FDI dilemma - where does Malaysia stand?

In the past we have taken bold and aggressive steps to woo foreign investors to put their money into our country. We have succeeded. It was the era where foreign company outsources manufacturing to country of strategic location with cheap labour cost and sensible tax incentives. They also need a regional hub to reduce the logistic costs and to be able to be near to capture prospective market namely Asia.

We have been blessed because in those days we do have cheap labour cost and South East Asia is the most stable in term of politics. It makes sense to do business in South East Asia. Plus at that point of time South East Asia are on the verge of developing, because of competition among the Asia countries, incentives are very attractively formulated and the set up is very relax.

Singapore at the beginning is very much into the manufacturing developing Jurong industrial area. They compete intensely to win investment over Taiwan and other prospects. Later they found out that they are lacking in term of land and manpower thus pack up their management skills to conquer site for regional office and regional financial hub.

The last few years the climate has changes where China and India politics are more open to attract investors. They are cheaper in term labour cost and outsourcing to India and China is making more sense as they provide hugh sales potential from their high population. They are even catching up in term of knowledge workers. India has a lot of competent engineers. Most of outsourcing for global call centres and global supports goes to India. China of course carries the title of World Manufacturer.
Environment has changed. Malaysia has to change. Before we come to the need justify why changes are needed to change for Malaysia, let us go back to China. Even China has to change eventually. China has become exporter of their own products. They are exporting automotive, machineries, telecommunication products. This is because they are the hard working people who always look for growth opportunities. While manufacturing other people product, they learn how the technology works and develop their by creatively imitating.

The west has seen China an emerging potentially threatening competitor. The Chinese has to change into a product developer and producer with their own branding. The west foresees this and they are taking measure to only outsource the low tech manufacturing to china. They are taking back the high tech manufacturing to their country. There reasons that I do not want to elaborate here. In short, capture and improve manufacturing techniques to themselves, to integrate R&D and manufacturing of high tech together, to reduce competition and preserve their margin and etc.

Enough of that, so where does that leaves us?. I dare not intend to elaborate here. We have a lot of strategist and economist. Let them wake up and think!. They should stop get busy with mere busyness, sit down, think and come up with one concrete plan. They should be reviewing the state that what we are in now, our current competitive advantages and our relevance. They should be thinking of what new skill and new approaches needed to be acquired. They need to argue where we are heading with the current climate. Lastly they need to think of the direction that we needed to go. Also they need to think of how to diversify our skills and future income.