Malaysia has moved up to the 26th position out of 88 countries in the Global Talent Competitiveness Index 2020 (GTCI 2020), which is two spots higher than its 28th ranking last year.
The Malaysia Digital Economy Corporation (MDEC) said Malaysia's newly-earned accolade for talent development had dominated in multiple categories.
It said the country was the only one from the upper-middle-income bracket that was in the top quartile of the report.
Malaysia has also outperformed high-income economy countries, such as China, South Korea, Spain and Portugal.
"These achievements reinforce the fact that Malaysia is on the right track to develop industry-ready digital talent.
"We must continue to improve our workforce and provide a conducive environment for digital innovation and creativity to thrive.
"More importantly, businesses need such talents as entire industries must be digitalised as the global economy explores a new norm post-Covid-19.
"This is where our digital talent development, digital adoption and global growth accelerator programmes for high-potential local companies will play a key role in upskilling our talents to the next level," said MDEC chief executive officer Surina Shukri.
In terms of performance ranking, Malaysia scored strongly in the Enable, Attract, and Vocational and Technical Skills pillars. It also improved its ranking significantly in the Retain pillar.
These pillars are the key thrusts in the country's continuous investment in talent development and act as the pivot to empower businesses to deploy new technologies that enable and sustain business performance and continuity.
The report commended Malaysia's ability to consistently match labour market supply and demand, coming in at 6th place globally for Employability.
It also placed high in two sub-pillars that relate to talent enablement — Business and Labour Landscape (13th) and Market Landscape (22nd).