Future growth is associated with the new economy or k-economy. It is one that is driven by information. The current challenge is to focus on the inadequate supply of highly skilled and informed human capital.
With the new economy, Malaysia is the process of transforming from a production centered economy (P-Economy) to information based (K-Economy). The new economy, or refers to an increased intensity in the exchange of information relative to economic activities and the increasing globalization of economic affairs.
For the newly industrialized and fast growing countries like Malaysia, the human capital development is an integral and important agenda in the national master plan.
However, one important question, is how Malaysia can most effectively plan its human capital development given the important role assigned to it? Thus far, Malaysia’s plans only emphasize targets and later projections, or focus on the primary of employment or manpower requirements by the various sectors in the economy.
Malaysia’s progress in the transition to a ‘knowledge-based’ economy has been hampered by its lack of appreciation and investment in research and development (R&D), and in innovation activities.
Investment in those areas would allow Malaysia to create and extract more meaning and value in unconnected pieces of information in order and to extract economic value from these elements. It is vitally important that even while the country pursues more sophisticated, technology-intensive tools to manage flow, one should also pay attention to human capital development, education and training.
The pursuit of education, training and capacity building must be at the forefront of any initiative to enhance and manage information. This is why the government remains committed to enhancing access to quality of education, beginning at the primary level right up to the tertiary level.
Issues relating to demand and supply of highly skilled labor, positive values, the provision of relevant human resource training and education, creative thinking and improvements in ICT literacy are imperative for economic growth and suitable development in the competitive environment of the New Economy.
The combined forces of the information technology revolution and increasing pace of technological change are driving forces in the advance of information. The emergence of the new economy can be characterized in terms of the increasing role of information as a factor of production and bears an impact on upon skill, learning, the organization and innovation.
Is Malaysia ready for the k-economy? According to the knowledge-based Economic Index (KDI), which was used to measure preparedness the major components of the include computer infrastructure, info structure, education and training, research and development (R&D), and technology.
In the year 2000, Malaysia was ranked 17 from 21 according to the KDI. This comparison illustrated that there was a big gap between Malaysia and other nations in terms of their level of preparedness as far as participation in the k-economy is concerned. Much needs to be done to narrow the gap. A big part of that challenge lies in human capital development.
To place Malaysians at the forefront of the information superhighway, investment in human capital is critical since k-economy demands knowledgeable, creative and innovative workers.
In this regard the biggest challenge for our government and for the private sector is to develop our human capital development program in preparation for the new economy. Malaysia must begin to reassess how it views, its students, employees and citizens as a whole.
However, when a country enters the age of ‘boundless information’, where information becomes increasingly complex and multidisciplinary, efforts must be made to ensure that students, employees and citizens as a whole are able to cope with this complex structure and content associated with the information and be able to thrive and succeed.
The cost of educating and training should be viewed not as an additional cost but rather as an investment for the future.