Addressing Shortage of Skilled Labour In Japanese investment in Malaysia

Managing Director of JETRO KL Mai Onozawa says to ensure continuous industrial development, it is important to further develop highly skilled labour to address a shortage and boost Japanese investment in Malaysia

Addressing Shortage of Skilled Labour In Japanese investment in Malaysia
Photo by Windows / Unsplash

Kuala Lumpur, November 2022 – A consultation meeting between Malaysia and Japan, hosted by the ASEAN Business Advisory Council (ASEAN-BAC) Malaysia was held online on Thursday with the presence of Japanese Ambassador to Malaysia Takahashi Katsuhiko, and attended by five speakers.

The closed-door consultation meeting was moderated by ASEAN-BAC Malaysia chairperson Tan Sri Dato’ Dr Munir Majid.

He suggested reviving and evolving the Look-East Days between Malaysia and Japan during the 1980s, to include sustainable and green economy.

According to Takahashi Katsuhiko, currently there are approximately 1,600 Japanese companies that operate in diverse industries, besides the electrical and electronic component sector, they also operate in the financial, medical and healthcare sectors in Malaysia.

“This demonstrates the two countries are diversifying their economic relationship,” Takahashi Katsuhiko says. “As Ambassador of Japan to Malaysia, I will try my utmost to further strengthen Japan-Malaysia economic ties in cooperation with MAJECA, JACTIM, JETRO, MIDA, Invest KL and ASEAN-BAC.”

Malaysia Seeks Strategic Global Partnerships In Its Preferred Healthcare Destination
Malaysia Healthcare’s Premium Wellness Programme is an industry-wide collaborative effort with numerous top-tier private hospitals, hotels and travel companies in Malaysia

Earlier this year, Japan and Malaysia signed and exchanged a memorandum of cooperation (MOC) on the aircraft industry, with the aim of further cooperation.

Broader Scale of Cooperation

Japan is one of Malaysia’s biggest sources of foreign direct investment (FDI) with total investment value reaching a whopping RM90.9 billion (USD27.4 billion) as of the end of 2021, according to a statement by a Malaysian minister early this year.

The FDI by Japan has been critical in developing Malaysia’s industries especially in the transfer of technology and the technical and technological know-how that take place between international and local industry players.

“As many reputable Japanese companies continue to establish their presence here in Malaysia, manifesting their confidence in the country’s vibrant business environment, we have also seen the steady growth of aspiring local companies in our industry, meeting the industrial needs of multinational corporations (MNCs) and participating in the global value chain,” says Executive Director of Investment Promotion of Malaysian Investment Development Associations (MIDA) Najihah Abas

Datuk Seri Mohamed Iqbal, Vice-President of Malaysia-Japan Economic Association (MAJECA) notes that there are new challenges ahead despite accelerating Japanese FDI in Malaysia.

He added that in the Malaysian and global context, Malaysia needs to continue presenting itself to be competitive and in a favourable environment, not only at the inception stage but continuously during the entire investment period.

He continued that as industries continue to operate during these turbulent times, one will see how the challenges posed by the Covid-19 pandemic can be overcome, as well as how industries can navigate around the challenges arising from the war and hoped for a peaceful resolution to the war.

He echoed the views of Ambassador Takahashi Katsuhiko of the importance and the opportunities presented by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the recent ratification of the Regional Comprehensive Economic Partnership (RCEP).

“These FTAs are progressive. Malaysia and the signatories should work together to reap benefits accorded under these agreements,” Datuk Seri Mohamed Iqbal says.

“With Malaysia’s recent ratification of the CPTPP, Japan and Malaysia’s cultural, trading, investment and educational links established over many years can now be elevated to a higher level. Tapping into the huge USD 838 billion government procurement market can be facilitated through a concerted and structured effort between the officials and private sector from both countries,” ASEAN-BAC Malaysia council member Tan Sri Yong Poh Kon adds.

Skilled Labour and Look East

The Look-East Policy, inaugurated in 1982 paved the way for Malaysia and Japan to mutually benefit from its alignment and vision for sustainable next-generation industries, as well as high-value activities driven by technology and innovation, Director of Investor Relations - Asia & Oceania of InvestKL Corporation Mah Chun Wai said in his statement.

According to Datuk Seri Mohamed Iqbal, over 15,000 - 17,000 students from Malaysia benefited from the Look-East Policy where they went to Japan, studied and some of whom were gainfully employed there. These students were being equipped through education and practical experiences in Japan into skilled talents."

Managing Director of Japan External Trade Organisation (JETRO) Kuala Lumpur Mai Onozawa also added that to ensure continuous industrial development, it is important to further develop highly skilled human resources such as IT engineers and industrial technicians.

“The key is to utilise the ongoing Government-Industry TVET Coordination Body (GITC) platform, incorporate demands from the foreign industries and to produce human resources that are required by the industry in the future,” Mai Onozawa adds.

Mr Raja Singham, ASEAN-BAC Malaysia council member also said that Japan’s expertise in Artificial Intelligence (AI) and Internet of Things (IoT) combined with Malaysia’s strength in manufacturing and supply chain is worth exploring.

Japanese assistance in the Technical and Vocational Education and Training (TVET), technology and education sector will help Malaysia become a supplier of skilled labour to Japan to meet its needs.

Malaysia’s Economic Growth

The Japanese Chamber of Trade and Industry (JACTIM), Malaysia President Daiji Kojima believes Malaysia’s industrialisation and economic development were greatly contributed by Japan.

“The 50 years of FDI has greatly contributed to the Country’s economic development, and I believe this will not change even under the New Investment Policy (NIP).

"We hope to continue our investment and support the country’s economy by clear investment rules and incentive schemes as well as cross-sectorial, real one stop support from the government,” Daiji Kojima elaborates.

In early October 2022, the International Trade and Industry Ministry (MITI) launched the NIP to achieve sustainable economic growth anchored on the National Investment Aspirations.