chapter 6 - Malaysia Productivity Corporation ( MPC)

Utilities services registered 2.3% in TFP growth
and contributing 49.1% to output growth. The
Government’s approval to increase electricity tariff
by 7.1% effective from 1 June 2011 had to a certain
extent, improved the performance of the subsector.
The sub-sector was also facing increase in
price of materials such as copper, steel, aluminium
and gas.
Other services sub-sector encompasses consumer
services namely, health, education and business
and professional services. The sub-sector witnessed
a TFP growth at 2.4%. Even though its TFP grew at
a modest rate, its contributions to output growth
were significantly high at 52.3% with labour at
28.5% while capital was 19.2%. This implies that
significance improvement in managerial system,
efficiency and quality of inputs have taken place in
the sub-sector.
Strategies and Outlook
The services sector in Malaysia holds enormous
potential to accelerate the development of an
economy and endorse overall well-being of the
society. It offers countless commercial prospects to
the investors and possesses the capacity to produce
considerable employment opportunities in the
economy. Thus, the services sector is considered to
be an integral part of the economy and includes
various sub-sectors spread across the country.
Services sector’s ability to achieve a high rate of
productivity growth was due to deregulation and
consequent exposure to the discipline of increased
competition. Its capacity to exploit advances in
information technology either by integrating these
advances successfully into existing operations or
using them to develop new services and in some
CHAPTER 6
cases, the industries themselves are recent creations
of the IT revolution. To sustain productivity growth,
Malaysia needs availability of high quality talent
and highly skilled workforce. One of the avenues
to achieve this is through the establishment of
Talent Corporation by the Government. In addition,
Institute of Higher Learning (public and private)
needs to ensure the economy has a supply of
graduates with not only academically excellent,
but also the ability to relate quickly to business
processes and business applications. With highly
skilled workforce, companies have the abilities to
engage and compete in higher-value products
such as knowledge process outsourcing in areas
such as investment, market and legal services.
The expanding share of services in the economy
implies that growth in overall productivity
and living standards in the economy will likely
be increasingly influenced by productivity
development in the services sector. As such, raising
productivity in the services sector will be critical
for economic growth.
LOGISTICS SERVICES
Overview
Logistics services are vital to economic development
and assume a significant role in facilitating trade
expansion and economic integration of regions.
Importance of the logistics services can be seen
by its contribution towards GDP. This is particularly
the case for Malaysia which adopts an open and
highly trade dependent economy with significant
volumes of investment. Total trade for 2011 valued
at RM1.3 trillion was transported both domestically
and internationally which could benefit from timely,
reliable and efficient supply chain, distribution
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