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Dealing with Malaysia’s education dilemma
Published on: Sunday, December 10, 2023
By: Dr Rais Hussin And Chan Myae San
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Malaysia has lost many bright talents to other countries which gleefully accepted them.
With a massive brain drain in place, as more students join the gig economy instead of pursuing tertiary education, understanding the factors driving this disinterest in tertiary education is paramount to ensuring that the educational system remains relevant and effective in preparing individuals for the rapidly evolving landscape of the modern job market.
In an era of rapid technological advancements and shifting professional landscapes, the traditional pathways to success are undergoing a profound transformation.
The allure of flexible work arrangements, lucrative opportunities, autonomy and on-demand work gaining momentum challenges the conventional notions of the value of higher education.
Armed with a tech-savvy mindset and an innate entrepreneurial spirit, the younger generation questions the age-old narrative that equates tertiary education with assured prosperity.
This shift in attitude raises critical questions about the potential consequences for the future workforce, economy and societal development.
As per the Organisation for Economic Cooperation and Development (OECD), the enrolment figures in tertiary education serve as a measure of a nation’s prospective capacity for a skilled workforce in the future.
Global data also shows that higher tertiary education enrolment correlates with better national outcomes over time. There could be a reciprocal relationship, thus creating a vicious cycle.
However, Unesco’s (the United Nations Educational, Scientific and Cultural Organisation) data shows a concerning trajectory of tertiary education enrolment proportions in Malaysia.
Overall, Malaysia’s enrolment rate has been on the decline since 2016.
In 2020, Malaysia’s enrolment stood at 42.57%, while the world average based on 113 countries was 51.98%. This is significantly lower compared with advanced economies, such as Finland (95%), Singapore (93%), the US (88%), Germany (73%) or Japan (66%).
Consistently with OECD expectations, the Employment Statistics Second Quarter 2022 report by DOSM (Department of Statistics Malaysia) revealed that 62.2% of jobs were in the semi-skilled category.
If the decline in tertiary education enrolment continues, it can cast a shadow on the growth of the skilled workforce, consequently impeding the progress of the nation and making Malaysia’s objective of becoming a high-income nation a distant dream.
To address this issue, it is vital to understand the potential forces driving this change.
Brain drain and push factors
Public data shows an exponential increase of brain drain over the last four decades. According to global research, a decline in the quality of education is one of the contributing factors of brain drain.
At the same time, poor implementation and execution of affirmative policy in education is also a key factor behind the brain drain. Both factors can impede tertiary enrolment among capable students, who may prefer educational options abroad.
Earning less salary
According to the president of the Malaysian Employers Federation, Datuk Dr Syed Hussain Syed Husman, the average starting salary of graduates holding an honours degree is approximately RM2,700.
Meanwhile, a Grab driver can make around RM4,000 monthly.
Such a disparity in earnings has become a compelling factor for the younger generation when considering career paths, potentially steering individuals towards the gig economy rather than pursuing traditional tertiary education routes.
Misconception among youngsters
A misconception that gig work can offer a desired lifestyle may be rooted in inadequate information about the long-term implications of such employment and a lack of proper financial planning – retirement savings, future family support and economic safety net.
Holding a degree does not guarantee a high-paying job
Among the significant reasons for young people losing interest in conventional employment is an observation that holding a degree does not guarantee a high-paying job, especially in an economy with a shrinking industry complexity (breadth and depth) and predominantly low- and semi-skilled jobs.
With this uncertainty, the gig economy presents itself as a pragmatic option, offering a source of income without the perceived constraints of formal education.
According to the “Graduate Statistics 2021” by DOSM, from July 27, 2022, the number of unemployed graduates stood at 197,000 from 4.77 million graduates in the labour force, while underemployment of skill-related youths reached a new high, at 1.55 million as of 2021.
As more young people encounter difficulties securing jobs, many are drawn to the gig economy for quick income while seeking permanent employment.
However, there is a danger that such temporary work can become permanent as young individuals quickly become too comfortable with the gig economy’s flexibility.
Poverty
According to the article “Poor students forgoing higher education, cause for concern” by Bernama, there has been an increasing trend in students from low-income households forgoing higher education, especially after the Covid-19 pandemic.
High school graduates from low-income households who have completed their SPM (Sijil Pelajaran Malaysia) examination often face the obligation to enter the workforce to provide financial assistance to their families and cover their expenses.
