Something I wrote for PIKOM's HR newsletter - May 2004:
Policy Framework for Talent Development
in the ICT and Offshore Services Industry
By Rob Cayzer
Background
Malaysia is in the cusp of transforming into a fully developed nation, with a highly productive manufacturing sector and half of her wealth stemming from the services sector. Through the Multimedia Super Corridor, Malaysia has augmented its position as a leader in offshore manufacturing into a global services powerhouse. A recent global survey by AT Kearney indicates Malaysia’s 2004 attractiveness ranked as third in the world.
Malaysia’s Talent Benchmark
According to the survey, Malaysia scores highly in business environment and financial structure. However, Malaysia ranks 20th on people skills and availability. Smaller countries such as Singapore, New Zealand, Ireland and Czech scored higher than Malaysia. Although some of the analysis may be open for discussion, there exists a clear signal: we need to improve the competitiveness of our talent pool.
In the mid-term, our strategy to create up to 100,000 shared services and outsourcing jobs will not be impacted by this concern. However in an ICT context, it is imperative to increase the quantity of high quality professional talent in order to reach the goals of Vision 2020.
Country Labour force , millions ATK Rank: People / Availability
Ireland 1.8 4
New Zealand 1.9 6
Singapore 2.5 8
Czech 5.2 12
Australia 9.2 3
Malaysia 9.9 20
Canada 16.4 2
India 406 1
China 744 7
ICT Industry Is Unique
Traditional professions such as finance, medicine, engineering and law are more stable and highly codified. In these professions, talent development activities include a rigid higher learning curriculum, industry endorsed professional certifications, robust professional societies and structured career based training. The picture for the Information and Communication Technology industry is very different.
The ICT industry is characterised by low regulation, high dynamism, low barriers of entry and high levels of employee attrition. The industry continually creates many computer languages, applications, network and computing platforms . Consequently, existing technologies (and skills) are rendered obsolete at a fast pace.
This translates into the need for companies, the workforce and the labour force to continually upgrade its skills – and maintain at world-class levels. This is a demanding process. Although talent development for the ICT industry should broadly mirror traditional professions, there is a need for a unique approach if we are to transform Malaysia into a global technology and innovation hub.
The Malaysian ICT Industry Mosaic
Employees in the IT industry comprise 15% of IT companies and 85% in non-ICT companies, generally as an IT shared service. This means there exist two types of skills: one that designs, manufactures and markets products such as hardware, software and networks and the other focuses on ensuring the corporation’s ICT systems deliver high impact solutions for their core business.
Before the advent of the MSC, levels of new technology development and offshore services in Malaysia was limited. Talent development was driven through education and training as required by the local market. Today’s scene is different. Although still at a nascent stage, there now exists a burgeoning demand for new set of skills sought by world-class companies using Malaysia as a global hub. This is the new challenge.
A third dimension relates to local firms with ambitions to go global. These firms have a tougher time when sourcing talent. Generally speaking, jobs from multinationals are more secure, provide significant intellectual capital, international project opportunities and makes for good employee reference. In order to create a robust industry, benefits provided by local players must match multinationals in value (both not necessarily in the same form).
There needs to be a comprehensive approach for talent development – beyond the current education and training framework. Other concerns include recruitment, immigration, taxation, compensation, retention incentives and mentoring - see appendix A.
The ICT Talent Conundrum: How to keep up with the Jones?
Creating “industry head start” through the youth technology culture
In other countries, many IT students have a grasp of core skills even before starting university: programming and design. This represents a significant head start for the industry. To become a global hub, Malaysia must also have the same “head start”.
Computer programming is highly complex and is not (yet) a highly codified practice. Budding technopreneurs improve their skills through endless hours of practice on home computers. In my youth, one who possesses these traits was branded as a nerd. Today, the outlook on these budding technopreneurs is very different. It is an imperative that we create an army of young programmers and technicians.
My supposition is that the head start can be achieved by creating this youth ICT culture. Specifically, at least 5% of twelve-year olds with substantial access a net-based computer will become an IT programmer (it used to be 100% twenty years ago).
Industry and government should develop incentives for this culture, consisting of affordable access to development environment , peer based recognition for excellence in practice and industry internships. These measures will create hundreds of thousands of highly skilled youth workers.
Institutes of Higher Learning: Harmonising with the World’s Best
With the advent of the “dotbomb” and new waves such as bio-tech, naysayers have predicted the end of the ICT revolution. Nothing could be further than the truth. In fact, the industry is entering another metamorphosis. The arrival of new platforms such as cheap computing, wireless and wearable devices is transforming PCs, printers and mobiles into commodity products. This is the reason the stock value of major computing companies have flattened out, coupled with limited product releases.
The challenge for Malaysia is to develop and attract the talent that can commercialise new technologies and create next generation applications. However, it is imperative that the educational basics for computing and engineering reach world-class status.
