Urgent need to plug brain drain;China SMEs look to invest in Penang

Wakeup Call | Brain drain is only a symptom

Business group proposes tax breaks and work visas to retain talent

PETALING JAYA: Immediate action should be taken to stem the growing trend of skilled Malaysians seeking employment overseas, says the Chinese Chamber of Commerce and Industry of Kuala Lumpur and Selangor (KLSCCCI).

Its president Datuk Ng Yih Pyng said the brain drain is a critical issue, particularly as Malaysia continues to attract substantial foreign investments but struggles with a shortage of local talent.

Ng emphasised the need for comprehensive measures in Budget 2025 to retain skilled professionals in the country.

“Last year, Bank Negara said nearly 500,000 Malaysians, mostly skilled professionals, were working overseas.

“To become a global leader in high-tech industries, addressing this brain drain is crucial,” he said at the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) 78th annual general meeting here yesterday, which was attended by Prime Minister Datuk Seri Anwar Ibrahim.

Ng proposed introducing tax breaks and work visas as incentives to attract and retain talent within the country.

He suggested the government explore policies to encourage foreign graduates from Malaysian institutions to begin their careers here.

“By granting work visas to foreign graduates in specialised areas, we can enhance our workforce and stimulate economic growth.

“This initiative should focus on roles that are challenging to fill, ensuring our local talent are not sidelined,” he added.

Ng spoke of the potential benefits of such policies for the education sector, saying that offering career opportunities to foreign students post-graduation would make Malaysia a more attractive destination for international education.

“This strategy not only tackles the brain drain but also solidifies Malaysia’s role as a hub for skilled professionals, promoting regional cooperation and advancement during our Asean leadership,” he said.

Beyond addressing the talent shortage, he called for additional funding in Budget 2025 to support the growth of small and medium enterprises (SMEs), which are pivotal to Malaysia’s economy.

He proposed increasing grant support and creating more flexible financing options for businesses in key sectors such as manufacturing and services.

“We recommend additional funding in Budget 2025 to further drive digital integration and boost efficiency.

“Establishing clear guidelines and a proper follow-through process will ensure these grants are accessible and utilised effectively,” he added.

Ng expressed gratitude for the government’s ongoing support for SMEs, particularly through initiatives like the SME Digitalisation Grant, but stressed that more needs to be done to bolster their resilience in the face of rising costs.

“Providing tax cuts and grants to SMEs can help ease financial pressures and promote job creation.

“This will enable SMEs to invest in new technologies, expand operations, and remain competitive locally and globally,” he said.

Take immediate action to address brain drain, urges ... 

Take immediate action to address brain drain, urges Chinese Chamber of Commerce president

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China SMEs look to invest in Penang - The Star

GEORGE TOWN: Some 50 small and medium enterprises (SMEs) from China are seeking opportunities to expand their businesses in Penang following the influx of over RM400mil into the state.

Malaysia Extra Low Voltage Association (Melvian) assistant secretary Cheah Chaw Son said that the Chinese companies want to explore opportunities in home furnishings, bio pharmaceuticals, technologies, advertising services, and eCommerces with local partners.

Melvian is an industry body that comprises companies providing ICT, audio and visual, security, and data network infrastructure solutions.

The SMEs from China are set to take part in a business matching session on Oct 22 at G Hotel to find suitable local business partners, that is being organised by Melvian

“In the first half of 2024, Penang attracted RM411.8mil in investment from China. For the past decade, Penang roped in RM13.2bil investments from China that formed 6.8% of Penang’s total foreign investments, with a 50.5% compounded annual growth rate.

“The influx of these funds into Penang attracted the companies’ attention. The Silicon Island development and the upcoming light rail transit project connecting Komtar and Bayan Lepas on the island also enhanced the state’s competitive edge as a pivotal investment hub,” he added.

Cheah is confident that Malaysia’s projected gross domestic product (GDP) growth for 2024 and 2025 will continue spur investors’ interest in the state due to the country’s robust economic health.

“The Socio-Economic Research Centre has projected that Malaysia would close the year with 5.4% GDP growth, sustaining at healthy clip of 5% in 2025,” Cheah said.

The companies would take part in a business matching session on Oct 22 at G Hotel to find suitable local business partners.

Tan Sri Tengku Razaleigh Hamzah will officiate the event jointly organised by Melvian, Small and Medium Enterprises Association, Meta Ex, and Honor Innovation Sdn Bhd.

“The event is also to commemorate 50 years of Malaysia-China Diplomatic Relations,” he said.

