SIMPOSIUM MTU TVET 2016 Presented by AMIR BIN OMAR DIRECTOR Human Capital Development Section Economic Planning Unit, Prime Minister s Department

Transcription

1 SIMPOSIUM MTU TVET 2016 Presented by AMIR BIN OMAR DIRECTOR Human Capital Development Section Economic Planning Unit, Prime Minister s Department 1 Jun 2016

2 Experience and Specialisation Amir Bin Omar Director Human Capital Development Section Economic Planning Unit Prime Minister's Department 27 years of experience in the public sector focusing on human capital issues include: Economic modelling - Economic-wide model on HRD and labour market Forecasting demography; labour market; and agriculture sector projection Demand side HCD planning labour market analysis Technical assistance on HCD planning : Sudan - The Long-Term Perspective Plan ; Saudi Arabia - The Long-Term Strategy ; Philippines - Region of Mindanao Institution Involvement in formulation of economic plan documents Economic Planning Unit: - Human Capital Development - Agriculture Section Ministry of Human Resources: - Director of Institute of Labour Market Analysis and Information (ILMIA) Education Tel: amir.omar@epu.gov.my Bachelor in Economics & Administration (Rural Economics) University of Malaya, 1986 Post Graduate Diploma in Economics, University of Manchester, United Kingdom,1995 Master of Arts in Economics, University of Manchester, United Kingdom, 1996

3 CONTENT: 1. Overview of Malaysia Economy 2. Eleventh Malaysia Plan Human capital development for an advanced nation 3

4 Changing Structure of the Economy 1 Transformed from an agro-based to manufacturing and services-based economy 2 Diversification of export products from agricultural to manufactured goods 4

5 Significant reduction in poverty Tremendous achievement in poverty eradication Wealth inequalities has declined % of Households Gini Coefficient 5

6 Challenges to be Addressed Prospects, Productivity Lagging productivity level Structural Transformation Human Capital Product Competitiveness Slow structural transformation Insufficient high-income jobs and skilled labour Declining comparative advantage Fiscal Sustainability Limited fiscal space Income Distribution Half of households remain in low middleincome group 7

7 CONTENT: 1. Overview of Malaysia Economy 2. Eleventh Malaysia Plan Human capital development for an advanced nation 8

8 ELEVENTH MALAYSIA PLAN : ANCHORING GROWTH ON PEOPLE Strengthening macro-economic resilience for growth Unlocking productivity potential to ensure sustainable and inclusive growth Promoting investment to spearhead economic growth Increasing exports to improve trade balance Nation-wide productivity agenda and implementation plan Enhancing public sector productivity and accelerating regulatory reforms Greater collaboration in re-skilling and research Ensuring productivity is championed across industries Enterprise-level productivity assessments and targets Reducing the cost of doing business Providing performance-based incentives for high-income and knowledge-intensive economic activities Addressing the talent gap and mismatch Improving access to financing for knowledge-intensive industries Providing tipping point financing through the Facilitation Fund Improving the export ecosystem Moving up the value chain Maximising opportunities with strategic partners Increasing external industry expert support Multidimensional goals, GDP growth at 5-6% per annum Labour productivity at RM92,300 by 2020 from RM77,100 in 2015 GNI per capita at RM54,100 by 2020 Average monthly household income at RM10,540 by 2020 from RM6,141 in 2014 Enhancing fiscal flexibility to ensure sustainable fiscal position Enhancing revenue and implementing more prudent spending measures Compensation of employees to 40% GDP by 2020 from 34.9% in 2015 Malaysian Wellbeing Index (MWI) to increase 1.7% per annum 9 9

9 Potential Output 11MP : GDP is projected to grow 5-6% and is expected to be driven by productivity GDP growth (% p.a.) / % to GDP* '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 Output Gap (% to GDP*) GDP (% p.a.) GDP* (Potential Output, % p.a.) Note: Based on GDP (2010 = 100) 11MP GDP* : 5.9% GDP: 5-6% GDP growth (% p.a.) (48.8%) 1.1 (21.4%) 1.6 (29.8%) RMKe-10, (44.0% ) 0.9 (16.0%) 2.3 (40.0% kpd KDNK) RMKe-11, Capital Labour Multifactor Productivity 10

10 Per Capita Income 11MP : Malaysia to reach high-income status in 2020 RM36,937 (US$10,196) RM27,819 RM25,678 (US$8,636) (US$7,285) RM7,101 (US$2,626) RM54,100 (US$15,690) } 7.6x compared to the level of 1990 US$18,733 US$7,143 US$19,728 US$25,780 US$36, GNI per capita (current price) Note: World Bank: High Income Country = AS$12,746 (2013) Based on GDP (2010 = 100) GNI per capita (PPP) Note: Estimated target of high income country = PPP AS$26,600 (2013) Based on GDP (2010 = 100) 11

