DRIVING PRODUCTIVITY OF THE NATION Malaysia Productivity Blueprint (MPB)

Sarimah Misman (Director, MPC)

2

Projek usahasama di antara PBB dan Kerajaan

Persekutuan bersama Pertubuhan Buruh

Antarabangsa

( ILO) sebagai agensi pelaksana

Majlis Produktiviti Negara ( Incorporation ) Akta No. 19

ditukar menjadi Perbadanan Produktiviti

Negara

Perbadanan Produktiviti Malaysia telah ditawarkan

pada 21 Februari 2008

1962 2008 1991

Pusat Daya Pengeluaran

Negara

Perbadanan Produktiviti Negara

Perbadanan Produktiviti Malaysia

2 2

Transformasi . Inovasi . Perkongsian

3 3

MISI To deliver high impact services towards achieving performance excellence through innovation for the betterment of life.

VISION

MISSION

The leading organisation in productivity enhancement for global competitiveness and innovation.

4 4

Providing value-added information on productivity, quality, competitiveness and best practices through research activities and databases;

Developing human capital and organisational excellence for building a knowledge-based society through training, systems development and best practices;

Conducting review on regulation and promoting Good Regulatory Practice to create a more competitive business environment; and

Nurturing innovative and creative culture for productivity and competitiveness through partnership programmes

01

02

03

04

5

Kepala Batas, Penang

Kuala Terengganu,Terengganu

Kota Bharu,Kelantan

Kuantan,Pahang

Kuching, Sarawak

Kota Kinabalu, Sabah

Johor Bahru, Johor

MPC HQ, Petaling Jaya, Selangor

MPC PJ8 Petaling Jaya, Selangor

MPC has consistently aligned its strategies with the nation's five-year economic plans

1. MPC data. Productivity levels based on constant 1987 prices between 1960 – 2000, and on constant 2000 prices in later periods. 2. Data and achievements for first column based on 1980-1990 information. 3. Productivity growth and level data from 2005 onwards are MPC estimates 4. National Chambers of Commerce and Industry of Malaysia 5. Over previous period average Source: MPC

Management

Training &

Advisory

Services

Research &

System

Development

Productivity &

Efficiency

Enhancement

Benchmarking

&

Best Practices

Competitiveness

&

Innovation

Industrialization

5.2%

RM13,768

Productivity

improvement

3.9%

RM17,233

Knowledge-driven

economy

2.4%

RM42,048

Balanced growth

3.8%3

RM48,552

Malaysia 5-yr Plan

Focus

Driving Productivity of the

Nation

3.7%4

RM92,300

1960 1990 1995 2000 2005 2010 2015

• Established as mgmt

training organisation

• 1st Nat'l Productivity

Campaign

• Consultative panels

for research focus

• 1st Annual

Productivity Report

• TFP measures for

national & sector

output

• Service Efficiency

Award by NCCI4

• Became partner

institute with IMD

and WEF

• Won UN Public

Service Award

• 2.5X increase in

programs and

participants5

• Secretariat to Doing

Business focus

groups

Smart

Regulation

Delivery

Management

Office

Beyond 2020

• 9 Nexus lead by Indusry champion

formed

• Institutionalise DMO in MPC to

coordinate , monitor , & evaluate

implementation of initiatives

2.3%2

RM13,029

Productivity Growth

& Level1

MPC Achievements

Improvement in

infrastructure

MPC's priorities have expanded since its inception

DRIVING PRODUCTIVITY OF THE NATION

GDP growth

Labour productivity growth

CAGR

Employment growth

4.80% 4.48% 5.29%

3.13% 1.00% 1.82%

RMK8 RMK9 RMK10

1.62% 3.45% 3.40%

RMK-11 target

3.7%

5.6%

Source: EPU, DOS, RMK11, RMK10, RMK9, RMK8 Note: CAGR starts a year before the RMK period to take into account the growth in the first year of the RMK.1995-2015 data from DOS in chart at current prices. GDP values are based on 2010 prices, EPU. Employment growth RMK-11 target based on estimation from RMK-11 Appendix, A5-2, RMK11 targets are obtained from RMK11 document

2.1%

If productivity remains at status quo, Malaysia is at risk of losing value-add of ~RM120Bn

