A critical higher education strategy for the future resource economy

By: Prof. Dr. Ahmed Ibrahim

Although Past efforts to reform the economy have left us struggling to escape the middle-income trap. There are still gaps in our economic formula. Family income is a major issue. For example, our pay levels have not kept pace with inflation and rising costs. This explains why we have problems dealing with food price shocks in particular. We saw this episode in the recent rice controversy.

We usually succumb to knee jerk reactions. We are notable for using price controls, which are not sustainable. Developed economies generally do not practice price intervention. They leave it to market forces. The instrument of subsidy, especially blanket subsidy, is equally troubling. Both price intervention and subsidies are open to abuse. Both are costly to the economy. Many know that the solution lies in strengthening people’s incomes. Most experts agree that moving the economy to higher incomes will help.

Harder to do than to say. It is clear that the economy is addicted to low-value businesses. Apart from volatility of goods, low cost labor is a common feature of such businesses. Such low-skilled workers are often imported. Having an efficient system to bring in such a workforce is not easy. Labor malpractice cases are inevitable. This is
Enforcement of international judgments on labor standards creates problems for our exports.

We have seen reports of how some of our products have failed to enter markets due to non-compliance with international labor rulings. Sectors heavily dependent on such low-cost labor include horticulture and construction. Neither has made much progress in adopting new technologies. During the Covid pandemic, few attempts were made to change. But the momentum failed to pick up steam as the situation returned to normal. Even in manufacturing, most of our business is in low-value assembly operations. Much of the value is in design and branding, which we are not very strong at.

How do we migrate towards high-tech business? MIGHT, the Malaysian Industrial Government Committee for High Technology, has been trying for years to do just that. By conducting technology perspectives, MIGHT identifies business sectors that can create high-value jobs. Space, smart cities and precision manufacturing are just a few that come to mind. Progress has been mixed. There is still that sluggishness in developing such industries.

Both FDI and TDI are challenging to attract suitable investments. A major constraint is the need for skilled workers in such high-tech fields. This is where higher education plays an important role. It has been recommended that skill development and R&D should be given more to high technology sectors. R&D should be used more than the base. As of now, our R&D costs are heavily skewed toward the bottom line. As a developing country, such disparity in R&D allocation is unwise. Also, we have limited resources. Whatever basic research we do, we need to support closing the knowledge gap to enable applied research, especially those with good potential for commercialization.

The existing higher education scheme will end in 2025. Talks on a new plan have been announced. Many recommend that stakeholder engagements begin now. It should be thorough and comprehensive. This is very important for some detailed analysis of the expiration graph. What features are no longer applicable? What was achieved in the end?
The plan? And what is not being implemented?

Often, the preparation of new maps requires some consideration of lessons learned from previous projects. Often we start from scratch. Strategists suggest changing this practice. Monitoring and evaluation of any new map should be clear, especially the unit or organization responsible for carrying out routine evaluation. Sharing the results of assessments with key stakeholders should be standard practice. Often the data is categorized. Apart from a clear communication strategy, collaboration between stakeholders should be mandatory. Without such a reshaping of the higher education system, it will be impossible to produce the right talent for future-proof economics.

The author is Tan Sri Omar Center for STI Policy, UCSI University and Associate Fellow Ungu Aziz Centre, University of Malaya.