Rightways: : Malaysia

Showing posts with label : Malaysia. Show all posts

Friday, August 11, 2017

Malaysia must retool education, skills to adapt to knowledge economy

https://youtu.be/-5kgs6ecbHE

KUALA LUMPUR: Malaysia needs to reinvent its education system to adapt to the knowledge economy, which has led to a sharp reduction in unskilled jobs and spike in demand for data analysts.

Tan Sri Andrew Sheng, Distinguished Fellow of Asia Global Institute, University of Hong Kong, said Malaysia needs to retool its education and skills, and experiment across the spectrum, in positioning itself in the new economy.

“Formal education is outdated because of the speed of new knowledge. Companies do not spend on ‘on the job’ training, because of cost cuts and staff turnover,” he said during his presentation at the NCCIM Economic Forum 2017 yesterday.

Between 2007 and 2015, the loss of unskilled jobs was 55% relative to other jobs while demand for data analysts over the last five years has increased 372%.

In the global supply chain, old economy companies are quickly losing their edge as digitisation moves faster than physical goods while unskilled jobs will be quickly replaced by robotics due to the fast adoption of artificial intelligence (AI).

“Moving up the global value chain is about moving up knowledge intensity. If you don’t get smarter you won’t get the business.

“We are already plugged into the global value chain. We are very successful in that area but we cannot stay where we are. Remaining still is no longer an option. We need to move from tasks to value added growth to high value added production. In order to do that, we need to learn to learn.”

Sheng said the Malaysian economy is doing well but faces many challenges, including subdued energy prices, growing trade protectionism, geopolitical tensions and is still very reliant on foreign labour.

“Are we ready for the new economy? The way trade is growing is phenomenal but the new economy’s challenges are great and very complicated politically because technology is great for us as it gives us whatever we want but at the cost of our jobs,” he said.

When education fails to keep pace with technology, the result is inequality, populism and major political upheaval.

“What the new economy tells us is that robotics or AI (artificial intelligence) calls for Education 4.0, which means that we have to learn for life,” he said.

Sheng noted that Malaysia has successfully moved quietly into education services, medical tourism, higher quality foods, all through upgrading skills, branding and marketing.

“But formal education has become bureaucratised, whereas we are not spending enough on upgrading our labour force, prefering to hire imported labour,” he said.

Although Malaysia cannot compete in terms of scale and speed, especially against giants such as China, it can compete in terms of scope with strength in diversity, soft skills and adaptability.

“We are winners ... but have we got the mindset?” Sheng questioned.

He said Malaysia must upgrade its physical technology through research and development, harness its unique social technology and digitise its business model in order to create wealth.

While the government can help, he added, true success comes from community self-help irrespective of race or creed, and retired baby boomers who have wealth of experience must mentor the youth to start thinking about the new economy.

Eva Yeong, sunbiz@thesundaily.com

Related Links:

Andrew Sheng - Institute for New Economic Thinking

https://www.ineteconomics.org/research/experts/asheng

Andrew Sheng is a distinguished fellow at Fung Global Institute, chief adviser ... member of Khazanah Nasional Berhad, the sovereign wealth fund of Malaysia.

MALAYSIA URGED URGED TO LEVERAGE ON SOCIAL TECH ...

MALAYSIA should leverage on social technology, which is its true strength, ... Tan Sri Andrew Sheng, who is a distinguished fellow at Asia Global Institute, ... the new economy as it involves lifelong learning to adapt, innovate and create. ... To enhance the skills of the civil service, he pointed out Singapore's ...

Interview with Andrew Sheng | Yale School of Management

Andrew Sheng - Project Syndicate

https://www.project-syndicate.org/columnist/andrew-sheng

Andrew Sheng, Distinguished Fellow of the Asia Global Institute at the University of Hong Kong and a member of the UNEP Advisory Council on Sustainable ...

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Sunday, June 25, 2017

Money game scourge

Easier option: Poor experience with regulated investment product providers may be the reason for investors to go for ‘alternative’

Poor wealth management experiences fuel money games

OVER the past 2 months, it was virtually impossible to pick up any newspaper and not read reports about the money game phenomenon that has taken the media by storm.

It is as if the Pandora’s Box had been suddenly flung open by the exposé of JJPTR, leading to other similar schemes coming to light.

The victim profile ranges from white-collared professionals and savvy businessmen to senior citizens and housewives. It would appear as if just about anyone from different walks of life could be susceptible to these money schemes.

It is easy for observers and bystanders to pin the blame on the investors for getting themselves in a sticky situation. After all, if we apply the caveat emptor (buyer beware) principle to other types of goods and services, the investors should have clearly known the risks of subscribing to these money games and therefore should have been aware of the possibility of losing their investments.

