Exploring ‘Flying Goose’ syndrome in M’sian business

THE Flying Goose syndrome also known as the Flying Geese Paradigm is a notable economic theory that originated in Japan during the 1930s. It draws a comparison between the progress of industrialisation and the flight pattern of geese.

Essentially, the theory suggests that as a leading country advances and shifts from labour-intensive industries to more technology-driven sectors, other countries in the region will follow suit, similar to how geese fly in a “V” formation. The outcome of this phenomenon can have varying effects on the business landscape in Malaysia.

The geese in flight

The economic development of East Asia was greatly influenced by Japan’s role in the Flying Goose syndrome. Japan was able to successfully shift from labour-intensive industries to high-tech manufacturing, which allowed it to become a leading goose in the region.

This transformation propelled Japan to new heights of economic success and established it as a dominant force in the area. However, this shift also created opportunities for other Asian countries like South Korea, Taiwan, and Singapore to fill the void in labour-intensive industries. These countries followed Japan’s path to development and became the next geese in flight, contributing to the remarkable economic growth and prosperity of East Asia.

This pattern continued as these geese grew and matured, eventually reaching their own levels of economic prosperity and technological advancement. As they did so, they, in turn, left behind labour-intensive industries, creating opportunities for other countries to follow suit. The concept is often likened to a relay race, where each runner passes the baton to the next, propelling the group forward.

The Malaysian business situation


Malaysia, like its Southeast Asian counterparts has been significantly impacted by the Flying Goose Syndrome.

Previously, Malaysia’s economy was heavily reliant on agriculture and natural resources, but it has since made remarkable strides in expanding its economy to encompass the manufacturing and services sectors. This shift is in line with the Flying Goose Syndrome, as Malaysia has emulated the example set by its more advanced neighbouring countries, such as Singapore.

The shift in the electronics manufacturing industry had a profound effect, particularly in Malaysia, where it emerged as a prominent recipient of the changes. The country’s strategic location and cost-effective labour force proved to be magnets for foreign investment, propelling it to become a prominent centre for semiconductor and electronics manufacturing.

As technology advanced and geese continued to migrate, Malaysia encountered fresh obstacles. Manufacturing industries that relied on labour-intensive processes began relocating to nations with even lower costs, like Vietnam and Bangladesh. This change has brought up concerns regarding Malaysia’s capacity to maintain its economic development and competitiveness in a constantly shifting global environment.

The good:

Economic growth

The Flying Goose Syndrome has undeniably contributed to Malaysia’s economic growth. By following the path set by more advanced economies, Malaysia was able to escape the trap of low-income agriculture-based economies.

Industrial diversification

The transition from agriculture to manufacturing and services has diversified Malaysia’s economy. This diversification has made the country less vulnerable to fluctuations in commodity prices.

Technological advancement

As Malaysia moved up the value chain, it acquired new technologies and skills. This technological transfer has improved the overall competency of the workforce and the country’s innovation capabilities.

Job creation

Labour-intensive industries that initially set up shop in Malaysia created job opportunities for the local population, reducing unemployment rates and raising living standards.

(Photo credit: NST)

The bad:

Economic dependence

Malaysia’s reliance on foreign direct investment (FDI) for its economic development has made it vulnerable to external economic shocks. A sudden outflow of FDI can have adverse effects on the country’s economy.

Middle-income trap

One of the challenges posed by the Flying Goose Syndrome is the risk of getting stuck in a middle-income trap. As Malaysia advances, it faces increasing competition from other countries vying for the same industries, making it harder to move up the income ladder.

Environmental concerns

The industrialisation driven by the Flying Goose Syndrome has led to environmental issues such as pollution and deforestation. Balancing economic growth with environmental sustainability is a challenge.

Ultimately, it’s understandable to have concerns about relying too heavily on foreign investment, as well as the potential for stagnation in achieving middle-income status. We also recognise the importance of prioritising environmental sustainability in all aspects of development. Let’s work together to address these challenges and find solutions that benefit everyone.

In order for Malaysia to overcome these obstacles, it is important to take a well-balanced approach. This means continuing to draw in foreign investment while also supporting local businesses and encouraging innovation. Additionally, sustainable development practices should be a top priority to guarantee long-term economic and environmental stability.

Malaysia’s experience with the Flying Goose Syndrome underscores the importance of diversifying the economy to reduce dependence on a single industry. To stay competitive in the global market, Malaysia must invest in research and development and foster a culture of innovation.

Environmental concerns should not be overlooked. Sustainable practices are essential for long-term economic and ecological health.

Moreover, Malaysia must remain adaptable and open to change as the global economic landscape continues to evolve. Regional cooperation with neighbouring countries can lead to mutually beneficial economic outcomes and increased resilience.

To sum up, the Flying Goose syndrome has had a significant impact on Malaysia’s economy. However, the country’s success on the global stage depends on its ability to manage challenges and seize opportunities. By striking a balance between economic growth, sustainability, and innovation, Malaysia can continue to thrive alongside other global players in the dynamic business landscape. – Oct 14, 2023


Dr Ahmad Zaharuddin Sani Sabri is a former director at the Institute of Tun Dr Mahathir Thoughts.

The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.


Main photo credit: ABC News

Subscribe and get top news delivered to your Inbox everyday for FREE