Why did Malaysia’s worker productivity rise 2.4% in 2024?

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Malaysia's Worker Productivity Rose Due to Strategic Investments in Technology and Workforce Development

Malaysia's worker productivity saw a 2.4 per cent increase in 2024, reaching RM99,265 in value added per worker, up from RM96,914 the previous year. This improvement is attributed to concerted government strategies focused on transforming the manufacturing sector through technological adoption and automation, alongside efforts to refine the national workforce composition. The calculation of this productivity rate is based on the Gross Domestic Product (GDP) divided by the number of workers aged between 15 and 64.
Government Initiatives Target Technological Advancement in Manufacturing

The government is actively implementing strategies aimed at modernising the manufacturing sector, with a significant emphasis on integrating the latest technologies and automation. The New Industrial Master Plan 2030 (NIMP 2030) specifically outlines a commitment to enhancing manufacturing sector productivity through substantial investments in new technologies. A key objective within this plan is the establishment of 3,000 smart factories by the year 2030, indicating a clear direction towards a more technologically advanced industrial landscape.
Workforce Planning Includes Reducing Reliance on Foreign Labour

The 13th Malaysia Plan includes strategic targets for workforce management, notably aiming to decrease the proportion of foreign workers within the total labour force. The plan seeks to reduce this ratio from the current 15 per cent down to 10 per cent. This policy shift suggests a move towards optimising the domestic workforce and potentially fostering higher productivity through skilled local talent, complementing the technological upgrade initiatives.
Specific Programmes Support Productivity Enhancement Across Sectors

Several targeted programmes are in place to drive productivity gains. The Malaysia Productivity Corporation's Productivity Nexus, for instance, is focused on boosting productivity across 14 key sectors, including vital industries such as electrical and electronics, chemicals, and pharmaceuticals. Furthermore, the Smart Tech-Up programme, building upon the foundation of the earlier Industry4WRD initiative, aims to further embed technological solutions and advanced practices within businesses.
Strategic Financing Accelerates Industrial Transformation

To support these ambitious goals, the government has established mechanisms like the NIMP Strategic Co-Investment Fund (CoSIF). This fund employs a blended financing model designed to provide financial backing for high-impact strategic projects. By facilitating investment in critical areas, CoSIF plays a crucial role in accelerating the transformation of local industries and underpinning the overall increase in worker productivity.

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Why did Malaysia’s worker productivity rise 2.4% in 2024?

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