Modeling Economic Growth in Contemporary Malaysia

The importance of the retail sector to the Malaysian economy especially in this volatile environment caused by the Covid-19 pandemic would be more prominent. The retail sector under the current Industry Revolution 4.0 would be prioritized to align with the challenges of future growth for retail sales and employment. In the Industry 4.0 environment, retail companies must put enough resources in embracing the major changes for maintaining their competitive advantages. This includes adapting and developing backend systems, creating effective storage and distribution networks that make products available to consumers on any time basis, and offering maximum flexibility in the last-mile delivery options. Retail companies will need to evaluate the importance of innovative ideas such as crowdsourced distribution networks, radio-frequency identification (RFID), automated locator that shift the look of logistics when evaluating newer, nimbler distribution models, and multichannel marketing that consist of online and offline customer interface.

Malaysian public and private universities have faced unprecedented challenges due to multiple government policies in the short and medium term – coupled with economic uncertainty, budget cuts, and the entrepreneurial university (EU) agenda. This pressure is aimed to both public and private universities in accordance with the third mission of the Malaysian Education Development Plan 2015–2025 and ranking agencies by effectively engaging with the community and business, generating income in the process of tackling fundraising. The purpose of this study is to fill that gap by exploring the perspectives of those who are part of the Entrepreneurship Architecture implementation, as intermediaries of knowledge exchange and the impact of interaction by embedding Artificial Intelligence (AI) in achieving the mission of Entrepreneurship University by the government. Therefore, the main objective of this study is to develop a new model for internal parties in public universities as a guide for policy development and strategies to achieve the EU agenda. The Entrepreneurship Architecture Model will be used to identify the existing determinants, the AI infrastructure, and how the demographic factors, e.g., staff and related universities, support the model.

Small Medium Enterprises (SMEs) are the backbone of Malaysian economy since they are the largest category of business in the country and as such provide paramount contributions. However, referring to the past studies on SMEs in Malaysia from the year 2001 to the most recent (2020) studies, it was found that SMEs faced various issues, challenges, and hindrances, thus preventing the growth of their operations. Many SMEs also have problems to ensure their sustainability as well as to remain competitive in the market and changing environment. This chapter will provide an overview of SMEs in Malaysia. The discussion begins with the definition of Malaysian SMEs, followed by the contributions of SMEs in Malaysia. The last part is on issues and challenges faced by SMEs entrepreneurs in Malaysia.

Malaysian small and medium-sized enterprises (SMEs) are facing human capital development issues due to unskilled employees. The institutes of Malaysian education are providing ineffective science, technology, engineering, and mathematics (STEM) education which are generating unskilled graduates as a future workforce. The low capability of Malaysian graduates affect the performance of Malaysian SMEs. Therefore, the main purpose of this study is to examine the effect of STEM education in solving the human capital development issues for the enhancement of Malaysian SMEs performance. The current literature explores the ineffective system of STEM education for Malaysian graduates which result in human capital development issues in Malaysian SMEs. The curriculum of Malaysian education institutions plays a pivotal role in making the university graduates skillful since a teacher should teach the syllabus according to the need of the national curriculum and the student must learn practical knowledge for the sake of the professional employee in future. Hence, this study identified the significance of properly provided STEM education to deal with the human capital development issues faced by Malaysian SMEs. Effective STEM education is important in generating the human capital as it makes the university graduates skilled and capable which enable them to successfully meet the industry needs in future. Likewise, through the development of human capital, the performance of Malaysian SMEs could be improved.

This chapter deliberates Malaysia's involvement in innovation sector transformation and describes concepts of technological parks, clusters, and innovation networks. A vast of academic writings have been found interest toward the issues. Thus, this chapter also defines the important terms and highlights some literatures in Malaysian context as innovation clusters and networks have given rise to a vast stream of works in recent years. Innovation has been recognized as an important factor for the success of Malaysia with the support of new technologies and new product development. Malaysia Technology Parks helps to accelerate product innovation within the private sector in collaboration with higher institution education and research agencies from government agencies, government link companies, or nonprofit organizations. In Malaysia, innovations take place in industrial clusters whereby from this clustering, the industry will benefit the cost reduction, access to talent, easy access to information, and opportunities for more collaboration and networks. Innovations could be seen to relate to business networks from interaction between business partners or through changes to interaction patterns among various business partners. Finally, this chapter highlights the expectation in innovative sectors, the strategy and type of industry boomers in Malaysia, and technological transformation as a platform for innovative industry.

