Sunday, March 30, 2008

Northeast Malaysia Forum 2008 - Mark Chang

2nd of the posts for Northeast Malaysia Forum is Mark Chang, co-founder and CEO of . There would be a total of 6 such posts (4 today and 2 tomorrow. The 2 tomorrow would be Dato' Tony Fernandes and Malik Imtiaz).

Mark talked on there are a lot of graduates, especially from IPTAs, could not get into good companies. Overseas grads are getting on average 15% higher salary than local grads, be it at fresh grad, or after 5/10 years of working.

For Singapore, statistically, there is no difference in salary between local grad and overseas grad over 5 years or 10 years.

So, this shows a gap of between local and overseas grad.

A lot of time, people might think that the structure of education in Malaysia is the reason of impacting. Actually, it is not the structure of education that matters. Our education system inherited from UK. And Singapore shared the same structure as us initially. But what is important is that the quality of lecturers/professors, who are in our university system now. And a lot of them are not as good as they should be. And they are not able to teach students as good as they should be.

In US, if you are from a very good university, you are studying using the same textbook as students from average university. So, what differentiate is the level of teaching.

Over the last 20 years or so, our lecturers in IPTA are falling behind. There are a lot of efforts needed to hire the right people to be a good administrators and professors, starting from VC and Dean.

India and China are now creating the most jobs. In Malaysia, we are more or less slow down. In the 1990s, we create a lot of jobs, but now less. But there are still a lot of new jobs created in this region, eg: Singapore. Singapore has migrated into service industry, biotech and those are creating jobs.

Malaysia, we have not yet migrating ourselves fast enough from manufacturing base to service base. Malaysia is still encouraging manufacturing to come to Malaysia. But sooner or later, manufacturing would not be competitive in Malaysia. China/Thailand/Vietnam might be much more competitive in this nature. So, for us in Malaysia, what are the jobs is important in Malaysia, would be engineering and IT-based. We still have some manufacturing that are going to be continue here for a long time. IT is a very important productivity too.

If you are a student and wants to look at what you want to study to have a good future, Biotech is going to be important in the future. IT capability that we have will help a lot for us to grow in biotech.

Education is very important to the success of our nation. A number of you who are studying in US are very lucky. Students should study very hard and gain a lot of knowledge, so that you will be useful and be competitive to be moving forward in the future. If students are just scrapping by and Bs and Cs students, then you might face difficulty.

Malaysia needs to get good profs, to make significant changes, to strengthen the curriculum and learn it. This change will take quite a long time. Students in IPTA should go out and learn a lot to prepare well for the industry. Education is very important, because from historical perspective, 100 years ago, we did not need to be well educated. That time, we needed land, as that was what we used for agricultural.

50 years ago, land was no longer that important. Machinery was the main important tool. Capital was important to buy the machinery.

Now, idea is most important, and that came from education. Education would help to solve the problem. There are a lot of VCs out there chasing after good idea. In the future, having money doesn't matter. What matters is having great idea.

Q: What is stopping Malaysia from having world class companies.
A: Without very solid education, we will not be able to have fantastic companies. We need to have blue ocean. What are the issues that are not yet solved. We need to have good education to come out with a good company. With poor education, it would be me-to education. Malaysia only has about 30 million population. So, for start up in Malaysia, to be successful, they need to branch out to regional. Malaysia who studied overseas have done a lot of start-ups, especially in US. Some of them are very highly skilled and well educated.

Instead of them coming back, they work in Silicon Valley for a few years and then started their own company.

Mark's dorm mate, started a company to sell to Netscape and sold for USD200 Million and he has started a few other companies. He has also sold another company to anti-virus company for a few hundred million. And they can have very successful start-up. So, question is where can they have very good start-up. Malaysia may not have very good market.

Like in, it is in a very niche market. is very successful on its own. Malaysiakini is pretty successful. Some might be doing very big business and some smaller business.

Reason of many people from JobStreet are from MIT, because they are his dorm mates and friends. There are some successful start-ups in Malaysia too.

Our mind divides into 2 parts. One part memorizes and another part processes thing. So, memorizing thing may not be a very bad thing. For example, we memorize multiplication system, and it helps. So, memorizing in our education system is not a bad thing.

When Mark went to US to study, in US, things are more flexible, promote more creativity and challenge more thoughts. And combine both the education system of Malaysia and US, it would be the best of both world.

We don't need to change the education system here. But we need to change the people who are running it.

A: To make changes in education system. It is beyond our individual effort. There are a lot of good professors who want to teach back here, but they are not given a chance. Our leaders need to know that there is problem here and we need to address it. Head of Universities shouldn't be appointed based on certain reason, but elected based on most qualified person. All these must be based on merit and not based on political alliance. There are still a lot of quotas which are based on various reasons. All those are no longer relevant, and as then, we can't hire the best people.

In Singapore, a lot of professors are not Singaporeans. But they can teach very well to Singaporeans. If Malaysia can have very good graduates, then other companies will continue to invest in Malaysia. Malaysia is being the choice, because of cheap labour and not quality of education.

Q: On employability of liberal arts grads
A: Philosophy/Liberal Arts majors, find it hard to get jobs in Malaysia. A lot of liberal arts students end up working through management field in companies or through sales/marketing areas, and sometimes in teaching. There might be quite restrictive in this area on prospective career. At this stage, there are limitation of career of liberal arts.

Q: Should graduates go into education industry to boost it
A: For these liberal arts students, to be in education, problem is that teachers are not being paid very well. So, there are not many who would be willing to come back and earn not much as a teacher. Teachers' salary should be paid equivalent to other fields, like engineering. So, right now, the renumeration is not attrative or competitive.

Mark explained on why we need a lot of technical peole. Foreign investors would employ a lot of people and in technical field. Foreign investments go to China/India (Eg: Bangalore) for technical fields.

Even though liberal arts are important, the technical aspects are what being competitive now. The situation now is as above.

Q: In the 1990s, Malaysia's job creation was pretty high and why is it healthy then
A: China/India not yet really open up. So, at that time, Malaysia was a very attractive place. Since then, China are opened up, and labor are much cheaper there. Vietnam is opening up. Those are more attractive areas to build manufacturing plant.

Malaysia will not be able to go back to 1990s, as now we need to have a lot of competent people, and we have not yet really move up the value chain. For examples, if we have a lot of top scale talents, then foreigners will come over and set up shop.

Q: Advice to Malaysian graduates who decide to work abroad and not come back to Malaysia
A: If come back to Malaysia, then for personal reason, it is perfectly fine. If for people who want to gain some skills, which do not have in Malaysia, then they should head up to areas like Wall Street like financial institution and they can have very good exposure.

Once they do that, they can pick up more skills and maybe get sent back to Malaysia.

Q: Why is Malaysia trying to attract FDI
A: Malaysia does not have that much skilled labors at the moment. So, we are being used for cheap labor. Ideally, we should change our value add. The main reason we are losing out to other countries is because we are no longer competitive. If we do not change, we will not be competitive in the global market.

The video conferencing turns to show the audience, and ask for a show of hand for those in liberal arts.

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