Malaysia Productivity Corporation: firms' AI spending yet to lift productivity much
The Malaysia Productivity Corporation has found that AI spending by Malaysian firms has yet to bring meaningful productivity gains. According to The Edge, its study of 57 manufacturing firms in the Productivity Report 2026 showed only a weak relationship between AI-related investment and labour productivity.
Key points
- Fewer than 30% of firms reported a high level of readiness to integrate AI effectively.
- Nearly three-quarters reported some improvement, particularly in compliance, customer engagement and innovation.
- The agency said the payoff depends on redesigning workflows, strengthening data systems, building skills and improving management.
- It recommended an AI productivity research network linking government, universities and industry.
Why it matters for Malaysia
The finding is a caution against treating AI purchases as progress in themselves. It moves the policy question from how many firms adopt AI to whether they change how they work.
Questions answered
- Why has AI spending not raised productivity in Malaysian firms?
- The Malaysia Productivity Corporation said adoption alone is not enough. Firms may add cost and complexity if they introduce AI while keeping old processes, fragmented data and existing layers of approval.
- Is the report saying AI does not work?
- No. The agency said this is not evidence that AI is ineffective. Nearly three-quarters of firms surveyed reported some improvement, especially in compliance, customer engagement and innovation.