KUALA LUMPUR: Malaysia needs to make the leap to more innovation-driven activities in order to attract more investments and to remain competitive in the global value chain (GVC), according to a report released by the World Bank today.
Titled “World Development Report 2020: Trading for Development in the Age of Global Value Chains”, the report highlighted that so far, Malaysia has succeeded in transitioning from commodities to advanced manufacturing over the last 30 years but more needed to be done.
World Bank country manager for Malaysia Firas Raad said Malaysia’s competitiveness in attracting high-quality investments will have to be strengthened as well as improving the return on tax expenditures to maximise the gains from investments.
“Malaysia operates at the heart of GVCs in key sectors such as electronic and electrical products, trading well over 100% of its GDP. But to move forward, the country needs to make the leap from ‘advancing and manufactured services’ common in successful middle-income economies to ‘innovative activities’ seen in successful high-income economies.
“To do so, this will require several new policies and institutional reforms in areas such as human capital and skills, investment and competition policy and digital adoption,” he said.
At the same time, the report also pointed out that human capital reforms will also be needed to build and retain advanced workforce skills, while deepening trade agreements to cover investments and services for the purpose of boosting competition.
Finally, measures will be needed to boost digital adoption by businesses, especially small and medium-sized enterprises.
source https://www.thesundaily.my/business/world-bank-more-innovation-needed-to-stay-relevant-in-global-supply-chain-GK1950833
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