KUALA LUMPUR - Malaysia’s long-term competitiveness will depend on its ability to overhaul talent development and create stronger high-value opportunities amid growing global uncertainty, former Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said.

Speaking at the FLUX Business Forum in Kuala Lumpur on May 22, Zeti said talent management has become increasingly critical as businesses navigate geopolitical tensions, supply chain disruptions, and rapid technological change, as reported by New Straits Times.

She said a more skilled workforce would help Malaysia improve productivity, unlock new opportunities and strengthen the country’s economic resilience.

Zeti stressed that Malaysia’s education system must evolve to meet changing economic demands.

She noted that workers today require different skill sets compared with previous decades due to the transformation of industries and workplaces.

She also highlighted the importance of economic flexibility, saying businesses and institutions can only adapt effectively if supported by the right talent base.

According to Zeti, businesses, policymakers and financial institutions must remain agile and avoid relying on outdated systems and conventional thinking.

Her remarks come amid growing concerns over Malaysia’s persistent brain drain and inability to retain highly skilled professionals.

Associate Professor Dr Nik Ahmad Sufian Burhan, head of social and development sciences at Universiti Putra Malaysia’s Faculty of Human Ecology, said Malaysia’s talent outflow reflects deeper structural weaknesses in the country’s economic model.

He said Malaysia has yet to generate enough high-value and high-skilled jobs capable of retaining local talent.

“The concern is not only whether people have jobs, but whether those jobs offer strong wages, serious career development and work that builds advanced capability,” he told Business Times.

Nik Ahmad Sufian was responding to the World Bank’s Malaysia Economic Monitor April 2026 report, which reveals that more than half of the 1.86 million Malaysians living overseas are employed in skilled and semi-skilled occupations.

Popular destinations for Malaysian professionals include Singapore, Australia, the United Kingdom and the United States, which actively recruit skilled workers through migration policies offering higher wages, clearer career progression and stronger innovation ecosystems.

The World Bank report stated that although Malaysia continues producing graduates and technically trained workers, the domestic economy has struggled to absorb highly skilled talent into productive and well-paying roles.

At the same time, Malaysia remains heavily dependent on low-skilled foreign labour, effectively positioning the country as a net exporter of talent.

Nik Ahmad Sufian said many young professionals in Malaysia find themselves trapped in jobs that underutilise their qualifications and offer limited advancement opportunities.

He said brain drain should be viewed as a structural economic challenge rather than a narrow policy issue.

“If wages remain modest, promotion is slow and many firms compete mainly on cost, skilled workers will naturally look elsewhere,” he said.

He added that Malaysia must move beyond investing solely in education and focus on strengthening domestic firms and industries that reward technical expertise, creativity and innovation.

The World Bank also pointed to growing signs of talent migration within Malaysia’s innovation landscape.

According to the report, Malaysian inventors are increasingly contributing patents to foreign-owned companies while locally owned patents have remained largely stagnant.

The share of patents involving Malaysian inventors owned by local entities declined from more than 60 per cent in the early 1990s to below 20 per cent by 2020.

Meanwhile, foreign-owned patents involving Malaysian inventors consistently performed better in terms of global quality indicators.

Nik Ahmad Sufian said the trend reflects weaknesses within Malaysia’s domestic innovation ecosystem rather than a lack of local talent.

He said foreign firms generally possess stronger research funding, better laboratories, clearer intellectual property strategies and stronger commercialisation pathways.

“Many domestic firms lack the scale, capital and risk appetite needed to turn ideas into patents, products and global revenue,” he said.

He warned that Malaysia risks becoming a supplier of skilled labour for foreign economies if the country fails to create stronger domestic opportunities.

According to him, the long-term effects extend beyond labour shortages and could weaken productivity growth, research capabilities, managerial quality and investor confidence.

“The greater danger is a cycle where limited high-end opportunities push people abroad, and the loss of talent then makes it harder to create those opportunities locally,” he said.

Nik Ahmad Sufian stressed that talent retention policies alone would not solve the issue without broader economic transformation.

“The most effective talent policy is to create better opportunities here, through stronger firms, higher productivity, merit-based advancement and a more ambitious innovation ecosystem that rewards excellence at home,” he said.