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This article was first published in the September 2016 Malaysia edition of Accounting and Business magazine.

Productivity has seldom been at the front and centre of the national conversation in Malaysia. That’s hardly a good state of affairs given that a country’s ambitions are inextricably tied to its efficiency in production. As World Economic Forum founder and executive chairman Klaus Schwab points out in his recent book, The Fourth Industrial Revolution, productivity is the most important determinant of long-term growth and rising living standards. 

It is not that the Malaysian government has overlooked the importance of productivity. Its development strategy for the five years leading to 2020 is very much dependent on unlocking the potential of productivity. The 11th Malaysia Plan (11MP) points out that Malaysia’s labour productivity level has some way to go to catch up with those of many high-income economies. The input-driven ways of the past, heavily supported by private and public investments, are no longer enough; there has to be greater emphasis on increasing productivity to achieve a more sustainable, inclusive and higher rate of economic growth.

Last year, Malaysia’s labour productivity (amount of GDP per hour of labour) was RM75,538. The 11MP goal for 2020 is RM92,300 – an annual productivity growth of 3.7%. This demands close to a doubling of efforts, given that from 2010 to 2015, productivity grew by an average of 2%.

In his message in the Productivity Report 2015/2016, international trade and industry minister Dato’ Sri Mustapa Mohamed said Malaysia needs to adopt ‘some very radical approaches’ to ramp up productivity growth.

In place of (often fragmented) government-led initiatives at the national level, the plan is to implement focused and comprehensive actions at national, industry and enterprise levels, spearheaded by industry champions and industry associations, with support from government.

Automation and upgrading of skills are to be intensified and there are plans to enhance the innovation ecosystem, which should yield better processes and technologies that can lift productivity.

But perhaps the most promising element of the plan is a nationwide productivity agenda and implementation plan. This encompasses the formulation of a five-year Malaysia Productivity Blueprint, the strengthening of the governance and institutional mechanism for implementation of productivity strategies, and the setting up of a dedicated national productivity portal.

According to Malaysia Productivity Corporation (MPC), a statutory body, the blueprint will address productivity-related issues and challenges in a comprehensive and cohesive manner, and design and develop improvement strategies, initiatives and programmes.

In addition, a National Productivity Council will be established to outline directions and formulate an action plan to boost productivity via the blueprint.

In the Productivity Report 2015/2016, MPC chairman Tan Sri Azman Hashim wrote, ‘As the clock ticks steadily towards 2020, raising higher consciousness on productivity will be the key towards effecting a habit-forming culture among Malaysians.’

In the same publication, Mustapa expresses his hope that with the upcoming release of the blueprint, ‘the spirit of productivity will continue to live and breathe amongst Malaysians’.

Given so much activity on the productivity front, there is plenty for Malaysians to talk about. And if the conversations translate into results, the target of becoming a developed nation by 2020 may well be within reach.

Errol Oh is executive editor of The Star