World-class companies have strict talent and educational requirements: a good command of English, dependable and technical adeptness. For local institutions to be the provider of the best talent, educators need to ensure their curriculum is up to date, ensure their personnel have relevant skills, establish a rigorous examination regime and maximise actual project experience. Three measures are recommended:
• Harmonise with international institutions
• Attract the best local talent as administrators, educators and researchers
• Avail a wide range of internship opportunities
Low Cost Certified Training: The Bedrock of Competitiveness
Once in the workforce, there exists a need to ensure individuals undergo continuous training. This is due to extensive technology changes stemming from industry innovation. However, training courses are very expensive, even for employers. This is partly because qualified trainers are predominantly foreigners and there exists insufficient volume of business for trainers to reduce costs.
In order to reduce costs, an up to date forecast must be maintained by industry to show the specific training needs of the industry. In turn, both government and industry must negotiate with training content providers, primarily technology developers, to lower their prices.
However, there exist some skills which do not change over time: programming, project management and systems integration. Industry and the industry’s leaders must assemble world-class certification requirements in these basic areas. In turn, government should provide incentives for individuals to meet them.
Policies for Higher Performance and Local Advantage
Compared to multinationals, local IT companies have a harder time attracting world-class talent. To increase attractiveness, incentives must be created for local talent to join competitive local companies and invest time to build them into world-class organisations. There may also be a need to attract foreign talent and technology into local firms to capture best practices. In Korea, foreign knowledge workers employed by local firms are 100% exempted from personal tax.
Multinationals also need to ensure they have sufficient talent. As such, we must strive to ensure they are able to bring in qualified staff.
Summary
ICT continuous to be a highly innovative industry, characterised by a massive youth following. It is also uniquely unregulated, bound mainly by pseudo standards with opportunities for new players to enter the market. In order to achieve this, players need to be armed with a surplus of high quality talent.
This is achieved not only through traditional education and training. A high level of integration with industry is required comprising the following measures:
Industry Head Start
• Affordable access to development environment
• Peer based recognition for excellence in practice
• “PreU” internships
Education and Training
• Harmonise with international institutions
• Attract best local talent
• Industry Internships
• Industry wide training needs forecast
• Lower course prices
Local Advantage
• Gov’t incentives to join and build up competitive local firms
• Gov’t incentives to attract foreign talent, for limited period
In short, associations such as PIKOM, the government and leading institutions should work with leaders in the global industry to develop the above measures and make Malaysia a global hub for technology and innovation.
APPENDIX A: Policy Framework for Talent Development
Demand Drivers:
Local Companies
- Exporting IT firms
- Other IT companies
- Non-IT companies
Multinational Companies
- IT companies
- Non-IT companies
Supply Factors:
- Pre-education
- Education
- Training
- Employment Incentives
As shown above, the supposition is that the industry does not have empirical data regarding specific supply needs. A priority is to reach this determination
Policy Framework for Talent Development
in the ICT and Offshore Services Industry
By Rob Cayzer
Background
Malaysia is in the cusp of transforming into a fully developed nation, with a highly productive manufacturing sector and half of her wealth stemming from the services sector. Through the Multimedia Super Corridor, Malaysia has augmented its position as a leader in offshore manufacturing into a global services powerhouse. A recent global survey by AT Kearney indicates Malaysia’s 2004 attractiveness ranked as third in the world.
Malaysia’s Talent Benchmark
According to the survey, Malaysia scores highly in business environment and financial structure. However, Malaysia ranks 20th on people skills and availability. Smaller countries such as Singapore, New Zealand, Ireland and Czech scored higher than Malaysia. Although some of the analysis may be open for discussion, there exists a clear signal: we need to improve the competitiveness of our talent pool.
In the mid-term, our strategy to create up to 100,000 shared services and outsourcing jobs will not be impacted by this concern. However in an ICT context, it is imperative to increase the quantity of high quality professional talent in order to reach the goals of Vision 2020.
Country Labour force , millions ATK Rank: People / Availability
Ireland 1.8 4
New Zealand 1.9 6
Singapore 2.5 8
Czech 5.2 12
Australia 9.2 3
Malaysia 9.9 20
Canada 16.4 2
India 406 1
China 744 7
ICT Industry Is Unique
Traditional professions such as finance, medicine, engineering and law are more stable and highly codified. In these professions, talent development activities include a rigid higher learning curriculum, industry endorsed professional certifications, robust professional societies and structured career based training. The picture for the Information and Communication Technology industry is very different.
The ICT industry is characterised by low regulation, high dynamism, low barriers of entry and high levels of employee attrition. The industry continually creates many computer languages, applications, network and computing platforms . Consequently, existing technologies (and skills) are rendered obsolete at a fast pace.
This translates into the need for companies, the workforce and the labour force to continually upgrade its skills – and maintain at world-class levels. This is a demanding process. Although talent development for the ICT industry should broadly mirror traditional professions, there is a need for a unique approach if we are to transform Malaysia into a global technology and innovation hub.
The Malaysian ICT Industry Mosaic
Employees in the IT industry comprise 15% of IT companies and 85% in non-ICT companies, generally as an IT shared service. This means there exist two types of skills: one that designs, manufactures and markets products such as hardware, software and networks and the other focuses on ensuring the corporation’s ICT systems deliver high impact solutions for their core business.
