Deputy premier Abdullah Ahmad Badawi has called on local companies to change their mindset to face the challenges that globalisation will bring.

"I was reliably informed that Malaysian companies are not change-ready and are not prepared to compete in the international markets; surely we have to remedy this," he stressed.

Abdullah said this while delivering his speech entitled 'Globalisation-Challenges and Opportunities for the Malaysian Economy' at a forum in Kuala Lumpur today.

"Only through the capacity to innovate, the spirit of enterprise and the desire to go global, can we develop companies that are able to succeed on the world stage," he added.

He said that in accomplishing a competitive edge there should be no more fear of the idea of 'meritocracy'.

The issue of meritocracy arose when Prime Minister Dr Mahathir Mohamad announced July 27 that local university admissions would be based on merit starting from next year's intake.

Mahathir has also been lamenting the fact that Malay students are less competitive compared with students of other races.

Change inevitable

Abdullah also said that government assistance should be lessened so as to boost a greater level of competitiveness.

"We must strengthen our companies by reducing official support and by injecting greater competition in most sectors," Abdullah said.

At a press conference following his speech, Abdullah added that Malaysian companies have to face the reality that change is inevitable.

"They will soon realise they need to change. People are reluctant for the reason that they may have to incur some additional investment, but when globalisation hits us with its full impact we will have to adjust to survive.

"Anything that is inefficient will not survive," Abdullah said.

He also said that companies burdened by too much investment and those that are too diversified would be restructured to promote transparency.

The government is also constantly looking at ways to improve itself in terms of efficiency and productivity, he said.

"We have to continue to upgrade. We cannot be satisfied with the present level of efficiency. We have to be more and more efficient. We are not going to rest at any level.

"That is the meaning of progress," he said.

The forum was organised by law firm Skrine and Co and the Asian Strategy and Leadership Institute.