying and high-quality jobs. The concern was highlighted in the latest Malaysian Economic Monitor report released in Kuala Lumpur, where the bank pointed to growing underemployment among graduates despite strong overall employment figures.

According to the report, many of Malaysia’s most productive firms have not expanded as strongly as expected and are falling behind global productivity leaders. While weaker firms within the country have improved over time, the gap between Malaysia’s top companies and international competitors has widened. The World Bank said this trend is affecting competitiveness and reducing opportunities for better-paying jobs across the economy.

The report also highlighted problems in technology development and commercialisation in Malaysia. Limited collaboration between universities and industries, weak technology transfer from foreign companies, and continued brain drain among skilled Malaysians were identified as major barriers to innovation. The bank noted that these issues are preventing the country from building stronger high-value industries and improving long-term productivity.

Despite positive labour market data between 2014 and 2024, including high employment rates and increased labour force participation, the World Bank said these numbers hide a deeper issue. More than one-third of tertiary-educated workers in Malaysia are now employed in jobs below their qualification level. This growing mismatch between education and employment has raised concerns about the country’s ability to fully utilise its skilled workforce.

The bank explained that the main challenge is not the number of jobs being created but the quality of those jobs. Malaysia’s economy continues to generate employment, but many positions do not match the capabilities and qualifications of graduates entering the workforce. As a result, wage growth has remained relatively modest despite improvements in education levels and productivity.

The World Bank stated that firms are not producing enough high-skill and high-productivity jobs to absorb the increasing number of educated workers. Skills mismatches and gaps in workforce capabilities are also contributing to the problem. The report stressed that Malaysia needs stronger business innovation, better technology adoption, and closer cooperation between industries and educational institutions to improve job quality.

Malaysia has been recognised regionally for upward economic mobility, but the World Bank believes the country still faces major challenges when compared to high-income economies. The report noted that simply increasing wages through labour policies may not be enough to solve the issue. Instead, the government and private sector should focus on building quality employment opportunities and improving workforce capabilities.

Economic experts believe Malaysia’s future growth will depend heavily on whether businesses can move towards higher-value industries, advanced technology sectors, and innovation-driven production. The World Bank said creating stronger “quality jobs” will be essential for ensuring sustainable wage growth and maintaining the country’s economic competitiveness in the coming years.

The report has added to ongoing discussions about graduate employment, economic reforms, and the future direction of Malaysia’s labour market as the country works to strengthen its position in the regional and global economy.

#Business News #Asia News #Malaysia News