PETALING JAYA: The New Industrial Master Plan 2030 (NIMP 2030) sets out Malaysia’s ambition to become an advanced, high-value industrial economy.
The 2026 budget supports this vision with a shift toward investment-led growth, prioritising sectors such as electrical and electronics (E&E), electric vehicles (EVs), renewable energy, aerospace, chemicals, pharmaceutical, and medical devices.
But for this strategy to succeed, Malaysia must address a core challenge: building a skilled, future-proof workforce that can meet the demands of these industries.
Technical and vocational education and training (TVET) — alongside science, technology, engineering and mathematics (STEM) — is now being held up as a critical enabler of that transformation.
However, Malaysia’s ambition to become an advanced industrial economy faces one central obstacle: a shortage of skilled labour. According to Unesco, only 6.1% of Malaysian youth are enrolled in vocational education — far below Singapore (23.8%) and Germany (20.4%).
A 2021 report by the Khazanah Research Institute also highlighted a critical mismatch between education output and market demand.
While enrolment in fields such as business and social sciences remain high, ensuring that supply of skilled labour to these sectors remain adequate, others such as engineering, ICT and environmental technology do not attract too much interest from undergraduates. As a result, these sectors continue to face labour shortages.
Shifting perceptions
A 2022 policy brief by the Institute of Strategic and International Studies (Isis) flagged longstanding social stigma against TVET, noting that technical pathways continue to be seen as inferior, leading to parental discouragement and underinvestment.
But, according to The Edge, deputy prime minister Ahmad Zahid Hamidi had highlighted that 54.3% of secondary school leavers are now opting for TVET, describing it as a “positive trend” for the nation’s technical workforce.
He added that graduate employability stands at 95.1%, and that TVET graduates in sectors like automation and advanced manufacturing can earn between RM2,500 to RM3,500 per month — compared with RM1,700 to RM2,000 for many general degree holders.
This salary gap in favour of TVET talent challenges outdated assumptions and reinforces the idea that skills-centric training yields “higher wages as well as employment rates”, an Isis analysis says.
To meet industrial labour needs, the government has allocated RM7.9 billion under Budget 2026 to strengthen the TVET ecosystem. This includes facility upgrades, industry-linked curricula, and expanded apprenticeship opportunities.
These upgrades are aligned with high-growth sectors such as EVs, semiconductors, aerospace and renewable energy, all singled out under NIMP 2030 as strategic priorities.
High-tech jobs and industrial demand
Data from the Malaysian Investment Development Authority (Mida) projects that the number of jobs in manufacturing will grow from 2.9 million in 2021 to 3.3 million by 2030.
Most of these positions are expected to be high-skill, high-income roles spanning robotics, chip packaging, and cleanroom-based automation.
These industries are considered “sticky” — sectors that are resilient to global shocks and less likely to relocate abroad or be fully replaced by automation, given the depth of their value chains.
Malaysia’s ability to attract and retain high-value investment will depend on its talent readiness. Recent multibillion-ringgit commitments by Infineon Technologies (RM5 billion expansion in Kulim) and Intel (over RM30 billion for facilities in Penang) are viewed as early wins for the NIMP 2030 roadmap.
But future inflows may not be guaranteed. Talent shortages could stall flagship projects or divert investor interest to neighbouring economies.
Budget 2026 also earmarks RM180 million for the NIMP Industrial Fund and RM5.9 billion for regional development corridors to attract further industrial growth.
Looking ahead
As Malaysia pivots to an investment-led growth model, technical education is gaining prominence in national policy.
The Khazanah Research Institute has urged deeper collaboration between industry and academia — from expanded apprenticeships to labour market matching — to ensure graduates are work-ready.
While challenges remain — from shifting societal mindsets to adapting training frameworks — the goal is clear: developing a local workforce that can keep pace with evolving industrial needs.
Whether through polytechnic programmes, STEM coursework or industry apprenticeships, Malaysia’s next generation of skilled workers will play a decisive role in shaping its economic future.
