Tan Sri Mohd Sidek Hassan

At Your Servicerising income and savings, we can rely more on domestic investments. The limitationfor this is that technology, outside construction and plantation, is relatively lackingamong the local entrepreneurs. However, technology and management skills canbe bought from the marketplace or acquired through joint ventures.Malaysia has moved from import substitution industrialisation to exportorientedmanufacturing. A major criticism for the reliance on exportoriented industries isthe perception that we are a low cost producer and we have enough supply oflabour.In addition, our experience in electronics indicates that the value-added contributionis not too significant given its high import content. Further, this recession whichgot transmitted into our economy through the external sector, teaches us toincreasingly rely on domestic sources of growth.In reality, we are already facing a seriousshortage of labour and Malaysia is no longera low cost producer. Industries with highlabour content therefore have two choices:either they move overseas or they install aplan for upgrading with greater automation,computerisation and increasing use ofrobotics.To be sure, the demand for a liberal services sector within the Asean region in 2011and the changing economics of automobile industries worldwide, and especiallywithin Asean, as well as the entry of low cost players in China and India, demandthat our industrial structure rise in the value chain by ensuring that the productswe generate are embedded with the contribution of high skill, knowledge andtechnology and significant services content.They must as far as possible, be in the nature of final products and no longercomponents to be exported for further value addition elsewhere. The total valuechain has to rise fast to generate more value and high income in the economy,not only to compensate for the direct and hidden costs that we help meet, but122