AMID challenges from large regional economies, we should be more prepared to attract foreign knowledge-based investments.

As the nation undergoes rapid development as a knowledge-based economy, there are a number of factors that will be key determinants in regional competitiveness.

Firstly, Malaysia needs to focus on developing the right human capital. Under the Third Industrial Master Plan, projects based on human resources development had been highlighted. This is aimed at helping to improve the supply of knowledge-based workers to meet the demands of the nation’s knowledge economy.

There is also a need for the Government and the industry to address the shortage of knowledge workers and skills mismatch. Providing certification for knowledge-based workers to qualify them for specified job areas is useful.

For example, companies in the semiconductor industry will have to continue to rise in the value chain. Many have now gone into design and development, technical support, customer support and shared services.

This expansion has resulted in the need for more knowledge-based human resources and underscores the importance of the Government’s investment in all levels of education.

The nation’s tax system should also be made more investor-friendly. A further reduction in corporation taxes and the introduction of a single-tier tax system will help the country in the face of regional competition for investment inflow. Service tax for ICT services should also be abolished.

The Government should continue to attract more knowledge-based investments by essentially boosting Malaysia internationally, given the stiff competition from ICT players based in India and China.

This can be done via the continued push by local trade missions to further promote itself abroad as business-friendly and a country that enjoys low cost of doing business.

Its should continue to make it as easy as possible for foreign tech investors seeking to set up new investments in the country. This can be done by enhancing the Government delivery system to give the country a competitive edge.

Thanks to the bullish global investment trends of major multinational ICT companies and the strong efforts by Multimedia Development Corporation (MDeC) to expand its presence in the overseas markets, the local tech industry will likely see an increase of foreign investors.

Some of the notable foreign investments in the our ICT industry will be in the form of foreign companies buying stakes in our ICT giants or setting up their operations in the cybercities.

The nation’s massive development projects in the Iskandar Development Region (IDR) project and the Northern Corridor Economic Region (NCER) are also set to create a huge inflow of knowledge investments over the years.