So, what caused groups of people to lose their common sense when it comes to money games?

Scams come in many shapes, sizes and forms but look closely and you will see that they all have many things in common in terms of the modus operandi and the people they seem to attract. From JJPTR and MBI International right at our doorstep to China’s Nanning investment scheme and the most notorious Ponzi scheme of all times – the Madoff scandal, all these scams preyed on innate human weaknesses and appealed to investors’ desire to grow their wealth.

Many would be quick to label these investors as greedy or gullible, but I beg to differ. I see nothing wrong with wanting to achieve financial freedom and get higher investment returns. The people who invested and lost in these scams are not multi-millionaires with ample financial resources. They are average Malaysians who have worked hard and saved their money for a rainy day, only to see their nest egg disappear into thin air. What drove them to place the precious results of their blood, sweat and tears into unregulated investment schemes?

I am convinced that the reason stems from the investors’ poor experience with regulated investment product providers.

The so-called ‘push’ factor

There is a mismatch of what consumers need and what financial institutions are trying to sell. Consumers want guidance on how to use regulated investments as a means to grow their wealth with high certainty and achieve financial freedom.

The general public sees banks as an easy, accessible channel to obtain advice on personal finance and investment matters via wealth management services. There is no issue with legitimacy as the array of financial products and services available through banks are duly approved by the regulatory authorities.

The problem arises when investors are not getting what they need, which is advisory support, from their current wealth management providers. More often than not, investors feel overwhelmed by the choices available in the market. Worse still, investors do not know what action to take when their investments lose money. It is not uncommon to find that the wealth management providers are very attentive and proactive in recommending options; but once the sales is concluded, the investor is basically left to his or her own devices.

As a result of the lack of hand-holding or after-sales service, some investors may find that rather than growing money, they end up losing 20%-30% of their capital. The sheer irony of it is that because of the experience of losing money, they now perceive regulated investments as highly volatile and uncertain, and ultimately lose faith. I have personally encountered clients who harbour such misgivings about unit trusts, that they would bluntly tell me right from the initial meeting, not to propose such options to them.

I realised then the extent to which poor experiences with wealth management providers can lead to misplaced biases against certain investment vehicles even though investors could benefit from the right ones. When disillusioned investors turn their heads elsewhere, this is when they discover “alternative” investment options. And many end up falling for money games because they are sold on the idea of fixed return investments perceived to be low risk, coupled with the promise of better returns.

In this instance, the “push” factor, i.e. the unmet financial needs of consumers, which contributed to investors subscribing to shady schemes, has equal bearing to the “pull” factor (attraction) of these money scams.

“I am like any other man. All I do is supply a demand.” – Al Capone, American mobster

As with most goods and services that are detrimental to our well-being (e.g. junk food, cigarettes, gambling, etc), it is consumers’ demand for them that drives their industry and makes them thrive. Without customers, these shady businesses would naturally die off.

The ability of the money games to proliferate boils down to the “smart” business acumen of the operators to “fill the gap” so to speak. By offering an alternative investment scheme at a time when the market is slow and when many investors are experiencing losses, these money games are seen as a sudden golden ticket towards becoming rich. However, as we have seen, the golden ticket eventually loses its shine and the investors are left holding nothing but a worthless scrap of paper.

Therefore, there would be fewer victims of money games if the wealth management industry as a whole were to step up and reinvent themselves into a genuine one-stop financial centre to help their clients address all financial and investment issues at various points of their lives.

When the grass on one side is always greener, the rest will not matter

In order to ensure that they are seen by clients as the “go-to” person for all financial and investment related concerns, wealth management providers will need to exceed expectations and to a certain degree, over-deliver on their current role.

Wealth managers could assist clients to evaluate various investment proposals to determine its suitability and guide clients to use regulated investment vehicles to invest in various asset classes such as equities, bonds, REITs and foreign investments to grow their money effectively. They could also play the role of a financial bodyguard to help investors fend off scams and illegitimate investments.

In an ideal world, wealth managers will set aside sufficient time and effort to understand the client’s financial position in a holistic manner. They will prepare a tailored and dynamic plan with milestones and checkpoints to help monitor and review progress.

To my peers in the wealth management industry, I would say, cut the lip service and let’s get serious about managing and growing wealth for our clients.

When more and more investors realise that they are able to count on their wealth management providers for all the required support they need to achieve their financial end game, then money games will no longer have room to take root.

Money & You Yap Ming Hui

Yap Ming Hui (ymh@whitman.com.my) is a bestselling author, TV personality, columnist, coach and host of Yap’s Money Live Show online. He feels that the financial world is getting too complicated for everyone, and initiated a weekly online show to address the issues.For more information, please visit his website at www.whitman.com.my

Related Links

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