PUTRAJAYA, Sept 10 – Selangor should shift towards higher-value economic activities while ensuring more equitable income distribution to strengthen its position as Malaysia’s economic powerhouse.
Universiti Malaya’s Institute of Asian-Europe Studies executive director Prof Datuk Dr Rajah Rasiah said Selangor should move beyond medium-value manufacturing and focus on developing industries with greater value-added potential, particularly by strengthening research and development (R&D) and the wider semiconductor ecosystem.
He said Selangor should not focus solely on areas such as integrated circuit (IC) design or advanced chip packaging, but to encourage technology to spill over into other sectors, including agriculture, automotive, mining and robotics.
“Technology proliferation should be prioritised so that advances in the semiconductor and electronics sectors can benefit a wider range of industries," he said during the sharing session, at Selangor 2027 State Budget Engagement Session at Le Meridien Hotel, Putrajaya.
Rajah cited Taiwan’s United Microelectronics Corporation (UMC) as an example, saying its approach showed how technology could be developed and applied across different economic sectors instead of focusing solely on technological competition.
He also stressed that economic development must be accompanied by efforts to reduce absolute poverty and improve the position of households earning below the median income.
“Ultimately, we need an economy that ensures more equitable distribution and avoids excessive disparities.
"On benchmarking Selangor’s economic performance, the state could compare itself with other regions and states rather than relying solely on major cities, as differences in economic structures and surrounding areas could affect comparisons," he said.
Meanwhile,Prime Minister’s Office economic adviser Nurhisham Hussein said Selangor could leverage existing Federal policies such as the New Industrial Master Plan (NIMP), National Semiconductor Strategy (NSS) and National Energy Transition Roadmap (NETR).
He also highlighted the emerging “high-altitude economy” involving drones and robotics, saying Selangor could explore opportunities in manufacturing, maintenance, repair and overhaul (MRO), as well as drone delivery.
Nurhisham also cautioned that climate change would become a major economic and development challenge, particularly for Selangor.
"The state is among three Peninsular states expected to be most affected, with risks including rising sea levels, flooding, agricultural losses, infrastructure disruption and job losses.
“Within 20 years, one million Malaysians will be affected by climate change,” he said, highlighting the need for greater urgency in preparing for its long-term economic impact.
He explained that climate adaptation could not rely solely on flood mitigation projects, with measures such as energy transition, emissions reduction and fuel subsidy rationalisation also requiring attention.
