When artificial intelligence (AI) can draft contracts, analyse financial statements, and generate complex code within seconds, we need to ask ourselves a fundamental question: what skills are we equipping our young people with, and will those skills remain relevant in the coming years?
Malaysia has set an ambitious target of achieving 30% technical and vocational education and training (TVET) graduate representation in our workforce by 2030, as outlined in the National TVET Policy. However, we must confront an uncomfortable reality: expanding our TVET pipeline means little if we are not addressing fundamental skills gaps that exist today.
Current data shows significant misalignment between the TVET curriculum and industry expectations. While our programmes deliver approximately 80% coverage of technical skills, they provide only 30% coverage in financial literacy, 25% in business awareness, and 20% in entrepreneurial thinking.
Industry expectations sit at 60-70% coverage in these areas. This gap has real economic consequences. Consider the small and medium practices (SMPs) sector. Approximately 2,880 SMPs operate across Malaysia, representing 70-80% of all accounting practices.
These firms are the primary advisers to our SME economy and face persistent talent challenges. They need graduates who can contribute immediately, handle accounts preparation and tax work from day one, and communicate financial concepts clearly to business owners. With lean structures, they cannot sustain extended onboarding periods.
Our TVET graduates possess strong technical foundations but struggle with business thinking, client-facing communication, and ethical judgement in ambiguous situations. These are precisely the competencies that become critical as AI handles routine technical tasks.
This is the paradox of the AI era: as automation takes over procedural work, the premium shifts to fundamentally human skills – critical thinking, clear communication, ethical reasoning under uncertainty, and the ability to apply technical knowledge in real-world contexts.
If critical competencies can be delivered in focused formats, we need to examine why these are not systematically integrated across our entire TVET infrastructure.
Many TVET students do not intend to pursue traditional university pathways. Under current structures, this effectively limits access to structured professional development and recognised qualifications.
This represents both an equity issue and economic inefficiency. We are underutilising talent that could address critical workforce needs. TVET continues to be perceived as a secondary option for students who do not pursue academic routes.
This perception persists in career guidance conversations, family discussions about educational choices, and even in how we structure scholarship programmes. Yet practical, adaptable, hands-on skills may be better suited to a rapidly evolving economy than purely theoretical knowledge.
When parents steer children away from vocational pathways based purely on prestige considerations, we need to ask: are we making decisions based on what worked in the past, or what will matter in the future?
We need fundamental reframing. TVET should not be positioned as a fallback. When designed and delivered effectively, it represents a legitimate pathway that directly addresses workforce needs and economic priorities.
This requires action across multiple stakeholders. Policymakers must ensure TVET funding and programme design reflect 2030 workforce needs, not 2015 assumptions. TVET institutions should focus on developing adaptability alongside job-specific skills. Industry should evaluate talent based on demonstrated capability rather than credentials alone.
Students should demand programmes that deliver both technical mastery and business acumen, with transparent professional progression pathways.
The AI era will test every assumption in our education system. It will expose gaps we have tolerated and inefficiencies we have overlooked. We can address these challenges proactively, or allow market forces and technological disruption to impose more painful adjustments.
Malaysia’s TVET sector has the infrastructure, enrolment and policy support to become a genuine engine of economic resilience and workforce transformation. What we need now is the willingness to acknowledge where current approaches fall short and a commitment to implement solutions systematically.
The 30% target for 2030 is achievable. But achieving that target with a workforce possessing both technical excellence and business readiness requires us to act now, with clarity and urgency. The question is not whether change is necessary, but whether we will lead it or be forced to react.
AIRIL RAZALI
Founder and CEO
TYMBA Education Group