11 11MP : Growth will be driven by domestic demand with increased contribution from the external sector Original Target % p.a. 10MP, Achievement % p.a. % to 2015 GDP 11MP, % p.a. Target % to 2020 GDP Real GDP Consumption Private Public Investment Private Public Net External Sector Export MP Focus on high quality private investment in manufacturing and services sector to create high income job Public and private investment will be driven by infrastructure projects such as high-speed railway, LRT3 and Pan Borneo Highway Private consumption will increase in line with the country's prosperity Public consumption is expected to moderate due to prudent spending Demand Side Import Notes: Based on GDP (2010 = 100) 12

12 Supply Side 11MP : GDP by Economic Activity Manufacturing and services sectors will spearhead the growth... Sector/ % p.a. 10MP, Original Achievement Target 11MP, Target Agriculture Mining Construction Manufacturing Services MP All economic sectors are targetted to grow stronger supported by: Productivity increase Knowledge-based with high value-added activities Strong demand from domestic and external sector GDP Notes: Based on GDP (2010 = 100) 13

13 Supply Side 11MP : Economic structure remains broad based (% to GDP) Services 51.2 Finance & Business Transportation & Communications Supply Side ACTIVITY % Services 53.4 Manufacturing 23.0 Mining & Quarrying 9.0 Agriculture 9.2 Construction RM0.8 tn Trade, Accommod ations & Restaurants Services 53.8 Finance & Business Note: Based on GDP (2010 = base year) Import duties are not shown Others Transportation & Communications % p.a Finance, Busin ess Transportation, Communication s RM1.1 tn 5-6% 15.8 p.a. Trade, Accommod ations & Restaurants Services 56.5 Others Agriculture Construction Services RM1.4 tn 17.4 Trade, Accommod ations & Restaurants Mining 16.6 Manufacturing 14 Others

14 .. needs to close the gap to achieve the characteristic of a first-world talent base Country Labour productivity US$ PPP per employee, 2009 Skilled 2 labour force Percentage, 2008 Labour force with tertiary education 3 Percentage, 2007 Malaysia (2010) Singapore Republic of Korea Finland United States Australia United Kingdom Hong Kong OECD average = 64.8 OECD average = 37.6 OECD average = Adjusted to Purchasing Power Parity 2 Management, professional and other skilled occupations 3 Tertiary education is the educational level following the completion of secondary education, i.e. after years of basic schooling. Colleges, universities, institutes of technology and polytechnics are the main institutions that provide tertiary education Source: World Bank Education Statistics, Economic Intelligence Agency, International Labour Organisation, Korea Ministry of Labour, Singapore Ministry of Manpower, US Bureau of Labour Statistics 15 15

15 Quantity gaps in TVET workforce continue to persist If no changes made, 0.3Mn undersupply of TVET workers by 2020 Gaps vary by sector & region, and could be addressed by current excess capacity Net undersupply 0.3Mn 0.7Mn TVET workforce supplied (2014 to 2020) 1.0Mn TVET workforce demanded (2014 to 2020) 1 Sector 2 Geography Magnitude of quantity gap concentrated in select sectors Top 5 sectors make up 66% of gap Undersupply: Wholesale & retail/motor vehicle repair; Transportation & Storage; Accommodation and F&B Oversupply: Electricity, gas, steam & aircon; Prof, scientific & tech. Quantity gap varies significantly across geographical regions E.g. 171K undersupply for Central but only 5K undersupply in Eastern Peninsular Recommendations to refine quantity analysis moving forward: Take into consideration in-house training provided by employers to produce / upskill TEVT workforce Fully recognise role of private institutes in supplying TEVT workforce Currently, supply (output) from private institutes as provided by JPK are included in analysis 3 Capacity utilisation Estimated 200K additional capacity across all TEVT institutes by 2020, which can address ~60% of 0.3Mn undersupply ~18% of net undersupply can be addressed by excess capacity in currently high-performing progs.

16 Regionally, quantity gap varies substantially Wholesale and retail trade; repair of motor vehicles and motorcycles, Accommodation and food and beverage services activities and transportation and storage are MSIC sub-sectors with consistently most gaps for all regions Northern (32,000 gap) Sabah (75,000 gap) MSIC sub-sectors with largest gap Eastern (5,000 gap) MSIC sub-sectors with largest gap MSIC sub-sectors with largest gap Legend: Wholesale and retail trade; Repair of motor vehicles and motorcycles Transportation and storage Central (171,000 gap) Johor (62,000 gap) Sarawak (21,000 gap) Accommodation and food and beverage services EPU TVET Study PWCAS MSIC sub-sectors with largest gap MSIC sub-sectors with largest gap MSIC sub-sectors with largest gap April

17 Thousands Nationally, quantity gap concentrated in a few MSIC sub-sectors An estimated net undersupply of 300,000 by 2020 if no changes made Undersupply of 600, 000 across 8 MSIC sub-sectors Oversupply of 300,000 across 9 MSIC sub-sectors Gap in demand and supply of additional TVET workforce from 2014 to EPU TVET Study PWCAS April

18 CONTENT: 1. Overview of Malaysia Economy 2. Eleventh Malaysia Plan Human capital development for an advanced nation 19