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IC designer Oppstar focuses on talent

 

Oppstar is one the few Malaysian companies in the front-end of the semiconductor industry, offering a full spectrum of IC design services. The chips we design play a prominent role ushering in a new era of digitalization and are used in various industries including telecommunication, consumer electronics, industrial electronics and automotive. 

Oppstar was founded in 2014 by three IC design industry experts, with the vision to become a preeminent global Semiconductor brand in R&D.

Oppstar Technology: We turn today's challenges into ...

“We would like to grow by double digits for our top and bottom line. our talent is our asset and our retention strategy is to pay them a competitive market rate.” Ng Meng Thai

WHILE Malaysia is known as having a strong base in the semiconductor industry, there are not many companies that operate in the higher parts of the sector’s value chain.

That is beginning to change, as a small number of companies are making a successful business out of designing integrated circuits (ICS).

IC designers, as they are called, design chips which are then tested out and manufactured by other parties.

One such IC designer in Malaysia is Oppstar Bhd, which is slated to be listed on the ACE Market in the middle of this month.

Its upcoming listing will see it raising funds mainly for the purpose of hiring more professional engineers.

This is a departure from the norm in the country’s public listing companies’ inclination where most of the funds raised would usually be channeled towards capital expenditure initiatives such as to build factory capacity or to acquire a fixed asset.

IC designers don’t need such assets as their value is in chip designing, which in turn is done by their engineering talent.

Investing in talent would help Oppstar expand its capacity to take on more projects and boost its competitive edge.

The company says it also aims to develop intellectual property (IP) assets with these new hires. The IP is meant to lead to additional income and at the same time improve its market profile.

In its prospectus, Oppstar says some of the IPS it aims to develop are for the RISC-V (or risk-five) based system on a chip. Such a system enables artificial intelligence and machine-learning applications to run on chips.

“These are technical terms in the industry but we can license these IPS separately or incorporate the IPS into future IC design projects,” Oppstar’s chief executive officer Ng Meng Thai tells Starbizweek.

The company would also like to expand into “post-silicon validation services” which would complement its IC design business.

The move would help improve its standing among its peers, says Ng, adding that all these plans would enable it to continue on its strong growth trajectory.

“We would like to grow by double digits for our top and bottom line. Our talent is our asset and our retention strategy is to pay them a competitive market rate,” Ng says.

Oppstar aims to more than double its engineering headcount to 500 from 220 presently and this effort would take up close to half of the funds or Rm50mil raised from its initial public offering (IPO).

Ng claims that demand for the company’s expertise is strong as it wants to expand its geographic reach to India, Singapore and Taiwan with the allocation of about a quarter or Rm25mil of the IPO proceeds.

“From time to time, we receive enquiries from customers. For the next three years or so, we would still need to continue to go out to find more customers to consume our capacity of 500 staff,” he says.

Its customers comprise integrated device manufacturers, fabless and fablite companies, electronic system providers and other IC design houses.

End-industries that require such expertise are the consumer electronics, telecommunications, industrial electronics and automotive sectors.

Its financials showed a gross profit margin of close to 60% and net profit margin of 33% in the financial year 2022 (FY22).

The company says its strong margins are driven by having turnkey design service projects, which command better margins when compared to specific design services.

As at the time of its prospectus issuance, Oppstar’s order book stood at Rm34.29mil, which mainly consists of turnkey design services and is expected to be recognised in the next 12 months.

With zero borrowings, Ng says the company will be in a good position to quickly capture opportunities and have these delivered to its bottom line immediately.

Notwithstanding that, retaining its talent that grants it its competitive advantage is key to its sustenance.

“We notice that younger talent are a bit different in valuing a job from what was considered as good 10 to 20 years ago, as workers then tend to value jobs from multinational companies (MNCS).

“Younger engineers surprisingly now would like to try all the different IC designs before locking themselves down in their career,” he says.

“If you go to an MNC, you would be focused on a very niche and narrow field in IC design. But since we have a broad customer base, our engineers will have the opportunities to experience a variety of design work.

“Also we have overseas customers as some 80% of our revenues are from overseas, so there are a lot of travelling opportunities for them as well,” Ng adds.

He points out that some 14% of the company’s public issue of new shares would be available for its eligible directors, employees and business associates who have contributed to its success.

“This would help us retain some of our talent for the longer term. Last year, we saw a low single-digit rate in the turnover of our manpower.

“The original team of the three founders that started the company have stayed on until now and we grew the employee count to about 220 currently,” he adds.

The company is also eyeing other growth opportunities such as through joint ventures and inorganic ones after its listing. 

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Is education fit for the future?