COVID-19 pandemic has affected the whole world, socially and economically. It changes the whole scenario, limiting our daily activities and the business environment. It creates a chaotic situation where people are forced to stay at home, do very limited things. Digital entrepreneurs seek opportunities instead of problem in such situations. In Malaysia, the digital entrepreneurs strategically maneuver their activities with their business operations while other businesses are forced to close. In fact, COVID-19 pandemic offers advancement for digital entrepreneurs and also offers for others to follow the footsteps of active digital entrepreneurs. The online business will become norms post COVID-19, and businesses shall be done across the borders without much hustle. International business for the small enterprise is expected to be common with the advancement of information technology for communication and reliable banking system.

The Malaysian oil palm has seen steady progress. Started in Malaysia as an ornamental plant, it has turned into a huge industry. Oil palm production has yielded unlimited economic profits and is currently an emerging Malaysian economic sector. Malaysia currently accounts for an overwhelming contribution to the production and export of palm oil worldwide, which is 39% and 44%, respectively. From around 4.49 million hectares of land, a massive 17.73 million tons of palm oil and 2.13 tons of palm kernel oil were produced. It has been widely use as food products, cosmetics, livestock feed, as well as in bioenergy industry. This is in line with the fast-growing global demand for the palm oil products. Nevertheless, it is currently experiencing a period of slow or less growth in terms of contributing naturally to gross national productivity. Issues such as extreme weather, aging trees, and plant diseases are most prominent among the natural factors that are hindering the growth of the industry. The global pandemic of COVID-19 is also contributing to the current slow growth of palm oil sector. Malaysia has a crucial role to play in meeting the growing global need for oils and fats, as Malaysia is one of the palm oil and palm oil products' major producers and exporting countries.

Since the 1970s, the sustainable development was developed from science and environmental crusade. Since then, there were many programs done in the field but not named as “Sustainable Development.” The environments have affected because of the process of the development which was noticed by the world community. Malaysia has made a commitment to the 2030 Agenda in September 2015 for the future of mother earth. Despite the increasing attention toward sustainable development and circular economy across the world, understanding of the potential sustainability synergy among developing countries remains sluggish. This chapter therefore briefly discusses the development of circular economy within developed and developing countries. The chapter then narrowed the discussion toward Malaysian practices of the circular economy. Malaysia also recorded among the countries that faced waste management issues in Asia. The detailed discussion includes Malaysian acceptance and initiatives in reaching a circular economy within the past years, present, and future. The discussion surrounds the circular economy practiced by Malaysian industrial players as well as government's initiatives in encouraging and educating Malaysian toward embracing the idea of circular economy and sustainable consumption. As most countries embrace green technologies, Malaysia has taken proactive steps toward adopting green technology. Among the four main policy priorities are energy, environment, economy, and social, the key to green technology in driving the country's economy while promoting sustainable development. In fact, the major economic drivers of the Malaysian economy involve industrial activities such as palm oil, mining, and manufacturing, which are now beginning to take steps toward the development of green technology development. The application of green technology can provide a balance between economic development and environmental preservation as well as solutions to climate change issues. The initiative aims to make Malaysia one of the best countries in the world with sustainable economic growth, innovation, and prosperous citizens by 2050.

This chapter sneaks a glance over five decades of Malaysian experience in nurturing and commodifying the halal industry. The assessment is made possible via the application of the industry value chain (IVC) approach. IVC shows that firms with the ability to conduct their business activities in compliance with government policies pertaining to halal matters will enhance their market prospect. Circumscribed to halal-related policies required meticulous efforts, yet it is a must to participate in the Malaysian halal industry. The analysis finds that the three key business activities like logistics, marketing and sales, and operation are the aspects which need a realignment to halal policies. The interconnected nature of the halal industry brings great opportunity for the firm to attain formidable business strategies for survival in unrelenting business climates. The close-knitted relationship among global halal authorities also benefits industry players in a way to expand and promotes their halal venture beyond Malaysia through year-round global halal trade exposition. Although the halal market offers lucrative prospects, firms need to address and tread carefully around the constraints presented in the market. Cost of realignment to policies, risk of asymmetric information, and certification fraud are among major barriers that hinder starting an operation in a halal setting. The IVC approach creates a clear picture regarding the market outlook, constraint, and need of firms interested of venturing into the halal industry. The chapter, however, covers the only gist of IVC analysis where the calculation of IVC for every chain of activities is not included here.

