Although mean years of schooling in Malaysia is increasing, the MFP growth is not affected by it. Meanwhile, the increase of number of skilled labour in the country also did not influence the growth of MFP. Furthermore, as the country is moving forward to Industrial Revolution 4.0, it is found that the expenditure of the R&D sector is still low that has affected the growth of MFP. Therefore, the purpose of this study is to analyzenthe effect of human capital and technology on multifactor productivity (MFP) in Malaysia from the year 1990 to 2020 by using Autoregressive Distributed Lag (ARDL) method that will shows the result in long-run and short-run. The results have shown that variable R&D is significant and positively impact to MFP in long-run and short-run. Then, the variable ratio of high skill labour is found significant and positively impact the MFP in long-run but negative impact on MFP in short-run. Next, variables semi-skill labour and education has found significant and positive impact on MFP in short-run but negative on MFP in long-run. Thus, policymakers have to give more focus on the educational system in Malaysia by preparing more initiative and aids to the educational system in Malaysia. In addition, government should have giving more aids and subsidies to employer to promote training and development program which will increase the labour skills. Besides that, government also has to allocated more expenditure in research and development (R&D) where it can promote creation and innovation of new and updated technologies and also indirectly contribute to the growth of productivity in Malaysia.
