University of Nottingham Malaysia Economists Support Move Towards Digital Future
Semenyih, Selangor, 28 September 2022 – Budget 2023, scheduled to be tabled on 7 October, outlines numerous priorities, one of which focuses on the recovery of job and income for all Malaysians and businesses.
Small and medium enterprises (SMEs) have faced numerous challenges and a Pre-Budget Statement mentioned that Budget 2023 would implement comprehensive reforms to address this issue, to boost Malaysia’s competitiveness and resilience.
“SMEs remain struggling on multiple fronts with insufficient funding, increased costs of hiring skilled workers and lack of training being some of the pain points,” says University of Nottingham Malaysia (UNM) Assistant Professor of Economics, Dr Saizi Xiao.
On this, UNM Head of the School of Economics and Associate Professor, Dr Teo Wing Leong, suggests targeted measures like grants, low interest loans, tax incentives, and access to training programmes. He adds that introducing policies encouraging adoption of automation, digitalisation and engagement in Research and Development (R&D) are vital in helping empower business owners.
“Comprehensive reforms in the economic and social sectors will be crucial in making Malaysia more competitive globally. This includes market liberalisation and education reforms to emphasise job-readiness of our youth,” says Dr Teo. He recommends grants for education, to make digital technology and digital economy an integral part of the curriculum at all levels, and public competitions with lucrative prizes to encourage digital innovations.
Upskilling and Green Initiatives
Dr Saizi and Dr Teo’s wish list includes grants supporting collaboration between academia and industry to help identify pain points in our local industries, and thus be able to offer digital solutions for these.
One example Dr Saizi shared is incentivising adoption of health technologies and digital health services, to support vulnerable communities that may have limited access to healthcare facilities.
She also suggests supporting solar-related initiatives and other environment conscious efforts by businesses, such as through tax incentives for changing manufacturing practices to reduce energy consumption and carbon emissions.
Especially for B40 communities, Dr Teo hopes to see training or upskilling programmes as a condition for receiving cash assistance, to help them become self-reliant. “Strengthening the digital literacy of B40 communities will mean providing them the knowledge and skills needed to start their own businesses online,” Dr Saizi explained.
“In an effort to foster Malaysian industries’ global competitiveness, we should make our youths globally competent by providing world-class education and industry-related courses with support from educational institutions.
“This is what University of Nottingham Malaysia has been working hard to achieve, by offering more future forward programmes to uplift our local talent and bridge the gap between industry and academia,” shares Dr Saizi.
GDP Growth Target
On the overall economic performance of 2022, Dr Saizi and Dr Teo are both optimistic that Malaysia will be able to meet the annual GDP growth target, between 5.3% to 6.3%, following the nation’s strong growth in the first two quarters.
However, they both predict that the Malaysian economy may face some roadblocks in 2023, given the notable growth deceleration of major trading partners, fiscal consolidation in the country, persistent labour shortage and dissipating “low base” effect. Nevertheless, sectors like manufacturing, electrical and electronics (E&E) and green energy are still expected to experience a rapid growth next year.