The abolishment of Goods and Services Tax (GST) has had the effect of reversing an initial success in broadening the country's tax base. In contrast, the abolishment of GST has had the effect of reversing an initial success in broadening the country's tax base. Moreover, the government has a better capability of managing debt than the private sector due to its central bank with fiat money. However, Malaysia's total reserves have not increased significantly in recent times, despite the trade surplus, given the movement in the financial accounts. In such circumstances, it is incumbent on the government to expand its balance sheet to pick up the slack of the private sector. Hence, the reform agenda has restored Malaysia's image globally. More importantly, a reminder from the great recession of 2008 is that the private sector, when faced with great uncertainty, cannot continuously provide employment. However, before policymakers ponder to the views of rating agencies, they need to consider the points above and debate among themselves about what is truly in Malaysia's best interest. As the matter of fact, manufactured goods accounted for some 86% of Malaysia's total exports. We see no conflict of “crowding out” if the government and government-related companies take on radical risk that the private sector is unwilling or incapable of taking on. In fact, manufactured goods accounted for some 86% of Malaysia's total exports. It is important that policymakers understand that the government's deficit is the private sector's savings. The direct cross-shareholdings of government linked corporations (GLCs) and its resultant crowding-out of private investors have received heightened policy priority by the government where major reshuffled on the reporting lines of various GLCs by ministries contributes cross-shareholdings of GLCs and its resultant crowding-out of private investors.

Though to stay competitive is important for an organization's survival, today's organizations need to deal with various challenges. For example, organizations need to deal with the future uncertainty; need to know when to embrace change; need to recruit the right talent; need to keep abreast with the rapidly changing technology; need to remain ethical in doing business; and need to deal with increasing competition in the market. Thus, good strategies are needed if they want to stay competitive. Organizations must be able to know the competition and be different; update the organization's image; look after the existing customers; target new markets; be the best employers; be able to foresee the future; exemplify and position strengths from weaknesses; take into consideration the local context; use data and analytics to support strategies; prioritize creativity and innovation; utilize the data; remain relevant; and explore partnership opportunities. As for Malaysia, various strategies have been developed to support organization sustainability. These include transforming the school system in order to produce high-skilled and semi-skilled workers; strengthen Technical Vocational Education and Training (TVET) and Science, Technology, Engineering, and Mathematics (STEM) education activities; digitalize Malaysian employment landscape; and create good networking and collaboration with other countries. Malaysia also introduces various initiatives to support business sustainability such as awarding Sustainable Business Awards Malaysia to any Malaysian company that has shown a balance between making profit and acting sustainably; come out with competitive fiscal and monetary policy; and strengthen the human capital development.

Malaysia has shifted from a labor-intensive, agriculture-based economy since its independence in 1957 to a knowledge and innovation-based economy. Human capital development (HCD) is a key enabler for driving and sustaining Malaysia's socioeconomic growth. The education and training system is the main platform for HCD intervention. To sustain and achieve goals, long-term survival, competitive advantage, and sustainability, the workforce is optimized through comprehensive HCD interventions to provide the necessary knowledge, skills, and competencies needed to work effectively in a rapidly changing and complex environment. Numerous efforts have been made by the government to ensure that the education and training system has the capacity to enhance the quality and availability of intellectual and skilled human capital to support the transition toward knowledge-intensive activities, sustain economic growth, and compete in the global market. The country's development plans and policies as well as the economic development which lead toward a knowledge-based economy with a knowledge-based workforce have charted out clear transformation journeys for the development of the human capital ecosystem. This chapter presents an overview of the landscape of HCD in Malaysia. Relevant reports, plans, policies, and strategies to strengthen human capital through education and training is reviewed. Finally, a few issues and challenges that Malaysia experiences are discussed.

The world we are living today is faced with social challenges that call for radical innovation. The rapid pace of technological developments played a key role in delivering social developments in a cautious manner that will ensure a promising future for social capital. Social innovation is a phenomenon that is put forward to urge countries to find solution to address the recurring problems of social inequalities that were not able to be eliminated by the existing rules and policies. It involves understanding the complexity of the society ecosystem and task calls for a partnership and networks between the nonprofit, public, and private sectors. This chapter explains how Malaysia utilizes public–private partnership to promote social innovations in the country. Through the 11th Malaysia Plan, Malaysia envisages to put forward the well-being and development of the people through social innovation to balance between the social and economic development. In order to fulfill this aim, Malaysia has implemented various programs and policies through the social innovation ecosystem that has been formed. The ecosystem is comprised of four initiatives, which includes microfinancing; social entrepreneurship; public service delivery; and grassroots innovation of science and technology. These initiatives will be collaboratively developed using the concept of 4P, which is the public, private, people, and professionals. Each of this initiative is discussed thoroughly in this chapter alongside with the programs and policies that have been carried out since then. Additionally, the chapter also includes the discussion on the issues and challenges that could be seen and presumed to be the hindrance to the success of the social innovation development.

