Deputy minister says automation will upgrade workers to higher-skilled roles, not cause job losses, as Malaysia targets 3,000 companies for transition.
KUALA LUMPUR: Malaysia must reduce its heavy reliance on foreign labour by accelerating automation in the industrial and manufacturing sectors, said Deputy Investment, Trade and Industry Minister, Sim Tze Tzin.
He said many industries remain overly dependent on foreign workers, preventing them from moving up the value chain and becoming more competitive globally.
“Malaysia relies too heavily on foreign workers, and if we continue to rely on foreign workers and keep everything manual, we will fall behind,” he told reporters after launching the METALTECH & AUTOMEX Exhibition 2026 here today.
Sim added that automation will not lead to job losses among Malaysians, but instead help move the workforce into higher-skilled and better-paying roles.
“Many people fear that workers will lose their jobs due to automation, but that is certainly not the case.
“If a factory transitions to automation, workers will be upgraded from operators to technicians, gaining new knowledge and getting higher wages,” he said.
He also said that automation has become critical as industries face rapid technological changes and rising costs in line with the country’s transition to a high-income economy.
Sim noted that Malaysia is currently facing two major shifts, namely the rapid pace of technological advancement and increasing cost pressures as wages rise, making the adoption of automation essential to sustaining industrial growth.
He said that the government is pushing for greater adoption of automation, particularly among small and medium enterprises (SMEs), to improve efficiency, precision and long-term competitiveness.
He added that the government is targeting 3,000 companies to transition from manual processes to automation, supported by matching grants and financing facilities.
“These matching grants can go up to RM20 million for large factories, while Malaysian Industrial Development Finance Bhd (MIDF) offers low-interest financing for automation and modernisation, and EXIM Bank provides facilities to help companies digitise operations and protect exports,” he said.
