The Government has drawn up the framework for the New Economic Model to propel Malaysia from a middle-income to a high-income economy based on innovation, creativity and high value sources of growth. Under this model, efforts will be intensified to target and attract industries in which Malaysia has strong foundations for new growth areas such as:
- Education and training services
- Healthcare travel (health tourism)
- High value tourism activities such as eco-tourism
- Green Technology including renewable energy and energy conservation/efficiency
- Financial services (integrated Islamic finance)
- Creative industries
- ICT such as telecommunication and mobile services
- Waste management (e.g. recycling)
- R&D and design activities
- Regional operations such as Principal Hub (PH), Representative Office (RE), Regional Office (RO) and Treasury Management Centre (TMC).
The services sector assumes an increasing share of GDP as the economy matures, as is evident in the case of developed countries. As Malaysia moves towards becoming a developed nation, greater emphasis should be targeted on the development of the services sector to serve as the engine of growth to propel and sustain the economy.
In the Eleventh Malaysia Plan, 2016-2020, the services sector will continue to be the primary driver of the economic growth. The strategies are formulated to enhance the competitiveness and resilience of the services sector and promote the migration into high value and knowledge-intensive services activities. The main growth contributors will be the wholesale and retail trade, financial services and communications subsectors, supported by strong household spending and stable labour market condition. Greater focus will be given to the modern and knowledge-intensive industries, including halal, ecotourism and information, communications and technology (ICT).
The development of the services sector will be guided by the Services Sector Blueprint, launched in 2015. The Blueprint aims to unlock the potential of the sector and transform it to become more knowledge-intensive and innovation-led. The services sector is expected to grow at 6.8% per annum and contribute 56.5% to the GDP in 2020, and provide 9.3 million jobs.
In addition, specific targets to transform the services sector are as follows:
b) Raising the contribution of knowledge driven subsectors to the GDP from 36% in 2014 to 40% in 2020; and
c) Increasing the share of services exports value added from 12% in 2010 to 19% in 2020.