KUALA LUMPUR: The shift towards a high-productivity economy is among the government’s key priorities to ensure Malaysia remains competitive amid rising costs and global challenges, says Datuk Seri Dr Ahmad Zahid Hamidi.
The Deputy Prime Minister said the country can no longer rely on old approaches, but must instead address these challenges by boosting productivity through automation, digitalisation and innovation.
He said that while the government will continue to support the transition, industry players should work alongside the government and be bold in embracing change.
“We must overcome costs with productivity through automation, digitalisation and innovation.
“Companies that will succeed in the future are not the biggest, but the most efficient and agile because in today’s world, old ways will not win new battles,” he said at the Government-Business Community appreciation reception, organised by the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM).
On technical and vocational education and training (TVET), Ahmad Zahid said it is fast emerging as Malaysia’s main economic lever, with more than half of SPM leavers now opting for skills-based pathways over traditional academic routes.
He said the change is not incidental as the employability rates of TVET graduates of over 95% was proof that demand by industries is moving towards skilled labour.
“Skills are the new currency. TVET is no longer a second option but a strategic national choice,” he said.
Beyond TVET, Ahmad Zahid pointed at a broader economic shift towards higher productivity and urged companies to embrace automation, digitalisation and innovation rather than compete on cost alone.
He also called for stronger supply chain resilience and cautioned that over-dependence on limited sources poses systemic risks in an increasingly volatile global environment.
“Resilience is no longer an advantage but a necessity. These priorities require a whole-of-ecosystem approach with government and industries working in tandem rather than in silos,” he said.
“We must move forward together as a national ecosystem. We want Malaysia to be a destination of choice, not by default, but by confidence.”
Meanwhile, ACCCIM president Datuk Ng Yih Pyng said TVET must sit at the heart of Malaysia’s economic strategy, calling it a “vital pillar” in strengthening the nation’s talent pipeline and workforce readiness.
He said sustainable growth now hinges not just on capital but on the quality and adaptability of workers.
“By equipping our workforce with industry-relevant skills, TVET plays a critical role in bridging the gap between education and employment, boosting productivity and supporting high-value industries,” Ng said.
He added that the business community also appreciated the role the public sector has played in establishing a stable, predictable and productive environment.
With the challenging economic times due to the Middle East conflict, the effectiveness of the public sector is more crucial than ever as it provides essential support during a crisis.
“While we recognise the government’s work-from-home initiative aimed to alleviate commuting burdens and reduce fuel consumption, it is vital that this approach remains practical and targeted, ensuring it does not hinder public service delivery or disrupt business operations, especially in our current economic uncertainty,” he said.
