Malaysia Transitions Toward a Knowledge-Based Economy

Abstract

The article discusses Malaysia's transition toward a knowledge-based economy (k-economy). The k-economy is based on a paradigm that focuses on intellectual capital as a prime mover. Investment in human capital is critical in a k-economy. Human capital theory views education and training as an investment that can yield social and private returns through increased knowledge and skills for economic development and social progress. The shift to the k-economy is part of a wider plan to achieve the objective of the nation's Vision 2020. Vision 2020 is a 30-year plan to push Malaysia to achieve a level at par with industrial nations in terms of economic performance and technological capability. However, Malaysia currently lacks some of the critical elements to support the k-economy. Among them are the lack of adequate knowledge and skilled human resources, inadequacy of a k-economy supportive education and training infrastructure, a lack of research and development capability, a relatively weak science and technology base, a slowly evolving financing system and a lack of technopreneurs.