Malaysian manufacturers must accelerate automation as the government moves to cut foreign workers to 10% of the national workforce by 2030, Deputy Investment, Trade and Industry Minister Sim Tze Tzin said.
Sim highlighted that foreign workers currently account for about 13% of Malaysia’s workforce, after the government gradually lowered the quota from around 20% previously to 15%.
Sim said the phased approach gives businesses time to adjust, but the shift towards automation remains too slow.
“Start doing it now. Do not wait until 2030,” he said as easy access to foreign labour could discourage companies from investing in automation and upgrading manufacturing processes, limiting productivity improvements and Malaysia’s ability to move into higher-value activities.
At the same time, he emphasised that manufacturers need to raise productivity, workforce skills and economic complexity if Malaysia is to move beyond its long-standing middle-income position.
Automation, he said, would allow factories to operate with fewer workers while shifting remaining jobs towards higher-skilled roles that could support better wages.
Malaysia is also targeting 3,000 smart factories by 2030 under the New Industrial Master Plan, although only 93 companies had completed the transformation as of mid-2026, with another 161 expected to do so by year-end.
