KUCHING: Malaysia is performing marginally higher than the global average while maintaining its ranking at No 26 on the Ernst & Young (E&Y) 2012 Globalisation Index.
E&Y in the index report noted that compared with the 2011 Globalisation Index, Malaysia demonstrated an overall improvement across most indicators and outperformed the global average in trade.
“While globalisation continues, it does so at a slower pace. Trade, technology, culture, labour and capital will integrate at different rates across the 60 countries measured in the index.
“Technology, in particular, has become the key driver of globalisation, promoting innovation across nations and cultures,” it highlighted in the report.
“Businesses, especially those in developed markets, will need to rethink their strategies to remain competitive in this rapidly changing world characterised by volatilities, uncertainties, complexities and ambiguities.”
Meanwhile, E&Y Malaysia markets leader Azwan Baharuddin commented, “Analysis of the 2012 Globalisation Index results indicate that Malaysia is progressing steadily, driven by technology and trade.
As one of the Rapid Growth Markets (RGMs), Malaysia is projected to outperform across all five indicators – trade, capital, labour, technology and culture – leaping forward to 20th place from 2013.”
According to Azwan, Malaysia’s projected leap forward by six notches in 2013 would be powered by the country’s ongoing improvements in technology and talent pillars.
In fact, Malaysia’s technology pillar was expected to be strengthened by the rapid growth of internet subscriptions and broadband penetration while its talent pillar would be advanced with the ongoing efforts of institutions, such as TalentCorp, pivotal in attracting local and skilled foreign talent from abroad, besides developing talent within the country.
“However, there is scope for Malaysia to optimise its performance to be a well-developed economy by 2020.
“A synchronised and seamless mode of improving performance in each of the five indicators must be taken across government policies, industry institutions and players to move Malaysia further up the Globalisation Index by 2020 and beyond,” he added.
Going ahead, E&Y advised Malaysian businesses to capitalise on the global and regional opportunities, particularly in markets which they might not have considered before.
This could mean investing in developed and emerging countries which are not obvious choices of today. Creating customised strategies for carefully chosen markets and leveraging on technology would offer businesses the potential to grow despite the economic challenges.
Companies would also need to review their operational processes and adopt a mantra of speed and flexibility in meeting the rapid changes and demands of volatile markets.
Additionally, E&Y Malaysia managing partner of Advisory Services said, “Strategic thinking in the allocation of resources between slow and rapid growth markets, empowering local leaders to make decisions swiftly in pursuing opportunities, and transforming companies into ‘learning organisations’ which leverage on the wealth of data made available through technology, will prepare companies to adapt to change better.
“Smart technology and talent investments in tandem with rigorous quality processes, applied internally and externally will help secure a company’s competitive advantage in the long term.”
The Globalisation Index developed for this report measures and tracks the performance of the world’s 60 largest economies according to 20 separate indicators that capture the key aspects of cross-border integration of business.
The indicators fall into five broad categories: openness to trade; capital movements; exchange of technology and ideas; labour movements; and cultural integration.
The Index measures ‘relative’ rather than ‘absolute’ globalisation.
This means that a country’s trade, investment, technology, labour and cultural integration with other countries is measured relative to its GDP rather than by the absolute value of these elements being exchanged.
The Index, therefore, reflects the degree to which the global integration of a country is observable or experienced from within that country.