Malaysia finds itself in a paradoxical economic situation, grappling with low unemployment rates juxtaposed against stagnant wages and a high underemployment rate. Despite a commendable unemployment rate of 3.2%, wage growth has not kept pace with economic development, highlighting the "wage-to-job" paradox. The country faces significant challenges with over 36% underemployment, indicating that many individuals are working in roles that do not fully utilize their qualifications or skills.
Moreover, Malaysia's education system produces approximately 300,000 graduates annually, with one-third specializing in STEM fields. However, only 50,000 high-paying, skilled jobs are available, leading to the "education-to-job" paradox. This mismatch between educational output and job market needs is further compounded by the "skills-to-job" paradox, where a shortage of skilled talent persists, especially in the STEM sector.
The government produces about 100,000 TVET (Technical and Vocational Education and Training) graduates each year, aiming to enroll 500,000 students in these programs this year. TVET courses offer a range from levels 1 to 5, equivalent to an advanced diploma or associate degree. These graduates enjoy a higher employability rate than their non-TVET counterparts, with job placement increasing from 87% in 2020 to 94.5% in 2023.
Steven Sim, addressing these issues, highlighted a critical perspective on Malaysia's economic model:
“What I'm trying to say is this: If you are thinking the current university model will be able to fill your job market demand, then you are delusional. Because universities … (are) not created for the industrialised world,” – Steven Sim
Sim further emphasized the need for an economic shift:
“I personally believe if you want to create higher-paying jobs and improve salaries, we have to move away from the ‘buy cheap, sell cheap’ economic model,” – Steven Sim
He argued that reliance on low-cost strategies hampers economic progress:
“(If) you want to buy everything cheap, you want to be subsidised for utilities, you want to buy cheap labour, then you will never be able to improve,” – Steven Sim
The government's Madani Economy Framework seeks to address these challenges by "raising the ceiling and raising the floor." This includes injecting more capital into the economy to elevate its value chain. Sim elaborated on this strategy:
“Raising the ceiling refers to putting in more money to help the economy move up the value chain, with moves like setting aside RM40 billion in this year’s budget to support loan facilities for small- and medium-sized enterprises, and government-linked investment companies aiming for RM25 billion in domestic investments this year,” – Steven Sim
Edwin Oh Chun Kit pointed out societal norms as a factor contributing to these economic challenges:
“This is partly due to a push for university enrolment driven by societal expectations. In many ways, Malaysian society is ingrained to believe a university degree is the only route to career success, which also leads to the perceived lower status of TVET as a viable alternative,” – Edwin Oh Chun Kit
Oh Chun Kit also noted a gap in academic programs' ability to develop critical workplace skills:
“Moreover, many companies report difficulty finding employees with problem-solving and analytical capabilities, suggesting a gap in how academic programs cultivate critical workplace skills,” – Edwin Oh Chun Kit
As technological advancements continue to reshape the labor market, Amirah Wan Usamah emphasized the evolving focus on practical skills over formal degrees:
“As the labour market and its demands become more dynamic, in part due to technological advancements, there is a perspective shift going from what degree you have, to one that asks, what is it you can do,” – Amirah Wan Usamah
She also highlighted the growing importance of lifelong learning:
“There is this growing recognition of the importance of lifelong learning and the necessity to adapt to evolving market needs,” – Amirah Wan Usamah
The shift towards micro-credentials and accredited certifications offers a potential solution:
“I think the move forward here, and this is a pattern we are seeing globally, is the movement towards micro-credentials and accredited certifications that happens beyond tertiary education,” – Amirah Wan Usamah
Edwin Oh Chun Kit stressed the need for cohesive efforts to bridge skill mismatches:
“With greater synergy in these efforts, Malaysia can effectively bridge the skills mismatch, improve labour market outcomes, and drive sustainable economic growth,” – Edwin Oh Chun Kit
He also advocated for better alignment of academic curricula with industry needs:
“Such a body can ensure academic curricula and training programs are aligned with dynamic, ever-changing industry needs while fixing the gaps that result from inconsistent inter-ministerial coordination,” – Edwin Oh Chun Kit
Yeah Kim Leng called for a strategic overhaul in national policies:
“A more responsive national education policy and labour market policy are needed to coordinate the nation’s human resource planning and development. It is a call to action for policymakers, employers and educators to develop and harness the country’s human capital more effectively,” – Yeah Kim Leng
Leave a Reply