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Only a few European economies and Korea and Taiwan Province of China reached high-income status during 1970-2010. Malaysia’s real income per capita increased to 26 percent of the U.S. level in 2010 from 20 percent in 1970. Despite relatively strong growth and a substantial improvement in export sophistication, Malaysia’s total factor productivity lagged behind that of Korea and Taiwan Province of China. We argue that what characterizes their experience in contrast to Malaysia’s is the creation of technologies by domestic firms and a push to leapfrog to the technological frontier at an early stage of development.

Economic development -- Malaysia. --- Economic development. --- Exports -- Malaysia. --- Industrial productivity -- Malaysia. --- Exports and Imports --- Macroeconomics --- Industries: Manufacturing --- Production and Operations Management --- Industrialization --- Manufacturing and Service Industries --- Choice of Technology --- Industrial Policy --- Technological Change: Government Policy --- Economic Growth and Aggregate Productivity: General --- Economywide Country Studies: Asia including Middle East --- Trade: General --- Innovation --- Research and Development --- Technological Change --- Intellectual Property Rights: General --- Macroeconomics: Production --- Aggregate Factor Income Distribution --- Industry Studies: Manufacturing: General --- International economics --- Technology --- general issues --- Manufacturing industries --- Exports --- Productivity --- Income --- Manufacturing --- International trade --- Production --- National accounts --- Economic sectors --- Industrial productivity --- Taiwan Province of China --- General issues