Building competitiveness

FOR years, the argument against raising the minimum wage has been the knock-on effect on the competitiveness of industry and wages. The claim was that higher wages would erode profits and also the ability of businesses to compete.

Guess what? The top-20 most competitive economies in the world are all high-income nations, with the most competitive being the world’s largest economy.

Such rankings show that it is not wages that impact the competitiveness of a company, or in this case a country. The challenge now for economies, though, is different than in the past. Previous industrial revolutions laid the foundation for many economies today and given the complexities of Industrial Revolution 4.0, those issues now will craft what competitiveness will mean for future economies.

The World Economic Forum said as much. It said the index integrates well-established aspects with new and emerging levers that drive productivity and growth and emphasises the role of human capital, innovation, resilience and agility, as not only drivers but also defining features of economic success in the Fourth Industrial Revolution.

Malaysia will craft new policies to deal with the nuances of what the future econom- ic drivers will be. As it stands, Malaysia’s position in innovation capability was the lowest of its score when ranked as the 25th most competitive economy.

Human capital development, concentration on science and technology and the fostering of entrepreneurism need to be cultivated to push Malaysia’s ability in the new world. The steps taken by the government in the review of the 11th Malaysia Plan shows that it knows what to do. Reforming the way things are is the first building block towards improving the ability of innovation, where creativity and knowledge are the essential ingredients in driving the economy of tomorrow.