Based on the Global Competitiveness Report 2011, Malaysia is ranked at 26. For the past three years, Malaysia's rank has dropped from 21 to 26.

This is something that we need to look into seriously. The report highlighted that we still need to improve in terms of education and technology readiness.

To enhance Malaysia' competitiveness, standards plays pivotal role and serves as an important tool in industry, commerce and trade.

The increase of globalisation and movement of goods from one economy to another has increased the need to have standards.

However different countries may require different standards and manufacturers must create variations in products and services to meet the different market demand.

This situation at times has put economies in a challenging situation and in order to reduce barriers to trade, international standards have been developed so that it can be used throughout the world.

In order to improve the supply chain and create demand in the international market, testing facilities, and R&D plays an imperative role to drive this further.

Goods produced by Malaysia must comply with high standards, possess good quality and most importantly not compromising safety of end consumers.

In order to do that, we need to improve facilities and technologies among the accredited laboratories in Malaysia and develop more R&D laboratories to address safety issues.

The Budget 2012 unfortunately did not emphasise in developing lab facilities.

The SME's forms 99.5 percent of business entities in Malaysia and some of them form a bigger supply chain in Malaysia.

To help these industries, it important to develop standards and guidelines so that their products meet international market expectations and one way to do this is to facilitate compliance with conformity assessment requirements.

By having well equipped labs, it also provides a platform for SME's to be more innovative in creating products to meet different consumer and environmental demands.

Examples of new emerging technologies that pose potential safety risks but not thoroughly researched are nanotechnology and biotechnology.

Though these technologies experience increasing demand in the international market, there are a lot of gaps in safety data, research and clinical studies to prove that it is 100 percent safe when applied to consumer and the environment.

In order to initiate standards, policy or regulation with regards to goods, the capability of laboratories to conduct test and risk assessment is very important.

If our local laboratories are equipped with sufficient technology and testing facilities, it can help the local industries to produce high quality products and comply with the relevant Malaysian standard which are mostly aligned to international standards.

This will enhance trade facilitation and provides easy access to world markets.

For the past few years, there is a growing demand for "green" products and services.

In the field of green technology, the Budget 2012 also lacks allocation and incentives to promote human resource capacity building to support green technology development - for example development of standards for green certification of products and services, incentives to increase affordability of green products, testing laboratories for green product certification and again, R&D into green products such as life cycle analysis.

While there was mention of an innovation fund, it does not specifically support green innovations and methodologies in pursuing green economic activities.

To move forward and to ensure that Malaysia does not fall further down in global competitiveness, it is important to ensure that we are on par with developed countries and more allocation and importance need to be given in developing testing and research facilities and development of standards in new and emerging areas.

By doing so, it can create broader market, foster economic growth, and at the same time promote sustainability.

MOHANA PRIYA is senior manager, product safety and social responsibility compliance, at the Malaysian Association of Standards Users.