The gig economy may appear as a profitable sector for these students, offering a swift income source.
The above shift in the younger generation’s perspectives about their career pathway can be a serious concern as the gig economy provides less stability, security and earning potential than a “regular” career in the long-term.
Gig workers are also not protected under the Work Act 1995 and other labour ordinances. Gig platforms often lack benefits, such as health coverage and paid leave, for workers. Job security is lower and gig workers shoulder more risk using personal resources for tasks, such as deliveries or freelance work.
Despite existing retirement savings options, such as EPF’s (Employees Provident Fund) i-Saraan for gig workers, their awareness and participation are limited. This highlights the need for government-led educational initiatives to boost awareness.
Malaysian Gig Economy Commission, to be announced in the 2024 Budget, seeks to address informal workforce challenges and ensure gig workers’ well-being.
This framework is crucial for supporting gig workers, facilitating their ongoing economic contributions and enabling skill enhancement – upskilling, reskilling and cross-skilling.
Without swift political intervention and effective remedies, Malaysia may witness a critical scarcity of skilled labour in the medium term, hampering businesses in their search for necessary expertise, deterring foreign investors and keeping the economy positioned at the lower echelons of the value chain.
Innovative education system reforms are essential to attract students towards tertiary education to promote a skilled workforce that aligns with the demands of the nation’s economy and ensuring competitiveness on par with more developed countries.
However, there is also the need to adopt a realistic and practical approach to resolve issues that align harmoniously with evolving perspectives and the job landscape.
Recognising that not all individuals are suited for traditional academic tertiary education is crucial.
Instead of solely emphasising the pursuit of conventional higher education, stakeholders must explore diverse frameworks that refine the entire societal spectrum, nurturing the highest potential within everyone.
Emir Research suggests the following:
Educational reform – aligning our education system with global trends set by successful national education systems and relevantising it for 4IR (Fourth Industrial Revolution) (and soon 5IR) reality.
Affirmative policy in the education system must be based on criteria while allowing flexibility for exceptionally bright students. As data shows, thus far, affirmative action due to poor implementation and execution has been ineffective in closing the intended gaps.
Introduce progressive wages linked to productivity, knowledge skills and abilities via the Input-Output-Outcome-Impact model.
Adoption of hybrid model in university – Malaysia can implement a similar university-industry partnership model as in the UK, which involves students dividing their time between practical training in workplaces and academic learning at universities, which will enable them to earn supplemental income while advancing their education.
Support underprivileged families of talented students by identifying them during their middle school years. By identifying them earlier, we can help those who may have potential but lack the motivation to pursue higher education due to challenging family circumstances.
This is also one of the mechanisms to extend the safety net in a targetted approach, notably by not just extending subsidies but employing or retraining and re-employing if necessary.
Normalising TVET (Technical and Vocational Education and Training) as an alternative institution to conventional education to produce industry-ready graduates.
The government must promote TVET as an equivalent choice for students who prefer non-conventional tertiary education, refraining from portraying it as inferior to university academics.
A successful Scandinavian model serves as a good example, where vocational education is highly regarded as equipping students with relevant skills for prosperous careers, and seamlessly integrates into the education system in a way that it holds parity with academic learning.
An integrated model between TVET and universities allowing TVET students to study in the local universities for up to one year can also be considered.
Locate TVET institutions in strategic places, such as Ipoh, Kota Kinabalu and Kuching, for effective collaboration between industries and universities.
Encourage corporate participation to commit to TVET Madani – examples are the recent TM (Telekom Malaysia) contribution of RM3.5 million for TVET Madani Success to enhance students’ employability and the Food Panda scholarship programme for riders to pursue a diploma in Manipal International University.
Strategic collaboration with local and international TVET institutions – provision of government scholarships for local TVET students to study in TVET institutions abroad.
Produce a high-skilled workforce that is equipped for digital economy, renewable industry, smart cities and others.
Education is fundamental in shaping society and determining the country’s future.
It can be the root of many socioeconomic issues, hence, innovations are tantamount to the system to ensure education is aligned with evolving practices.
Achieving this objective necessitates visionary leadership.
The writers are part of the research team at Emir Research, an independent think tank focused on strategic policy recommendations based on rigorous research.
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