Malaysia's Workforce Faces AI and Green Economy Transformation by 2028

Malaysia’s workforce is facing rapid changes as AI, digitalisation, and the green economy reshape industries. Over the next three to five years, around 697,000 workers across 22 sectors will feel the impact. The key to staying relevant now lies less in formal qualifications and more in the ability to adapt, upskill, and move into higher-value roles.

AI is set to disrupt jobs primarily at the task level, rather than eliminating entire roles. Instead, many positions will become 'AI-augmented', where workers collaborate with technology to improve efficiency. The shift is expected to create roughly 120 new job types, with 73% of these in critical areas like AI architecture and data science.

Sectors such as hospitality, tourism, retail, and transportation will see significant changes in the short to medium term. Meanwhile, manufacturing—particularly in oil and gas—and healthcare are also transforming. Factories are adopting robotics and Industry 4.0, while healthcare increasingly relies on digital tools and AI-driven diagnostics. Malaysia’s Technical and Vocational Education and Training (TVET) system remains vital for preparing a job-ready workforce. However, its curricula must become more flexible and update more frequently to match the pace of technological change. Institutions must also incorporate higher-value skills, including problem-solving, AI integration, and decision-making, to better equip graduates for evolving roles. Workforce development bodies play a crucial role in strengthening the national talent pool. Their upskilling, reskilling, and talent-matching programmes need to align closely with industry demands. The labour market itself must transition from a qualification-focused approach to one that assesses skills, ensuring mid-career professionals, fresh graduates, and vulnerable groups find opportunities based on their actual abilities.

The changes ahead will require workers to continuously upgrade their skills to remain competitive. With nearly 700,000 jobs affected, industries and education providers must work together to bridge skill gaps. The focus on adaptability and practical, high-value skills will determine how well Malaysia’s workforce navigates this transition.