Technology Development: The Diffusion of Micro-electronic Industrial Machinery in Malaysia

The era of the late 1970s and early 1980s witnessed significant advances in the use of micro-electronic (ME) industrial machinery. Further, with increasing research on artificial intelligence, there now exist micro- processors that can perfonn some functions of human being, such as flexible manufacturing for small size jobs. As result of these industrial advancement, processes such as electronic component assembly and garment manufacturing which had been the traditional hallmarks of labor-intensive operations have now become highly capital and skilled labor-intensive with equipments (such as robots) gradually replacing labor. Consequently, many multinational corporations (MNCS) now find it much harder to justify using offshore plants located in low wage countries for the supply of intennediate inputs. This, together with stagnant market conditions have led to significant cutbacks in the scale of operations of many multinational electronic and textile plants in Third World countries including those in the Association of South East Asian Nations (ASEAN). Malaysia, in panicular, has experienced theclosing down of many electronic plants since 1985, leading to retrenchment of thousands of electronic workers. In this situation advancements and changes in industrial equipment, especially those involving the substitution of ME machinery for labor, therefore have profound impact on the Malaysian economy.