Islamic banking and tech sectors may play major role in 2020
The report said Malaysia has been positioned as a centre of excellence for Islamic banking and will continue to be a global hub for Islamic finance this year.
“An industry largely driven by foreign direct investments, the Islamic banking scene in Malaysia has been identified as a key focus and high-growth industry by the Malaysian government as well,” it said.
On technology, it said the tech industry will be a prominent driver of Malaysia's economy in the new year.
Malaysia, Randstad said, continues to be a desirable staging ground for shared services centres, and competes with other markets like India to attract companies to build their large centres of operations and conduct research and development activities here.
“With talks about implementing the 5G network, technology will continue to take centre stage in Malaysia's development in 2020,” the report stated.
More companies are also expected to leverage government grants and tax rebates to build a culture that encourages and drives innovation.
“Many business leaders look to technologists to guide them in driving digital transformation projects to achieve efficiency and stay competitive. As a result, many have entrusted chief innovation officers and chief technology officers with bigger budgets to both optimise efficiency and generate revenue.”
Randstad also said despite an increase in hiring appetite, there remains a shortage of skilled talent in the labour market for the industry.
It said to leverage the cost savings from currency exchange, multinational companies prefer to hire their regional headcount from Malaysia. However, the local talent pool struggles to keep up with the high demand and expectations for skilled talent.
“As a result, companies eventually hire talent from overseas to meet their labour needs due to the local skills mismatch, from blue-collar workers through to specialists with niche expertise,” the firm said in the report, adding that the issue of brain drain will persist this year as high in-demand talent tends to pursue opportunities abroad.
The manufacturing and services sectors will remain resilient with a slight growth projected for this year.
“The year will also see further transformation in these industries, with the government investing US$131 million (RM533.17 million) to encourage companies to explore and integrate automation into their processes,” it said.
“However, the agricultural sector, once the backbone of Malaysia's economy, is expected to slow down. This comes as revenue from the palm oil industry stagnates in addition to the contraction in the fishing industry.
“Pressures stemming from factors such as climate change and resource scarcity are also expected to take a toll on Malaysia's agricultural sector,” the report stated.