MALAYSIA's productivity growth rose in 2021 with a 1.8 per cent increase, a boost from -5.5 per cent in 2020.
The rise denotes the country's on-track economic recovery, foreseeing a positive trajectory for Malaysia to achieve 3.6 per cent growth in 2022. This signals revival, but the country has not yet returned to the pre-pandemic productivity performance.
Malaysia Productivity Corporation (MPC) has been driving Malaysia's productivity at the national, sectoral, and firm levels since its inception in 1966.
MPC's roles grow as the country progresses towards modernisation. Post-pandemic, MPC strengthens its function to affect national economic recovery as envisioned in the 12th Malaysia Plan.
One of MPC's foci is raising firm-level productivity to impact growth at the sectoral and national levels. MPC aligns with National Recovery Council chief executive officer Tan Sri Sulaiman Mahbob in his article entitled "Support Macroeconomic Steps with Micro Measures", published in the New Straits Times on April 7, that micro measures are needed to support macroeconomics steps and promote change.
MPC is poised to play a more dominant role. More needs to be done to increase firm-level productivity.
Productivity matters. Improved productivity raises income, increases goods and services, and lowers business costs. Businesses generate more sales, and the rakyat enjoys a better standard of living with higher productivity.
Quality regulations are paramount for firms to operate productively and competitively, forming a conducive business environment for enterprises to grow and expand.
MPC is proliferating its signature Malaysia Mudah or MyMudah initiative to enhance the business regulatory ecosystem to facilitate firms' operations by reducing the unnecessary regulatory burdens on businesses.
MyMudah's overarching aim is to ensure that regulations are best in quality, comprehensive, agile, and responsive to boost firms' productivity and competitiveness.
Through MyMudah, the government is committed to reducing the burden of unnecessary regulations on businesses and the rakyat by 25 per cent per annum.
MPC has been conducting engagements and capacity building programmes to establish MyMudah Units at government bodies and business associations.
More than 50 sessions have been conducted covering all ministries and federal government agencies, state governments, local councils, and major business associations nationwide.
MyMudah is a direct platform for firms to channel their issues and challenges in complying with business regulations. Firms can also actively participate in regulatory experimentations with the relevant stakeholders and authorities to ensure regulatory interventions' inclusive formulation and implementation.
MPC is also scaling up its Advocate-Nudge-Track-Advise-Coach (ANTAC) initiative to benefit firms in their business recovery journey through innovation, mechanisation and automation, and digitalisation. The initiative stimulates change at the firm level towards better performance, productivity, and profitability.
Advocate — Through advocacy, MPC creates awareness on productivity, that productivity is the game-changer for better delivery of products and services.
Through webinars and intellectual discourses featuring highly credible organisations and individuals in productivity, MPC aims to reach out to 40,000 businesses this year.
Nudge — Nudging in Behavioural Insights (BI) is a human-centric approach to influence people to make better choices for themselves and society. BI combines insights from psychology, ethnography, behavioural economics, and neuroscience to understand how people behave, allowing for better design of interventions. Nudging can promote more impactful change.
Track — MPC has developed several tools for firms to track and measure their current state and performance, assisting strategic planning. These are process improvement tools to facilitate firms to increase productivity. What a firm can measure, it can improve. For example, Productivity1010 is for firms to assess digital transformation, and the ezBE Assessment Tool evaluates business practices and operations.
Advise — MPC's Business Virtual Advisory Clinics (BVAC) is a platform for firms to connect with experts in their fields. BVAC facilitates firms to find solutions to business challenges. The advisory platform is scaled up by 11 Productivity Nexus according to main economic subsectors to offer advice to at least 10,000 firms in 2022.
Coach — A more thorough, hand-holding approach through coaching is provided to firms until the intended change is manifested. One of the programmes firms can benefit from is MyReskill IoT for business digitalisation. Participating companies develop Proof of Concept (POC) projects using the Internet of Things as the enabler. The programme is expected to benefit 5000 firms in 2022.
MPC's programmes and interventions have seen commendable impacts on firm-level productivity. MPC facilitates regulatory delivery for modern farming, enabling farmers to shift from open-sided to closed-sided poultry houses. The change improves poultry products productivity by 20 per cent and minimises business operational costs by 15 per cent.
K-One Technology Berhad exemplifies the success in transforming the production environment to be more data-centric. Its real-time dashboard keeps the production floor informed of any alerts and anomalies, and condition-based maintenance reduces downtime efficiently.
Ainaz Food Processing Enterprise is another success story of how digitalisation improves production. Its product delivery increased up to 30 per cent through the IoT monitoring solution, allowing food-processing machines to record production more accurately and efficiently.
Isoplas Sdn Bhd improved its productivity by 10 per cent through autonomous control at the factory plant. Using sensor devices, the company could monitor machine operation without being physically at the plant.
In the case of Awan Packaging Sdn Bhd, process improvement increased the productivity for Instapak output of plastic packaging. The manufacturing time was significantly reduced, leading to 37 per cent productivity increment.
The growth potential at the firm level is enormous, which can be translated into higher business profitability.
Process and product improvements leveraging digitalisation, automation and mechanisation, and innovation are necessary for firms to increase business performance and sustainability. Productivity is the game-changer, and MPC will do more to facilitate firms to be more productive.
In this competitive world, it is productivity enhancement that really matters. In this regard, MPC is well-positioned to assist changes at the micro level.