Kuala Lumpur: Malaysia’s notable rise in the IMD World Competitiveness Ranking 2025 – climbing 11 spots to 23rd out of 69 economies – should be used as a catalyst for deeper reform, according to the Federation of Malaysian Manufacturers (FMM).

According to BERNAMA News Agency, FMM president Tan Sri Soh Thian Lai stated that while the ranking is encouraging, it should not be seen as an end goal. He emphasized the need for Malaysia to transition from an input-driven growth model, which relies on labour, capital, and natural resources, to one centred on productivity and innovation to sustain long-term competitiveness.

Soh further mentioned that this transition is timely and necessary to remain competitive in high-value sectors and adapt to fast-evolving global trends. He pointed out several focus areas requiring urgent attention, including a substantial increase in investment in research and development, aligned with industry needs and national priorities.

Soh highlighted the promise held by Malaysia’s start-up ecosystem, particularly in digital, green, and deep-tech sectors. He suggested that with the right support, simplified regulations, easier access to funding, and stronger mentorship, local entrepreneurs could become powerful drivers of economic transformation.

In his statement, Soh also commended the government on the improved IMD ranking, which is the best showing since 2020. He noted that this marks a significant turnaround from the previous year, when Malaysia ranked 34th out of 67 economies. The latest result indicates that recent policy measures, institutional reforms, and efforts to restore investor confidence are delivering tangible outcomes.

Malaysia now ranks fourth globally in economic performance, moving up from eighth place last year. Additionally, both government efficiency and business efficiency have improved by eight positions.