Skill Formation in Malaysia: The Case of Auto Parts Industry

Abstract

This study takes the auto parts industry in Malaysia to demonstrate the difficulties a developing country faces in promoting skill development. Auto parts production needs a wide range of production techniques, which in turn require many types and levels of skilled workers. Realizing the importance of skilled workers, the Malaysian government has been emphasizing skill formation by increasing the number of technical schools, introducing a skill certification system, and giving a tax incentive to companies which undertake training for employees. Malaysia, however, lacks skilled workers, especially those at an advanced level, in order to sustain industrialization. This study attributes the shortage to the following four factors : insufficient government support, employers' lukewarm attitude, unfavorable skill environment, and weak individual interest. Korea is used as a contrast since it has overcome successfully the problems Malaysia has been facing.