INGENIEUR
Figure 8 – Service Sector Benchmarking
Malaysia intends to become a developed and high
income nation the country’s service industry must,
at minimum, emulate Australia whereby 68% of
the contribution to GDP comes from the service
industry.
How do these reforms relate to the local
engineering service industry? The local industry
has been more or less stagnant for the past decade
depending on the internal economy rather than the
global economy. There are more and more firms
entering the local market but with less and less
of the “pie” to sustain real growth. The tendency
was to introduce “protectionist” measures looking
towards the Government to provide “jobs” which
in the longer term tends to be counter-productive
to creating a healthy and competitive engineering
service industry. An uncompetitive industry does
not bode well for both the consumer and the
public at large as it will lead to an industry that is
heavily dependent on Government subsidies and
handouts. Liberalisation is meant to remove these
unhealthy traits and instead be a wealth creating
industry contributing to the country’s GDP.
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Economic reforms must therefore be
undertaken for the service sector industry in
particular areas as shown in Figure 9 which are
meant to improve the overall competitiveness of
the industry.
Basically there are three reforms which are
intertwined; improving the standards and quality
of Malaysian service providers, the introduction of
competition law and the liberalisation of services.
The Competition Act of 2010, for example, has
been enacted to seriously review whether the
“Scale of Fees” set by the various professional
boards are competitive or not. All developed
countries have outlawed “professional fees”
that are set by the professional boards or the
institutions as illegal, anti-competitive and not to
the best interest of the consumer.
The intention of these reforms is to increase the
competitiveness of Malaysian service providers
to compete in the global world (and within the
domestic market as well) and to increase their
share of contribution to the desired level of 68%
of the country’s GDP.