It is undeniable that proper planning of spatial development and local regional policies are paramount to ensure whether a country is prosperous or not. In order to ensure its prosperity, discussion on administrative arrangement, spatial development, and regional policy issues in the Malaysian context will be focused. In addition, the importance of Malaysian major development policies and the authorities responsible for its development and implementation are highlighted, followed by the roles of urban development planning. Lastly, Malaysian regional economic corridors, specifically the Northern Corridor Economic Region, are highlighted to show the emphasis given by the Malaysian Government on regional spatial development issues.

Mental health is a universal issue nowadays, and poor mental health is detrimental to any individual's optimal health and well-being. Instead of keeping up with mental health, most civilization encounters the opposite continuum of mental health, a.k.a. mental illness. Unfortunately, mental health issues are more intense during the COVID-19 pandemic and its impact on public organizations and public servants more severe while rendering their social services to the Malaysian citizens despite the danger of the pandemic to them and their family’s well-being. Hence to cure the disease, manifold ways and means are presented. Most public servants are Malay Muslims and hence recommended treatments are originated from Islam teachings, thus proposing the Islamic Mental Health model to improve their mental health during this intense situation is proper. The model emphasizes on fulfilling the deeds of habluminallah and habluminannas. Habluminannas complements habluminallah as the formation of a complete mental health model from Islamic perspective. Habluminallah focuses on the person's relationship to his Creator, while habluminannas focuses on the person's relationship with others. These two types of morals, that is morals to Allah (habluminallah) which is indicated by the command that Muslims must establish a good relationship with Allah by not associating Allah with others and Muslims also must show morals toward fellow human beings (habluminannas) shown by the command to do good to both parents, close relatives, orphans, poor people, near neighbors and distant neighbors, peers, people on the way, and servants. Habluminallah and habluminannas are two sides of a coin that cannot be separated. The two are the foundation of comprehensive mental health in Islam. So Islam encourages its people to practice both worshiping of the Creator as well as encourages social relations, such as paying attention to the fates of the weak. Even if referred to the pillars of Islam, there is a combination of habluminallah and habluminannas, a combination of vertical and horizontal relations.

The purpose of this study is to examine the key challenges currently prevalent in the Machinery and Equipment (M&E) sector of Malaysia and to offer an integrative Industry 4.0 strategic roadmap. The Environmental Scan 2016 and 2018 provides a basis for the identification of the challenges in the M&E sector of Malaysia. The study further investigates the challenges by analyzing the responses of four major stakeholders in a Focus Group Discussion. The findings reveal that the M&E sector suffers from very low automation adoption. This study is among the first few to analyze the challenges in the M&E sector and lay out a strategic roadmap encompassing the role of each stakeholder at every phase of the transition toward Industry 4.0. The proposed method of transitioning through targeted incentive schemes will help academics and practitioners in developing concrete and workable action plans to conduct the transition process.

The change in Malaysian financial environment can be attributed to digitalization as banks are racing to digital maturity by 2020. Historically in Malaysia, the use of credit card was a Fintech development in the 1950s to help Malaysians minimize the burden in carrying cash all the time. The aim of financial technology in the 1990s was to encourage bank customers to use the online banking system instead of only automated teller machine. Fintech services are swiftly interrupting banks' services globally. Similarly, Malaysia's banking sector is experiencing the interruption since as more Fintech organizations are innovating new Fintech service to improve convenience for clienteles. Numerous regulatory agencies in Malaysia and the Malaysian government have set up several initiatives to encourage and provide a vigorous growth in the Malaysian Fintech and digital asset regulatory environment. Expectation Confirmation Model, Technology Acceptance Model, and Cognitive Model are viewed as the most popular frameworks that discuss the continuous intention to use information system. The combination of these three models has led to the creation of Technology Continuance Theory (TCT). TCT postulates that five prominent constructs or antecedents are depicted as key indicators in explaining the users' intentions for continuous use: (1) confirmation, (2) perceived usefulness, (3) perceived ease of use, (4) satisfaction, and (5) attitude. Furthermore, TCT adds to the argument on the consumers' continuance adoptions by assimilating satisfaction and attitude into a single construct.

