A shock to the system?

I attended an excellent Conference at the KL Convention Centre today entitled "Liberalization and Government Support for Malaysian Professional Services Sector", organised by the Ministry of Works and the Professional Services Development Corporation. The Conference was timely given the new Primeminister's recent announcement concerning the speeding up of liberalisation in the country. Indeed in Malaysia the services sector is the lead economic sector driving growth of the economy. In 2008, private sector services contributed 47.6% to the GDP. The new target is to increase contribution of services to almost 60% by 2020. The construction industry is one of the big service sectors in terms of imports and exports, alongside Tourism, Air Transport, Maritime Transport and Education.

As I sat and listened to the presentations by keynote speakers from Government and the Professions, I couldn't help but think "welcome to the real world"! Protectionism is coming to an end in Malaysia. The challenges and opportunities of globalisation and greater liberalisation will begin to hit home. The big issues are a lack of awareness of the impact this will have in terms of the requirements under agreements through ASEAN Framework Agreement on Services (AFAS), ASEAN Dialogue Partners: China, Korea, Australia and Japan, and bilateral agreements between Malaysia and Japan and Malaysia and Pakistan, in addition to the World Trade Organisation (WTO).

Another issue is for a services sector to consider the best strategies to co-ordinate in enhancing capacity in terms of export to take advantage of opportunites overseas. Malaysia will also need to review immigration procedures to facilitate the movement of expatriates and professionals and to review existing rules and regulations to be consistent with Malaysia's commitments under WTO, AFAS etc. There would also seem to be a weakness in terms of the lack of reliable information and data in the services sector.

But the biggest challenge of all could be in changing the culture and mindset of a services sector such as construction. But change it must if it is to compete with probable increased international competitors at home and pursue overseas opportunities.

A key question in my mind is does the Malaysian construction services sector have the know-how and appropriate skills to meet these challenges? The answer is that if it hasn't, then it needs to learn them pretty fast. To be fair, a few of the big consultants and contractors in Malaysia have already established good track records in international markets. These should be the benchmarks for others to see how they have done it. The focus has to be on establishing strong branding, relationship skills and developing cultural adaptability when working in foreign markets. Construction service firms should also not forget the increasing demands of the domestic marketplace which, although slow at the moment due to global economic difficulties, will pick up eventually, and may include some new international competitors to contend with.