2. Elaborate on five problems faced by firms in the industrial sector. There are various challenges faced and still facing by the Industrial sector. Some of the most important challenges faced are as follows Dynamic changes in the government regulations and policies. The Malaysian government has created many import substituting policies by providing innovative ideas for promoting industries. Random evolution in the technology and innovation in the industries The Malaysian government has taken considered Asian north east economies as model for economic development. Non static import and export policies and continues changes in taxation policies Various tax relief policies were implemented by the Malaysian government to stimulate the development in industrial sector. Behavioural changes in the customers . Global deflation in the economy. Weak symbiotic relationship between heavy industries and SMEsIncreasing production costs. The increasing production costs include the costs such as wages cost. raw material costs and transport costs will decrease the profitability of the firm. Therefore, the firms in the industrial sector may have financial problems as they could not afford to pay all costs especially wages and salaries of workers. Dependence on foreign labour. In Malaysia, most of the workers especially in industrial sector, are foreign workers from Indonesia and Philippines. As the demand of workers have increased, the population of Malaysian cannot afford the number of workers needed in the industrial sector. It is cheaper to employ foreign workers compared with local workers, this will save the costs of the employers. Although this benefits the employers. the foreign workers do not have enough constructing experience. Thus, it will produce a poor-quality construction and low productivity. Intense competition from low-cost producers in emerging economiesLack of extensive research and development (R&D)