Malaysia economy is in a strong position, after recovering from economic crisis and is expected to have a higher but moderate growth in gross domestic product (GDP). The economies of Malaysia were transformed from semi-subsistence agricultural into peripheral economies, specialising in mineral and agricultural production and timber .
In the late twentieth century the Malaysian economy is well advanced towards industrialisation. The achievement of fully industrialised economy planned by government (Vision 2020) still lies some considerably way head and now with the society becoming much more sophisticated and with the challenge of globalization, Malaysia is heading its way to the new economy after the third industrial revolution. .
1. Paradigm shift from the P-based economy to the K-based economy.
In the road towards new economy, the government has implemented the Knowledged-based Economy Master Plan, in September 2002. " The central mission of Malaysia's Strategic Initiative One of the Tweedy-first Century is to ensure that Malaysia make the paradigm shift from production-based economy (P-Economy) to knowledge-based economy (K-Economy)-(Noordin Sopiee,2002). The seven strategic thrusts focus on areas that are salient for transformation to the new economy encompassing and cultivate human resource development, institutional framework, info-structure and infrastructure, science and technology capacity, role in private sector, ensure the develop of K-based civil service as well as bridging the knowledge and digital divides. Shifting the economy patterns to K-based economy does not means Malaysia leaving the production or manufacturing sector, since Malaysia is an industrialised country in Asia and the manufacturing sector were contributed more than 30% of the GDP growth. .
2. Challengers, Opportunity and Initiatives towards New Economy.
2.1 K based-Economy.
Rapidly developments in technology, particularly information and communications technology (ICT) brought in the third wave of growth, which centres on the resourceful use of knowledge to create new value, wealth and economic growth.