In Talent Battle, Malaysia Loses to Singapore

ARCHIVES 2013

By admin-s On Oct 8, 2013

(WSJ) – Malaysia has talent, but it’s losing the battle to build it as the country’s best and brightest – frustrated by a lack of opportunities – increasingly pack their bags and cross the border to neighboring Singapore.

A new index that measures a country’s ability to develop its workforce recently ranked Singapore No. 3 out of 122 countries globally. Switzerland topped the list followed by Finland.

Malaysia didn’t do too badly, coming in 22nd and placing second in Southeast Asia, above Thailand at 44, Indonesia at 53 and the Philippines at 66.

But the index highlighted how a series of affirmative action policies and an over-reliance on cheap, imported labor have kept Malaysia from building a skilled work force capable of competing with smaller but richer Singapore.

Published by the Geneva-based World Economic Forum, the Human Capital Index assessed things like health care quality, infrastructure and education, to determine how capable countries are of developing a healthy pool of workers.

Malaysia has a young, moderately well-educated workforce, and unemployment has averaged less than 3.5 percent over the past 15 years. But it has also long relied on unskilled immigrants – mainly from Indonesia – to keep production costs low and attract the foreign capital that has helped it develop into one of Southeast Asia’s most industrialized economies.

The influx of foreign workers has left company owners with little incentive to raise wages or modernize their operations to boost productivity, say analysts.

The country’s top universities have also slipped in global rankings. None of them made it on to the latest Times Higher Education World University Rankings, an index of the top 400 universities globally.

Increasingly those in search of better education seek opportunities elsewhere. Twenty percent of Malaysia’s most highly educated now opt to leave for richer economies, according to a recent report by recruitment consulting firm Kelly Services. Most, according to government figures, have settled in Singapore.

The exodus of local talent means the country faces a shortage of skilled professionals, including bankers, researchers and engineers.