Agglomeration of industries in Malaysia

Press/Media: Expert Comment

Period17 Apr 2022

Media contributions


Media contributions

  • TitleAgglomeration of industries in Malaysia
    Degree of recognitionNational
    Media name/outletBorneo Post
    Media typePrint
    DescriptionIn the coming decade, the country’s shift towards higher value-added industries and the service economy is pertinent to ensuring continuous competitiveness and productivity growth. The success of the tiger cub economies of Southeast Asia, which includes Malaysia, Indonesia, the Philippines, Thailand, and Vietnam, has been contingent on substantial government intervention.

    The substantial government intervention has permitted Malaysia to chart a more rapid and balanced economic development than its neighbours. Conforming to Marshall’s agglomeration theory, Malaysia’s spatial policy allows different state governments (regional polities) to close the development gap and equalise job opportunities. The concentration of industries spurs local development through skilled labour, supplier linkages, and knowledge spillovers. Additionally, establishing economic regions (such as the Northern region, Southern region, East Coast region, East Malaysia) has helped bridge the growing imbalance among states in Malaysia. In order to identify the regional agglomeration of industries, location quotient (LQ) measurement is calculated using existing state-level employment data.
    PersonsKoh Geok May