19 Improving labour market efficiency to accelerate economic growth 3.7 % Strategic Thrust 3 Accelerating human capital development for an advanced nation Main strategies and selected outcomes Labour productivity growth rate per annum Game Changer Enabling industry-led Technical and Vocational Education and Training (TVET) 60% of the 1.5 million jobs that will be created during the Eleventh Plan will require TVET-related skills 40 % RM 2,500 Compensation of employees to GDP in ,000 0 Transforming TVET to meet industry demand 225,000 Intake of SPM leavers to TVET programmes Monthly median wage in 2020 Improving the quality of education for better student outcomes and institutional excellence TOP universities in Top 100 of the QS World University Rankings 100 % Student enrolment from preschool to upper secondary Strengthening lifelong learning for skills enhancement 58 % Increase in number of employees that will benefit from expansion of the HRDF act 20

20 STRATEGIC THRUST 3 Main strategies and selected outcomes Accelerating human capital development for an advanced nation. 1 2 Game Changer 3 4 Improving labour market efficiency to accelerate economic growth Transforming TVET to meet industry demand Strengthening lifelong learning for skills enhancement Improving the quality of education for better student outcomes and institutional excellence 3.7 % Labour productivity growth rate per annum 40 % Compensation of employees to GDP in 2020 RM2,500 Monthly median wage in % of the 1.5 million jobs that will be created during the Eleventh Plan will require TVET-related skills 225,000 Intake of SPM leavers to TVET programmes *TVET as catalyst in producing high skilled workers 58 % Increase in number of employees that will benefit from expansion of the HRDF act To be at least at par with the international average in PISA and TIMSS assessments 100% Student enrolment from preschool to upper secondary Top universities in Top 100 of the QS World University Rankings 21 21

21 Employment by major occupational groups, Skilled 2 Jobs created ('000) 16,000 13,781 1, ,292 Semi-skilled 2 Low-skilled 2 +1,511 net jobs created 12,000 3,859 (28%) 5,352 (35%) 8,000 8,531 (62%) 8,927 (58%) 4, ,392 (10%) 1,013 (7%) Skilled 2 Semi-skilled 2 Low-skilled Skilled workers comprise managers, professionals and technicians and associate professionals. Semi-skilled workers comprise clerical support workers, service and sales workers, skilled agricultural, forestry and fishery workers, craft and related trade workers, and plant and machine operators and assemblers. Low skilled workers comprise elementary occupations figures are an estimation while 2020 are forecasted 22

22 Employment by Major Sectors, Annual Growth Job Created INDUSTRY % % Agriculture, Forestry, Livestock & Fishing 1, , , , Mining & Quarrying Manufacturing 2, , , , Construction 1, , , , Services Sector 7, , , , , , Electricity, Gas & Water Transport, Storage & Communications , Wholesale & Retail Trade, Hotels & Restaurants 2, , , , Finance, Insurance, Real Estate & Business , , , Services Government Services 1, , , , Other Services 1, , , , TOTAL 11, , , , , , Labour Force ('000 persons) 12, , , ,735.2 Unemployed ('000 persons) Unemployment rate (%)

23 PRODUCTIVITY BY MAJOR ECONOMIC ACTIVITY RM per wokers (RM per workers) Productivity by Major Economic Activity Annual Growth INDUSTRY Agriculture, Forestry, Livestock & Fishing 51, , , , Mining & Quarrying 1,088, ,083, ,139, ,202, Manufacturing 94, , , , Construction 24, , , , Services Sector 59, , , , Electricity, Gas & Water 198, , , , Transport, Storage & Communications 90, , , , Wholesale & Retail Trade, Hotels & Restaurants 54, , , , Finance, Insurance, Real Estate & Business 100, , , , Services Government Services 49, , , , Other Services 24, , , , TOTAL 68, , , ,

24 Malaysia: Employment by Major Occupational Group Malaysia : Employment by Major Occupational Group Annual Growth Jobs Creation Occupation 000' % 000' % 000' % 000' % Legislators, Senior Officials & Managers Professionals , , , Technicians & Associate Professionals 1, , , , Clerical Workers 1, , , , Service Workers & Shop & Market Sales Workers 1, , , , Skilled Agricultural & Fishery Workers 1, , , , Craft & Related Trade Workers 1, , , , Plant & Machine Operators & Assemblers 1, , , , Elementary Occupations 1, , , , Total Employment 11, , , , , , Unemployed Labour Force 12, , , , Skilled Wokers 3, , , ,

25 POINTS TO PONDER: ISSUES IN IDENTIFYING DEMAND FOR STEM Real demand from private sector for STEM graduates Future job creation globally and how Malaysia skilled workers meet this expectation Fast changing job trends due to ICT The need for current jobs to have various skill sets, especially soft skill Continuous need for upskilling and reskilling The need for better wages and renumeration packages How curriculum can be developed to meet the changing demand in the job market

26 AMIR BIN OMAR DIRECTOR HUMAN CAPITAL DEVELOPMENT SECTION ECONOMIC PLANNING UNIT, PRIME MINISTER S DEPARTMENT Economic Planning Unit, Prime Minister s Department