The franchising business becomes an essential to the economy of Malaysia and social. It also considers a popular choice to develop entrepreneurs particularly among Bumiputera in Malaysia. Recognizing the importance of the franchising business, the Government of Malaysia through the Ministry of Domestic Trade and Consumer Affairs (MDTCA) has developed programs and activities to accelerate growth of the franchising business. In February 2020, a total of 915 franchise systems or franchisors have been registered under Malaysia Franchise and subsequently few franchisors have penetrated worldwide such as in Saudi Arabia, Indonesia, United State of America, and Australia. At the same time, Perbadanan Nasional Berhad (PNS) and Malaysia Franchise Association also strongly take part in many franchise initiatives, programs, and activities to support the development of franchising business in Malaysia. Besides that, Malaysia also has developed the Franchise Act to safeguard the franchising industry. Nevertheless, there still exist some issues and challenges. Hence, this paper aims to review the franchising business in Malaysia by discussing the development of franchise business in Malaysia, the supports, and the issues and challenges.

This chapter discusses Malaysia's foreign economic policy and trade performance. Since independence, Malaysia has been active in regulating its foreign economic policy. The policy is aimed at making the country a nation that welcomes friendly and fair policy through diplomacy and simultaneously maintaining its honorable sovereignty and local interests. In 2018, the Malaysian government outlined its foreign policy framework that emphasises four (4) major components, namely, (1) the direction of foreign policy, (2) empowering the Ministry of Foreign Affairs – MOFA (Wisma Putra), (3) enhancing interagency collaboration and lastly, (4) increasing public and civil society participation. Through the framework, Malaysia has been strengthening its international relations, particularly among Islamic nations and the European Union countries. In terms of trade, Malaysia has been increasing its trade and this can be seen in its trade surplus performance. For more than 20 consecutive years, Malaysia has experienced trade surpluses. However, the recent COVID-19 outbreak has dampened the country's economic growth. Despite the detrimental impacts of the outbreak, Malaysia remained positive about strengthening the economy in the future. In terms of trade partners, Malaysia has built close relations with China, Singapore, the United States, Hong Kong, Japan, Thailand, India, Taiwan, Vietnam, and South Korea. In terms of export products, Malaysia mainly exports electrical and electronic products, petroleum products, chemicals and chemical products, LNG, manufactures of metal, machinery, equipment and parts, optical and scientific equipment, palm oil, crude petroleum, and rubber products. Even though trade has caused several issues such as overdependence on import product, Malaysia has maintained a positive outlook on trade. Trade helps fulfill the domestic demand in which local producers are not able to satisfy. Other than that, Malaysia also consistently produced goods that are demanded by other countries. In conclusion, Malaysia will always forge ahead to improve its international economic relations and to gain benefits from the international economy and world trade.

Logistics play a vital role in today's economy. As the critical component in the supply chain, logistics is a sector able to be translated as a competitive weapon to the businesses and the nation. Malaysia is a developing country which, laid in the middle of the trade route between west and east, constantly eyes the opportunity to exploit the logistics sector as a platform to bring out its domestic products to the international market and to bring in investment from the global players. Good transport infrastructure and conducive business environment are the ingredients for positioning Malaysia as a hub of logistics activities at the regional and global level. One of the initiatives to achieve the objective is the commencement of Digital Free Trade Zone as a regional e-commerce e-fulfillment hub and drive export of Malaysian SME via e-commerce. As the government is looking toward shifting manufacturing approaches from labor-intensive to capital-intensive strategy, the container ports and airports are equipped with the state-of-the-art technology to ensure efficient movement of cargoes and passenger at the terminal. The progress of logistics and transport activities in Malaysia, coupled with recent development in the commercial and business-related projects, maybe becoming the most important reasons why the foreign investor should consider investing in Malaysia.

In Malaysia, small- and medium-sized enterprises (SMEs) are the significant contributor to economic growth. However, since the coronavirus outbreak, Malaysian SME business activity has been severely slowed. Therefore, during this COVID-19 pandemic crisis, government business supports and assistances are indispensable because if SMEs go down, the country will be affected. This chapter will focus on supports and assistances provided by Malaysian government on SMEs impacted from the COVID-19 pandemic crisis. The chapter will be introduced with the background of SMEs in Malaysia, follow by scenarios of COVID-19, the Movement Control Order imposed by Malaysian government, and the impact of COVID-19 on SMEs. Next the chapter will discuss the government supports and assistances and follow by government monitoring on supports and assistances given. Lastly, the chapter ends with suggestions for SME recovery of COVID-19 pandemic crisis.