Businesses advised to invest in human capital
KUALA LUMPUR: Businesses in Malaysia should give more emphasis to human capital and productivity in order to sustain the country's economic growth as it begins to enter maturity stage.
United States economist Bart Van Ark said the effective way to ensure a sustainable economic growth in the long term is to have highly skilled workers in the labour market, especially in the services sector and, hence, the need to invest in human capital.
"Most growing economies are driven by employment growth, which is bringing in more people to the labour market in formal jobs. Malaysia and all Asean economies have been successful in doing that.
"However, in the longer term, as the economy begins to mature, it is harder to bring in more people to the labour market due to higher requirements. Hence, businesses should start investing in training and skills now," Van Ark said at a briefing here yesterday.
Van Ark, who is executive vice-president and chief economist of the US-based The Conference Board, said companies will also need to invest in innovation so as to step up the development of new and more creative products to cater to the ever-changing market trends.
"For an economy that is entering its maturity stage, an important aspect that should be emphasised is the investment in innovation and workers' skills to enable it to be at par with that of developed countries," he said.
On Malaysia's economic growth prospects, he said the Conference Board expects the economy to grow by between four and 4.5 per cent.
He said the modest growth is mainly due to the slow recovery in advanced economies like the US and Europe, which are the country's major export markets.
Source : New Straits Times
Date : 22 May 2013
Afternoon Highlight (22/05/13/87/785)
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