Technical efficiency, technical change and demand for skills in Malaysian food-based industry

Rahmah Ismail

Research output: Contribution to journalArticle

9 Citations (Scopus)

Abstract

The contribution of food-based industry to Malaysian manufacturing output growth is becoming more important and relevant. The vision of the government to achieve the status of industrialized nation by the year 2020 and to make Malaysia as a halal food-hub has provided an opportunity for the food-based industry to expand further. In order to sustain its development, the food-based industry must be kept competitive and this is very much associated with its efficiency and technological adoption. However, it is always hypothesized that a more advanced technology will increase the demand for skilled-workers and the demand for unskilled-workers will decrease. This article aims to analyze technical efficiency change and technical change for the food-based industry and examines to what extent technical change affects the demand for skills for this industry. Analysis is based on the Manufacturing Survey Data of 1985-2003 at five digits Malaysian Standard Industrial Code (MSIC). The analysis involves two steps; firstly, the use of Data Envelopment Analysis (DEA) Malmquist index to derive technical efficiency change and technical change. Secondly, the estimate of labour demand model using technical change from the first estimation as one of the independent variables. The result from this study shows that technical efficiency change in the food-based industry is still low. Technical change has a significant negative effect on the demand for technical and supervisory workers; and the production workers, but the professional workers are not significantly affected. Therefore, high technology may lead to higher unemployment among the unskilled workers and most unlikely to reduce unemployment rate among the skilled workers who are mostly degree holders.

Original languageEnglish
Pages (from-to)504-515
Number of pages12
JournalEuropean Journal of Social Sciences
Volume9
Issue number3
Publication statusPublished - Sep 2009

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food
efficiency
industry
demand
unskilled worker
skilled worker
worker
manufacturing
labor demand
high technology
unemployment rate
Malaysia
unemployment
data analysis

Keywords

  • Demand for skills
  • Food-based industry
  • Technical change
  • Technical efficiency change
  • Total factor productivity growth

ASJC Scopus subject areas

  • Social Sciences(all)

Cite this

Technical efficiency, technical change and demand for skills in Malaysian food-based industry. / Ismail, Rahmah.

In: European Journal of Social Sciences, Vol. 9, No. 3, 09.2009, p. 504-515.

Research output: Contribution to journalArticle

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