Malaysia's AI moment: Dynamism without displacement
LETTER: A 2026 survey of nearly 9,000 executives across seven economies found that AI adoption raised annual labour productivity growth by just 0.2 per cent over the past three years, though executives expect a 0.6 per cent boost going forward.
A 2026 survey of nearly 9,000 business leaders across seven nations reveals that artificial intelligence adoption has only marginally increased annual labor productivity growth by 0.2 percent over the past three years, despite executives anticipating a 0.6 percent boost in the future. Malaysia's National AI Action Plan 2026-2030 aims to generate 0.8 to 1.2 percentage points of annual GDP growth, around RM13-20 billion, and create 300,000 to 500,000 AI-related jobs by 2028.
However, approximately 685,000 Malaysian workers could face significant job impacts within three to five years if reskilling efforts are not accelerated. Research indicates that 45 percent of the workforce, approximately 6.7 million individuals, have at least 40 percent of their job tasks potentially replaced by existing generative AI technologies.
The central policy dilemma lies in the fact that AI adoption without workforce adaptation will lead to dislocation, while workforce adaptation without AI adoption will leave Malaysia uncompetitive. The framework must be based on two key pillars: AI for economic dynamism and AI for economic stability. The first pillar focuses on boosting Malaysia's economy by enhancing the productivity of micro, small, and medium enterprises (MSMEs).
With MSMEs accounting for the majority of jobs in the country, the strategy should focus on disseminating proven AI tools to 4,000 MSMEs and ensuring measurable efficiency improvements. Currently, 76 percent of small business owners utilize AI, with 93 percent reporting positive outcomes, yet only 14 percent have fully integrated AI into their core operations.
The primary challenge is the lack of technical expertise and implementation support. The second pillar aims to stabilize the economy by mitigating the adverse effects of shocks and enhancing recovery capacity. The final section emphasizes that AI can boost productivity, enhance public services, and strengthen risk detection, but only if institutions, incentives, and support systems ensure that the benefits are tangible and costs are equitably distributed.
The ultimate goal is to convert this principle into concrete achievements and guarantee that Malaysia's AI moment results in growth without the loss of jobs.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
