NUR KHALILAH BTE ABD RAHMAN 0933139 DIB 6 MALAYSIAN ECONOMY DMEG 6103 MDM NURZA BT MOHAMED YUSOFF

There are many issues and problems that can be discussed about the industrial sector amongst them being shortage of capital, lack of skilled labour, shortage of raw materials, problems in the international market, and lack of R&D.

The industry is made up of 3 sectors. They are the primary, secondary and tertiary sector.

Primary sector involves businesses such as agriculture in form of palm oil plantation, rubber plantation, cocoa plantation and others.

Secondary sector comprises of the manufacturing sector for example, Protons car factory.

Tertiary sector involves services such as tourism and hospitality, finance and medical services.

First issue or problem is the shortage of capital. As we know, to start or boost up any form of business require a big amount of capital as the businesses involved are that of Multi-National Corporations (MNCs). As such, entrepreneurs would need a big amount of capital to be able to run their businesses. Sources of this capital usually are from investors and loans from bank. There are strict procedures to be able to gain capital from these sources. Therefore it is a form of issue to be able to get sufficient capital in order to run or continue running the business in the various industries. The industries include plantations, manufacturing and services sectors.

Secondly, it is the issue of lack of skilled labours. Skilled labours are essential in maximizing the companies and industries production. Skilled labours will be able to work efficiently and bring the greatest output possible. Therefore it

is a problem to the industry when there are unskilled labours as the cost of labour is not to par with the production output. Therefore the industries would be suffering losses, as the cost of labour is more than the profit. Also the possible revenue could not be attained due to unskilled labours. Industries would also need to set aside cost to place the labours into training. This would then result in more maintenance cost.

The third problem is the shortage of raw materials. Although Malaysia is known as a country of abundance of raw materials, however not every raw material is available to Malaysia. Therefore, these raw materials need to be imported from overseas. The cost of these imports is extravagant and this would cause the overall cost of the product to be more expensive. This might then cause an unbalance in the economy, with the supply being more than what is demanded. This would then cause an unwanted condition of inflation.

Problems in the international market are the fourth issue to be discussed. When the industry sector is involved it is assumed that it is not only with consideration to the local market. The world in now globalised and to be able to improve the industry sector and maximize its production, relationship with international market is important. International market opens up many opportunities to the industries in Malaysia. The market pool becomes bigger and this means that more consumers for the product produced. However because the world and market is so globalised, the problems faced by a neighbouring nation would affect other nations too. When the US faced the recent Great Recession, the whole world faced the ripple. Due to this, Malaysias market becomes smaller too and it affected the sales and production of Malaysia.

The last issue would be the lack of Research and Development (R&D). For the industries sectors to be able to become highly efficient not only are skilled labours needed, high and advance R&D are also essential. R&D allows the industry to think of other ways to be able to produce in a cheaper and more efficient method. Low cost but high production. R&D is not only in terms of technology however in every sector such as agriculture, manufacturing and

services. The lack of R&D hinders Malaysia to be able to compete with other competitors. Therefore R&D is a problem that Malaysia has to correct to be able to be a strong competitor in its industries sector.