Malaysia’s Productivity sti l l lacks behind

Productivity level lacks behind developed countries and

80 70 60 50 40 30 20 10

0

4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 -0.5

3.6%

1.3%

2.0%

0.8%

-0.1%

1.1%

69

55 60

36

46

29

Malaysia Japan Korea

Singapore

Australia United States

Output per Hour Worked

Growth

grows slower compared to emerging Asia

Level of Productivity and Growth (Malaysia & selected Asian Countries) 2017

35 30 25 20 15 10

5 0

4.0 3.9 3.8 3.7 3.6 3.5 3.4 3.3

3.6%

3.4% 3.5%

3.9%

5

13 14

29

Malaysia Thailand Indonesia Vietnam

Output per Hour Worked

Growth

developed countries… Rank 2010 2016 2017

1 Luxembourg Luxembourg Luxembourg

2 Norway Norway Norway

3 Belgium Ireland Ireland

… … … …

10 Switzerland Sweden Sweden

11 Sweden Switzerland Switzerland

12 Austria Singapore Austria

13 Singapore Austria Singapore

14 Finland Australia Australia

… … … …

17 United Kingdom United Kingdom United Kingdom

18 Canada Spain Spain

… … … …

45 Chile Malaysia Malaysia*

46 Malaysia Chile Chile

… … … …

55 Sri Lanka Ecuador Thailand

56 Thailand Thailand Ecuador

57 Indonesia Indonesia Indonesia

Ranking of International Productivity for Malaysia is stagnant

Ranking by labor productivity per hour worked USD (2017)

*Malaysia ranked 45th out of 63 countries

• The Malaysia Productivity Blueprint (MPB) was launched by YAB Dato’ Sri Mohd Najib Tun Haji Abdul Razak on 8 May 2017 at the Prime Minister’s Office

• As per the targets set in the Eleventh Malaysia Plan (2016-2020), the MPB aims to achieve 3.7% labour productivity growth per annum.

• The private sector, in partnership with the Government will be the key driver for this productivity agenda.

Malaysia Productivity Blueprint

1.1%

9.6%

Mining and Quarrying

Construction

6.3%

2.2%

Malaysia Productivity Blueprint

11MP has set the target to achieve national labour productivity growth of …

Driving Productivity of the Nation

To achieve this national target, each sector must raise labour productivity growth to target levels

3.7% ; RM92,399

2017 2020

2.6%

4.1%

3.6%

Manufacturing

Services

Agriculture

4.2%

4.7%

1.5%

Year

2020

2017 3.6% ; RM81,039

annually

Main Economic Sectors Labour Productivity, 2015 and 2016

12

10

8

6

4

2

0

120,000

100,000

80,000

60,000

40,000

20,000

0

3.4 55,485

Services Construction Manufacturing Agriculture

1.4

106,647

12.4

40,018 2.8

68,166

RM Growth (%)

2015 Growth

2016

Pri

ori

ty S

ecto

rs

M&E 4.7% 5.7%

Chemicals 2.5% 4.7%

E&E 5.9% 3.8%

NATIONAL-LEVEL INITIATIVES

SECTOR-LEVEL INITIATIVES

ENTERPRISE-LEVEL INITIATIVES

Outline policy priorities to uplift national productivity • To be led by core government ministries and agencies • Targets governance of productivity policies impacting all economic sectors

Outline explicit sector strategies to address sector-level productivity barriers • To be led by key industry associations and anchor enterprises for each sector • Targets acceleration of productivity uplift, impacting large enterprises and SMEs at sector level

Outline specific enterprise strategies to enhance operations related to productivity improvement • To be led by management at enterprises (including SMEs) with guidance from sector Productivity Nexus • Targets productivity improvement at enterprise level

The Blueprint Outlines • Productivity must be addressed holistically and in tandem – at the national, sector and enterprise levels

• Strong coordination and governance are key to securing implementation certainty • Productivity needs to be top of mind movement and embedded into day-to-day work culture

Driving Productivity of the Nation

Talent Technology Structure Incentive

Environment Business

Mindset Productivity

Challenges

Thrusts

5 Strategic Thrusts aimed at addressing challenges impeding Productivity Growth across sectors

Restructuring workforce by raising the number of high-

skilled workers, tightening entry of lowskilled workers,

and meeting demands of the future economy

Strengthening the readiness of

enterprises to effectively adopt

and exploit technology and

digital advantage (such as 4th Industry

Revolution)

