KUALA LUMPUR, Malaysia's investment landscape continues to grow despite global economic challenges, with approved investments reaching RM160 billion in the first half of 2024, an 18 per cent year-on-year (YoY) increase.
Over 60 per cent of these investments, totaling RM97.2 billion, were channeled into the rapidly expanding modern services sector, resulting in over 79,000 new jobs.
Speaking at a recent InvestKL event, Trade, Investment, and Industry Minister Tengku Datuk Seri Utama Zafrul Aziz emphasised the importance of leveraging this sector to transition from traditional manufacturing to a technology-driven economy.
Greater Kuala Lumpur has become a hub for global tech investments, with major companies like Google, Amazon, and Microsoft establishing cloud and data centers, while Oracle has committed to investing over US$6.5 billion to create a public cloud region in Malaysia.
Honeywell, which set up its regional headquarters in Greater KL in 2017, has invested more than US$500 million, adding executive roles and strengthening partnerships with key local companies such as PETRONAS, KLIA, Malaysia Airlines, and AirAsia.
The presence of companies like AstraZeneca and Kamstrup further highlights Malaysia's robust ecosystem, positioning Greater KL as a centre for innovation, technology, and growth.
Datuk Muhammad Azmi Zulkifli, CEO of InvestKL, praised the country's strategic efforts to attract high-value investments in areas like artificial intelligence (AI), data analytics, and smart city solutions.
"Modern services are the frontier for economic growth. It's a digital-based economy that supports traditional sectors and drives competitiveness," he said.
Azmi said that InvestKL's collaborations are strengthening the supply chain and nurturing talent to help Malaysia achieve its goal of becoming a high-income nation by 2030.
However, he also acknowledged ongoing challenges, such as the need for clearer policies and a skilled workforce.
"Malaysia must maintain its reputation for ease of doing business with adaptive, forward-thinking policies. Bringing back skilled individuals who have left Malaysia is critical to supporting our growth," Azmi said.
The InvestKL event also featured insights from key institutions, including the World Bank, the Malaysian Institute of Economic Research (MIER), and Permodalan Nasional Bhd (PNB).
Dr. Anthony Dass of MIER noted, "To sustain growth, Malaysia must modernise its manufacturing sectors and integrate modern services such as technology, communication, and business solutions."
PNB's chief economist, Dr. Kamaruddin Mohd Nor, underscored the link between innovation and economic progress.
"Economic growth hinges on innovation. To achieve this, we need a conducive ecosystem to foster innovation where startups and new ideas can come to fruition and deliver returns," he said.
Kamaruddin said that many countries that rank high on the Global Innovation Index by the World Intellectual Property Organisation, prioritise institutional support, research, human capital, ease of doing business, and access to credit.
"Malaysia should focus on encouraging innovation, especially in academic research and development."
Panellist Yu Cao, an economist at the World Bank's East Asia and Pacific Chief Economist Research Centre, emphasised the evolving relationship between services and manufacturing.
"For Malaysia to sustain its growth, it must modernise its manufacturing sectors. International studies show a positive link between modern services, such as technology, communication, information, and business services, with the manufacturing sector."
Malaysia must leverage this sector to transition from traditional manufacturing to a technology-driven economy, says the trade, investment, and industry minister.