 

Malaysian pride: Tan, who is from Muar, was appointed to the most senior technology position at Nasa recently. – nasa.gov

 NASA Engineer Florence Tan presented a Maniac Lecture entitled, "From Malaysia to Mars." Florence talked about her journey from Malaysia to NASA Goddard Space Flight Center, where she has been working on planetary mass spectrometers, which is characterized by challenges, frustration, excitement, and rewards.

 Only with the application of inclusiveness will retain our best workforce.

EVERY time we read about Malaysians making a mark globally in their respective fields, pride and joy course through our veins knowing these people have elevated our country’s standing.

Recently, that proverbial uplifting news featured six young Malaysians acquiring seats in the prestigious Harvard University for the class of 2026.

The students received offers of admission amidst stiff competition from a global applicant pool of 61,220 students, it was reported.

Last week, another piece of good news surfaced. A Malaysian from Muar, Johor, Florence Tan, was appointed Deputy Chief Technologist at the National Aeronautics and Space Administration (Nasa) – the most senior technology position.

She had left Malaysia at 18 to study in the United States, and then started to work with Nasa, beginning as an intern at one of its research centres.

When I read those two stories, I couldn’t help pondering if the six Harvard students would return to Malaysia someday, perhaps after gaining experience in the US and other countries.

And what can Tan really do in Malaysia, even if she chose to return home? After all, we can’t cater to her expertise, experience and skill in Your chance to fly Singapore Airlines to London for free with this new card from Maybank

But more and more, when we read of these high achievers, the media is compelled to refer to them as “Malaysia-born,” which is a euphemism for Malaysians who have emigrated overseas and are not nationals of our country any longer.

At least we’re sure that two legendary Malaysians of global repute, Hollywood actress Tan Sri Michelle Yeoh and shoe designer Datuk Jimmy Choo are hanging on to their Malaysian passports.

Unfortunately, Malaysia is one of the countries most affected by brain drain, as it faces a major problem in not only being incapable of delivering the required talent, but also in failing to retain the current local talent or attracting foreign ones, as a report in cs.stanford.edu put it.

The World Bank defines brain drain as the migration of talent across borders, which has an impact on Malaysia’s aspiration to become a high-income nation.

“Human capital is the bedrock of the high-income economy. Sustained and skill-intensive growth will require talent going forward.

“For Malaysia to be successful in its journey to high income, it will need to develop, attract, and retain talent. Brain drain does not appear to square with this objective: Malaysia needs talent, but talent seems to be leaving.

“Brain drain is a subject of intense debate and controversy, but surprisingly few studies have characterised the phenomenon in the Malaysian context – be it in terms of magnitude, impact, or policy response.

“What complicates matters further are the statistical discrepancies that limit the quality, availability, timeliness, and comparability of international migration data,” wrote its senior economic advisor Philip Schellekens.

He quoted the World Bank’s Malaysia Economic Monitor saying that the Malaysian diaspora – the group of skilled and unskilled Malaysia-born women, men and children living overseas – is estimated conservatively at one million worldwide as of 2010.

“A third among these represent brain drain – those with tertiary education among the diasporas. This is not to suggest that others are not ‘brainy’, but educational attainment is the only available proxy that is consistently available across recipient countries.

“To put the numbers in perspective, two factors are important: the size of the skills base and the profile of immigration.

“Because of the narrow skills base, brain drain is intense in Malaysia and is further aggravated by positive selection effects, as the best and brightest leave first.

“Further, brain drain is not alleviated by compensating inflows, since migration into Malaysia is mainly low-skilled with some 60% with primary education or less and the number of high-skilled expats has fallen by a quarter since 2004.”

As of 2019, there are 952,261 Malaysians or Singaporeans of partial or full Malaysian origin residing in Singapore. And including the permanent population in the country, about 350,000 Malaysians cross the Johor-Singapore Causeway daily to commute to work or school.

Australia is another popular choice for Malaysians, with 177,460 people living there in 2020, according to a report, while the 2016 census from the Australian Bureau of Statistics reveals that 138,364 Malaysians became permanent residents or citizens.

There’s nothing wrong with us continuing to look for low-skilled labour for our oil palm estates, restaurants and homes – many West Asian countries are in the same predicament. However, Malaysia needs to embrace the global mobility of talent, too.

For a start, we must admit that the biggest criteria are the differences in earnings, career prospects, opportunities, professional exposure and quality of life.

The elephant in the room for many Malaysians is the discontent with our country’s affirmative policies, particularly among the non-bumiputras who see their chances of climbing up the ladder hampered by their ethnic origin.