Before the advent of the MSC, levels of new technology development and offshore services in Malaysia was limited. Talent development was driven through education and training as required by the local market. Today’s scene is different. Although still at a nascent stage, there now exists a burgeoning demand for new set of skills sought by world-class companies using Malaysia as a global hub. This is the new challenge.
A third dimension relates to local firms with ambitions to go global. These firms have a tougher time when sourcing talent. Generally speaking, jobs from multinationals are more secure, provide significant intellectual capital, international project opportunities and makes for good employee reference. In order to create a robust industry, benefits provided by local players must match multinationals in value (both not necessarily in the same form).
There needs to be a comprehensive approach for talent development – beyond the current education and training framework. Other concerns include recruitment, immigration, taxation, compensation, retention incentives and mentoring - see appendix A.
The ICT Talent Conundrum: How to keep up with the Jones?
Creating “industry head start” through the youth technology culture
In other countries, many IT students have a grasp of core skills even before starting university: programming and design. This represents a significant head start for the industry. To become a global hub, Malaysia must also have the same “head start”.
Computer programming is highly complex and is not (yet) a highly codified practice. Budding technopreneurs improve their skills through endless hours of practice on home computers. In my youth, one who possesses these traits was branded as a nerd. Today, the outlook on these budding technopreneurs is very different. It is an imperative that we create an army of young programmers and technicians.
My supposition is that the head start can be achieved by creating this youth ICT culture. Specifically, at least 5% of twelve-year olds with substantial access a net-based computer will become an IT programmer (it used to be 100% twenty years ago).
Industry and government should develop incentives for this culture, consisting of affordable access to development environment , peer based recognition for excellence in practice and industry internships. These measures will create hundreds of thousands of highly skilled youth workers.
Institutes of Higher Learning: Harmonising with the World’s Best
With the advent of the “dotbomb” and new waves such as bio-tech, naysayers have predicted the end of the ICT revolution. Nothing could be further than the truth. In fact, the industry is entering another metamorphosis. The arrival of new platforms such as cheap computing, wireless and wearable devices is transforming PCs, printers and mobiles into commodity products. This is the reason the stock value of major computing companies have flattened out, coupled with limited product releases.
The challenge for Malaysia is to develop and attract the talent that can commercialise new technologies and create next generation applications. However, it is imperative that the educational basics for computing and engineering reach world-class status.
World-class companies have strict talent and educational requirements: a good command of English, dependable and technical adeptness. For local institutions to be the provider of the best talent, educators need to ensure their curriculum is up to date, ensure their personnel have relevant skills, establish a rigorous examination regime and maximise actual project experience. Three measures are recommended:
• Harmonise with international institutions
• Attract the best local talent as administrators, educators and researchers
• Avail a wide range of internship opportunities
Low Cost Certified Training: The Bedrock of Competitiveness
Once in the workforce, there exists a need to ensure individuals undergo continuous training. This is due to extensive technology changes stemming from industry innovation. However, training courses are very expensive, even for employers. This is partly because qualified trainers are predominantly foreigners and there exists insufficient volume of business for trainers to reduce costs.
In order to reduce costs, an up to date forecast must be maintained by industry to show the specific training needs of the industry. In turn, both government and industry must negotiate with training content providers, primarily technology developers, to lower their prices.
However, there exist some skills which do not change over time: programming, project management and systems integration. Industry and the industry’s leaders must assemble world-class certification requirements in these basic areas. In turn, government should provide incentives for individuals to meet them.
Policies for Higher Performance and Local Advantage
Compared to multinationals, local IT companies have a harder time attracting world-class talent. To increase attractiveness, incentives must be created for local talent to join competitive local companies and invest time to build them into world-class organisations. There may also be a need to attract foreign talent and technology into local firms to capture best practices. In Korea, foreign knowledge workers employed by local firms are 100% exempted from personal tax.
Multinationals also need to ensure they have sufficient talent. As such, we must strive to ensure they are able to bring in qualified staff.
Summary
ICT continuous to be a highly innovative industry, characterised by a massive youth following. It is also uniquely unregulated, bound mainly by pseudo standards with opportunities for new players to enter the market. In order to achieve this, players need to be armed with a surplus of high quality talent.
This is achieved not only through traditional education and training. A high level of integration with industry is required comprising the following measures:
Industry Head Start
• Affordable access to development environment
• Peer based recognition for excellence in practice
• “PreU” internships
Education and Training
• Harmonise with international institutions
• Attract best local talent
• Industry Internships
• Industry wide training needs forecast
• Lower course prices
Local Advantage
• Gov’t incentives to join and build up competitive local firms
• Gov’t incentives to attract foreign talent, for limited period
In short, associations such as PIKOM, the government and leading institutions should work with leaders in the global industry to develop the above measures and make Malaysia a global hub for technology and innovation.
APPENDIX A: Policy Framework for Talent Development
Demand Drivers:
Local Companies
- Exporting IT firms
- Other IT companies
- Non-IT companies
Multinational Companies
- IT companies
- Non-IT companies
Supply Factors:
- Pre-education
- Education
- Training
- Employment Incentives
As shown above, the supposition is that the industry does not have empirical data regarding specific supply needs. A priority is to reach this determination
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