The Shortcomings Require New Competitive Strategies

1) The New Economic Model has exposed serious shortcomings. This is useful as it enables some clear identification of what needs to be done.
2) Over the past 30 years, Foreign Direct Investments (FDIs) have brought changes to the livelihoods of many in Malaysia. However, the country would now seem to need a range of different strategies.
3) The advantage of low cost is now with the likes of China and Vietnam. The small and medium sized enterprises (SMEs) have focused on serving the needs of the multinationals. This has lead to production efficiencies, but has not seen these businesses moving into the higher-value activites such as product design and research and development which would have been a driver for future revenues and growth.
4) If we look at what has been happening elsewhere in Asia, for example, South Korea and Taiwan, policies have been focused on domestic investment and niche strategies for growing their own multinationals and conglomerates. Examples are in automotive and shipbuilding sectors in Korea and semiconductors in Taiwan.
5) In many of these other Asian nations, FDI has supplemented domestic direct investment, unlike in many countries in SE Asia, like Malaysia, that has been too heavily reliant on FDIs.