The painful truth is, many talented non-bumiputras, especially the Chinese, make up the bulk of the diaspora.

In all fairness, the government, via Talent Corporation Malaysia, has developed many initiatives to encourage Malaysians to return, but a better carrot needs to be dangled.

Singapore, one of the best-run countries, has the same problem as it faces a challenge to retain quality citizens because the country’s brain drain rate is higher than the global average with six in 10 Singa-poreans willing to leave the country in pursuit of a better job, according to a Randstad Workmonitor research report.

The study revealed that the brain drain rate in the Lion City is higher than the global average of 50%. It’s also higher than Hong Kong’s 56%, but slightly lower than Malaysia’s 66%.

It said 68% of Singaporean workers, aged between 18 and 34 years old, are willing to pack up and leave their country.

In many ways, ethnic Chinese, like their forefathers, are a migratory race, regardless of their nationalities, with many selecting Canada and Australia as their choices during the last 20 years, according to statista.com

In 2013, the United States and Canada became the countries with the highest immigration rate of millionaires from China, according to Hurun Research Institute.

China is reportedly one of the world’s largest emigration countries as well as the country with the biggest outflow of high net worth individuals between 2003 and 2013. Likewise for many Hong Kongers and Taiwanese.

Our politicians love to use the term “world class” when they talk about Malaysia, but we need to really walk the talk or else it remains hollow and unconvincing. If we’re indeed top of the heap, we should be getting top notch workers queueing up to work here. 

Wong Chun Wai

Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 35 years in various capacities and roles. He is now group editorial and corporate affairs adviser to the group, after having served as group managing director/chief executive officer.On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.

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Mission to turn China into talent hub

 

 An opening ceremony of the Global Talent Innovation and Entrepreneurship Summit is held in Shanghai, Sept 29, 2021. - Xinhua

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Technology and Innovation in China's Path to 2035

Xi wants country to rank among world’s best as strategic force in science

BEIJING: President Xi Jinping has set out a vision to develop China into a global hub for talented people and innovation, with steps to train and bring in more top-flight professionals to enable them to fulfil their potential.

Speaking at a central work conference on human resources – held in Beijing on Monday and Tuesday – Xi called for greater emphasis to be given to training talent and quicker steps to establish a competitive edge in human resources.

As China edges closer to the grand goal of realising its great rejuvenation, the nation is more eager for talented people than at any period in history, said Xi, who is also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission.

The country’s competitive strength and national development and rejuvenation hinge on the fostering of more talented people, he said.

Xi summed up key experiences of the nation’s work related to talent in eight areas, including adhering to the Party’s across-the-board leadership, following the strategy of talent-led growth and focusing on the forefront of global science and technology, the economy, the major demands of the country and people’s health.

He unveiled the nation’s goals in this area over the next 15 years..

By 2025, China will see a sharp increase in spending on research and development, secure important progress in developing a leading force in scientific and technological innovation, bring together more top scientists and have a large number of talented people in core technologies..

China will establish a talent system in keeping with high-quality growth and have stronger appeal to high-calibre talent globally by 2030..

By 2035, China aims to rank among the world’s top nations in terms of being a strategic force in science and technology and have high-calibre talent, he said..

The president proposed building a leading area for high-calibre talent in Beijing, Shanghai and the Guangdong-hong Kong-macau Greater Bay Area, saying that the nation’s high-quality resources should prioritise support for a group of national laboratories and new research institutions..

In deepening the institutional reform for talent development, Xi highlighted the need to give play to the role of employers in training and bringing in talented people and enabling them to fulfil their potential..

Scientists must be given greater say in deciding what technological routes to take, allocation of funds and resources, he said, adding that it is equally important to ensure that scientific and research programmes can yield outcomes..

Xi urged stronger efforts to train scientists and enable them to play a more important role, adding that it is important to find more scientific workers with broad horizons, strong foresight and judgment..

The role of national laboratories, research institutions, high-level universities and leading tech companies must be amplified to develop a large number of leading scholars and innovation teams, he said..

The nation must focus the strength of its talent policies on young specialists while enabling them to take major responsibility, he added..

China, with the world’s biggest higher-education system, is capable of training a large number of high-calibre talented people, giving rise to leading scholars, he said..

Higher-education institutions, especially top universities, must play a major role in training talented people in the areas of fundamental research, with measures to develop a host of training bases in fundamental science, he said..

Xi also underlined the need to give rise to more philosophers, social scientists and artists, saying that stronger measures must be taken to enhance international exchanges of talent. — China Daily/ ANN.

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