ABSTRACT
Exporting has been an important contributor to Malaysia’s economic growth and development since the country’s independence in 1957. The country’s export structure has evolved over time. Until the 1960s, the country was a major exporter of primary commodities such as tin and rubber. This changed when the country embarked on an export-oriented industrial policy in the late 1960s. As a result, the manufacturing sector and the export of manufactures became increasingly important. Today, the sector’s share of GDP is around 30 per cent and manufactured goods account for more than 80 per cent of the country’s exports. Despite venturing into import substitution in heavy industries in the 1980s, Malaysia continues to rely heavily on exports of manufactured goods, especially electrical and electronic products. The emphasis in recent years has been on moving up the value chain in manufactured exports. To achieve this, policy-makers have emphasized the importance of innovation and productivity. Take, for example, the Third Industrial Master Plan 2006–2020 (IMP3), which was launched in 2006. The key emphasis of IMP3 was stated as encouraging the country to ‘shift towards higher value-added activities and undertake productivity-driven growth initiatives, as well as adopt and apply higher levels of technology’ and human capital development to support these initiatives. 2