Reducing reliance on non-critical

subsidies, linking financial assistance and liberalisation efforts to productivity outcomes,

and strengthening industry positioning in higher value add

segments of the value chain

Addressing regulatory

constraints and developing a robust

accountability system to ensure

effective implementation of regulatory reviews

Embedding culture of productivity

through nationwide movement, and

driving accountability in productivity

performance through effective governance

mechanism

National level: 5 thrusts and 10 initiatives with 16 activities

Driving

Digitalisation &

Innovation

Securing a strong

implementation

mechanism

Forging a Robust

Eco-system

Making Industry

Accountable for

productivity

Building

Workforce

of the Future

Enforce structural changes to the workforce by formulating a comprehensive labour market policy including reducing

reliance on low wage and low skilled workers N1

Conduct national strategic workforce planning in anticipation of changing needs across the sectors N2

Strengthen readiness, knowledge and adoption of technology across sectors N3

Realign key grants, incentives, soft loans and other funding mechanisms to link productivity metrics

and outcomes to incentivise productivity improvement

N6

Accelerate efforts to enhance whole-of-government approach towards addressing regulatory constraints N7

Institutionalise a strong coordination and governance model to secure implementation certainty across government,

industries, and enterprise levels

N9

Strengthen digitalisation among SMEs through e-commerce and adoption of innovative technology N4

Gradually reduce reliance on non-critical subsidies, and ensure liberalisation efforts are linked to productivity outcomes N5

Establish an accountability mechanism for the implementation of regulatory reviews by the government N8

2

3

4

5

Launch nationwide productivity movement to inculcate stronger culture of productivity across all segments of society N10

1

Initiatives Thrusts

These initiatives complement other medium- and long-term incentives which are on-stream, such as implementation of the

National Education Blueprint. These initiatives must be implemented urgently over 18-24 months to accelerate productivity in the

ecosystem

9 Priority Subsectors

Retail and F&B Chemicals & Chemical Products

Electrical and Electronics

Machinery and

Equipment

Tourism Agro-food

ICT Professional Services

Private Healthcare

Contribute to 30% of Malaysia’s GDP, and 40% of total employment

Workforce Technology Industry Eco-system Structure

Driving Productivity of the Nation

Thrusts

Mind set

Led by 9 PRODUCTIVITY

NEXUS CHAMPIONS

YBrs. Dr. Nungsari Ahmad Radhi Agro-Food

YBhg. Dato’ Wong Siew Hai Electrical and Electronics

YBhg. Datuk Dr. Hapiz Abdullah Chemicals and

Chemical Products

Mr. Mac Ngan Boon Machinery and Equipment

YBhg. Dato’ Bruce Lim Aun Choon Retail and Food & Beverages

Mr. Ganesh Kumar Bangah ICT

YBhg. Dato’ Dr. Jacob Thomas Private Healthcare

Mr. Uzaidi Udanis Tourism

YBrs. Ts. Choo Kok Beng Professional Services

16

1 2 3 4

5 7

8

9

6

SECTOR-LEVEL INITIATIVES

PRODUCTIVITY NEXUS

Business Opportunity

Government Who oversees the Productivity Nexus The Delivery Management Office (DMO) under the Malaysia Productivity Corporation is responsible to monitor the successful transformation of sectors under the Nexus.

Productivity Nexus is a key agent empowered by industry associations which support enterprises to improve visibility of the implementation progress. The roles of Productivity Nexus are:

a. SUPPORT SECTOR-LEVEL INITIATIVE Improve awareness, understanding and adoption of sector level initiatives

c. ENABLE ENTERPRISES THROUGH KNOWLEDGE SHARING

Develop and disseminate tools for enterprises to implement productivity enhancement programmes

b. EMPOWER ENTERPRISES TO HELP THEMSELVES Productivity consultants and masterclasses to baseline challenges and share best practices

Industry Association

Productivity Nexus Champion

Industry Productivity

Specialist Productivity Tools

Business Community

9 Productivity Nexus 1.Retail and F&B 2.Electrical and Electronics 3.Chemicals and Chemical

Products 4.Machinery & Equipment 5.Tourism 6.Agro-food 7.ICT 8.Professional Services 9.Private Healthcare

Enterprise-Level Initiatives

Driving Productivity of the Nation

Strategy and Leadership

Source: MPB

• Enterprise Productivity Programme.

• provides a customised and hands-on approach to increase the productivity

• The firm-level intervention:

• diagnostic toolkits • using existing R&D intermediaries

(Public-Private Research Network (PPRN), PlaTCOM, Steinbeis and SIRIMFraunhofer)

Integrated diagnostic tools

Governing Structure

Driving Productivity of the Nation

Thank You by Delivery Management Office (DMO)

Malaysia Productivity Corporation (MPC)