This article first appeared in Digital Edge, The Edge Malaysia Weekly on February 13, 2023 - February 19, 2023
In the many conversations I have these days, the hot topic is always talent — or the lack thereof. From start-ups and small and medium enterprises (SMEs) to multinational corporations (MNCs), we have a major talent shortage and everyone has a gripe with the government on why it is not doing more to solve this major issue.
We also have TalentCorp, a government agency tasked with bringing back Malaysians living and working abroad. Most people will agree that it has failed in its mission and some have called for its closure. I feel sympathy for TalentCorp — it never stood a chance in the first place and its mission was misplaced due to several reasons.
What are these reasons? First, many Malaysians prefer to work abroad because they feel there is more meritocracy there. In Malaysia, within the government and its various agencies as well as the government-linked corporations (GLCs), it is not necessarily the best talents that get to the top because of two reasons. First, there is a preference for bumiputeras to lead these agencies and GLCs. It is an unwritten policy but, by convention, it is an ingrained practice. Second, there’s a perception, rightly or wrongly, that only the connected can progress to the top. It’s a case of “who you know” and not “what you know”.
Hence, some of the top talents who are not bumiputera, or even bumiputeras who are not well connected, can never get to the top, of both management as well as the board. I am not criticising the policy, but if we need to address this elephant, then we need to be honest as this is how Malaysians abroad see the issue. Even many talented bumiputeras working abroad have the same thinking, so it’s really not a race-based issue. That’s why we see many talented Malaysians working in Singapore, Hong Kong, Taiwan and the UK because they feel they have a better chance of progressing in their career.
Second, and perhaps more importantly, many of these talents earn much-higher incomes abroad. And in Singapore and Hong Kong, the tax rate is very much lower compared with Malaysia, hence workers also save more. Other than for the top positions in GLCs or MNCs, none of the other organisations, including government agencies, can pay as well.
Third, there is a fear that religious conservatism will sweep the nation and rule using hardline policies. This is already evident in the east coast and northern states, where gambling and alcohol consumption are prohibited; dressing in bikinis — and even swimming trunks for men — is frowned upon, or prohibited in some states; cinemas and entertainment centres have been closed; and men and women cannot sit together if they are not married or direct family members.
These are real concerns. It certainly is not due to the current government, which is trying to address some of the inequalities present in the country. I hope it succeeds.
I actually think it was a brilliant idea to set up TalentCorp but the mission was flawed. There was too much of a focus on bringing back Malaysian talents, which was a doomed mission because it simply could not address the elephant in the room.
Setting up a dedicated organisation to tackle the talent issue is the right thing to do. A dedicated organisation can stay highly focused on the biggest issue facing our economy, which, if addressed correctly, can take us to the next level in economic growth.
TalentCorp should focus on not just bringing back Malaysian talents but also on addressing the needs of the different sectors related to white collar talent requirements. It includes addressing the needs of the tech MNCs that have set up factories and offices in Penang’s Batu Kawan Industrial Park, which include Broadcom Inc, Boston Scientific, HP and Smith+Nephew. It also includes the needs of start-ups and information technology firms, financial technology (fintech) and even medical technology (medtech) firms. The newly licensed digital banks will also need both tech and banking talents.
TalentCorp needs to assess the requirements of all of these sectors and identify what the country needs to make Malaysia a real hub for the high tech and financial sectors, including Islamic fintech. Once it understands these needs, the next step is to acquire the talents.
There are many programmes within TalentCorp but it is not addressing the real problem or being aggressive enough to solve the problems that have beset the private sector. All the MNCs in Penang are crying out for engineering and tech talents every day.
Just the fact that TalentCorp has a narrow focus — of bringing back Malaysian talents — is already flawed. Talent today is global, not local. Just like how Singapore has been pinching Malaysian talents for decades, Malaysia does not need to only look to Malaysians for talents. In fact, talents in many countries — in South Asia, like Sri Lanka, Pakistan and Bangladesh; Central Asia such as Kazakhstan and Kyrgyzstan; Middle East and North and East Africa; and other Southeast Asian nations such as the Philippines and Cambodia — would love to work in Malaysia, especially in the tech and finance spheres.
We can source engineers, computer scientists and even financial personnel from these nations. Our country is actually a highly desirable place to live and work in; we have everything a foreigner needs, from safe and secure cities to great food and amazing places to visit for holidays.
Today, many nations have become xenophobic, especially the US and Western European ones. People don’t mind coming to Asia to work.
TalentCorp can be the catalyst that promotes Malaysia and attracts the best talents from these nations.
We have another talent pool in Malaysia — foreign students studying in local universities. We have some fantastic private universities and even public universities that have postgraduate programmes that attract foreign students. We provide them with a sound education, then we let them return to their home countries, or they apply to other foreign countries. We educate them, but someone else benefits.
Isn’t this a tremendous waste of resources? When I completed my PhD at the University of Edinburgh, without my asking, I was offered a two-year visa to stay in the UK. I didn’t even need a job to get the visa because they assumed that someone with a PhD would find something useful to do and contribute to the country. Ultimately, I had to return to Malaysia for family reasons but it was a great opportunity to stay and work in the UK. Similarly, we should offer foreign students a visa of at least three years to stay and work here. And if they get a permanent job, they should be given five or 10-year visas. In Singapore, top talents are even offered permanent residency without being required to stay in the country for several years.
Some of the students that come to Malaysia are among the best in their countries. Many cannot afford the high fees and cost of living in the US or the UK, so they come to Malaysia. If we have a visa programme for students in science, technology, mathematics and even finance, it will attract them to stay and this will solve our talent issues.
The biggest stumbling block is our archaic immigration rules. Getting a permit to work in Malaysia is almost like winning an Olympic gold medal. I have a friend, a venture capitalist from the US, who wanted to set up a VC fund in the country with money from US funders to invest in Malaysian companies. It took him almost a year and many, many difficult applications and conversations to get a visa to stay here. Imagine that. He’s bringing US dollars into Malaysia to invest in Malaysian start-ups and he couldn’t get a visa. What’s wrong with our system? It’s gone bonkers. This is no way to build a nation, when even talents with money cannot stay in Malaysia.
Someone needs to relook at our immigration laws and adapt them to our needs, otherwise all the hard work to bring talents to Malaysia or keep talented students will fail. Our immigration administrators fail to understand that visas for workers are not a gift but a need to keep our economy from stagnating and losing out to our neighbours.
We now have a new government and new ideas. It’s time we reviewed talent from the wider perspective of national and economic needs and not from the angle of stopping foreigners from coming to Malaysia. The biggest joke, of course, is that it’s much easier to bring in a blue collar worker to Malaysia than a highly talented and skilled worker. We have got all our priorities wrong.
I hope the new government will set this right so that we can jumpstart the high-tech, high-value ecosystem and move Malaysia out of the middle-income trap into a higher-income nation. We are at a critical stage. The new government needs to do something urgently and TalentCorp can play a big role.
Dr Sivapalan Vivekarajah, who has a PhD in venture capital from University of Edinburgh, Scotland, is co-founder and senior partner of Scaleup Malaysia Accelerator (www.scaleup.my) and adjunct professor at the School of Science and Technology, Sunway University. He is the author of the book Supercharge Your Startup Valuation.
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