Research, Development and Commercialization in Malaysia

By Shukri Ab. Wahab & Tuck Y. Chin Academy of Sciences Malaysia

Presentation
Introduction
Country Profile RD&C

RD & C Malaysias Perspective

Before Independence, 1957 Early Independence, 1957 1970s Era of the 1970s 1990s Era of the 21st century

Measures to Enhance RD&C Eco-Systems Conclusion

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Malaysia and the World

Malaysia and its Adjacent Territories

Country profile
Land Area (mil ha) Region Peninsular Malaysia Sabah Sarawak Malaysia Area 13.16 (40%) 7.37 (22%) 12.44 (38%) 32.97(100%)
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Climate
Hot-Wet Tropical Climate
- High Temperatures, averaging 32 C (Day) and 22 C (Night), all year round Seasonal Monsoon Rain North East (Nov Feb) and South West (June - Aug), but lately less predictable Heavy Rainfall averaging 2,540 mm ( Max of 5,080 mm and Minimum of 1,650 mm)

High Humidity (70% to 98%)

Sky lots of sunshine but cloudy in the evening especially during the monsoon months
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Natural Resources
Petroleum
Copper Iron Ore Timber
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Natural Gas

Tin

Bauxite

Governance
Parliamentary Democracy with a Constitutional Monarch Parliament comprises of Senate (70 members) and House of Representatives (222 members) Parliamentary Election held every 5 years. Members of the House of Representatives elect the Prime Minister

People (2008)
2006 Population (million) Labor force (million) Employment (000) 26.6 11.5 11,144 2008 27.3 12.0 11,600

Unemployment rate (%)

Literacy rate (%)

3.5
95.1

3.2
95.1
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Economy (2008)
Criteria
GDP (current prices) (RM million) GDP (constant prices) (RM million) Real GDP growth rate (%) GNI per capital (RM) Inflation rate (% ) Merchandise exports (RM billion) Merchandise imports (RM billion) Exchange rate (RM/US$)

2006
572,555 474,392 5.9 20,841 3.6 588,966 480,773 3.668

2008
699,706 531,949 5.5 24,651 3.7 326,897 259,311 3.266
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Socio-Economic Status of Malaysia versus Selected Middle and Higher Income Countries
Global Malaysia Singapore Thailand Indonesia Sweden South Korea Population living in urban (%) Adult literacy

50 81 0.73

70 92 0.82

100 94 0.94

33 94 0.78

52 92 0.73

85 NA 0.96

81 NA 0.93

rate (2000-2007)
Human

development
index (2007 value) * GNP per capita (PPP int.$)

10,290

13,740

47,940

5,990

3,830

38,180

28,120 11

RD&C -Introduction
RD & C
Basic Research; classified into Pure Basic Research ( Fundamental Understanding ) and Use-Inspired Basic Research ( Fundamental Understanding motivated by a question of use ) Applied Research; classified into Pure Applied Research ( motivated by use but not seeking fundamental understanding ) and Applied Research ( Applied Research not motivated by practical goal )

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 Commercialization The application and transfer of R&D ( knowledge, technology, patents, trade secrets, R&D outputs, etc.) into a practical use Innovation is a process, driving ideas to market through RD & C ( outputs in a form new product, process or service )
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Contd.

Transition from R to D involves Knowledge and Technology Transfer Transition from R&D to C involves the application and transfer of R&D outputs into business (market). Very often not smooth and fraught with problems
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Contd.
In Development Ideas with substantial business potential is identified Need to invest in research & technology development Adapt to market needs ( market driven ) and/ or technology ( technology driven ) Commercialisation Introduction of new technology or knowledge to market by way of a spin-off or licensing 15 deal

Contd.

To address the complexity of RD&C We need to bring in the stakeholders:

Researchers Transfer Officers Technology Transfer Professionals/Technocrat Investors/Entrepreneur

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Contd.

Technology Commercialisation in Malaysia

Best to View it from the Four Eras
Before Independence, 1957 Early Independence, 1957 1970s Era of the 1970s 1990s Era of the 21st century
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Contd.

RD&C in Malaysia
RD&C Contribution to the Countrys Economic Growth Facing the Challenges Ahead Complementing the Countrys Goal of Becoming a High Income Nation by 2020

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RD&C - Malaysia
Malaysia was once a British Colony and gained independent 53 years ago ( 1957 ) Relatively young as compared to Iran The economy was structured to provide raw commodities for the colonial master Low value added Industries mainly in Agriculture, Mining & Timber Extraction Research was rudimentary, headed and directed by the colonial master

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Before Independence, 1957

Several Research Institutions were established Institute of Medical Research, 1901 To address the Hazards caused by Tropical Diseases (Malaria) Agriculture Department, 1905 To quicken the pace of Agriculture Productions and 20 Exports for Masters Home Country

Contd.
Forest Research Institute, 1926 Timber Extraction and Export Rubber Research Institute, 1926 To up-scale the Fledging Rubber Industry/Plantation
Some good break-through R&Ds were undertaken Rubber remained a top Revenue Earner

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Early Independence , 19571970s

Import Substitution Industrialisation(ISI)
Nurtured the development of the Local Manufacturers

Measures to Protect the Local Manufacturers include: Imposition of import tariffs Offered of subsidised industrial credit, and Micro-financing the foreign exchange

Led the creation of the Industrial Class

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Contd.
Merchant Class (from the colonial era) took on joint-venture and technological tie-ups with the West and Japanese Industrialists and to adapt them to the domestic context

Development of a healthy and competitive framework between the Industrial and the Merchant Classes
Spurred the Countrys Economic Growth

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Contd.
R&D focussed more on basic research & data collection:

Study on Soil &Weather Pattern Plants and Animals Breeding Natural Resources Development and Management Strengthening Research Institutions Agriculture - Malaysian Agriculture Research and Development Institute ( MARDI ) Forest - Forest Research Institution of Malaysia ( FRIM ) Rubber Rubber Research of Malaysia ( RRIM ), re-named Malaysian Rubber Board ( MRB ) Oil Palm Establishment of Palm Oil Research Institution (PORIM), but later re-named as the Palm Oil Board (MPOB) Cocoa Malaysian Cocoa Board ( MCB ) 24

Era of the 1970s 1990s

Export Orientated Industrialisation(EOI) Attracting FDI - Multi-National Companies (MNCs)
Attractive Investment Allowance Generous Tax Incentives Conducive working Environment in the many newly established Industrial Estates
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Contd.

Early economic success comes in the E&E Sectors from MNCs: Texas Instruments Motorola Carters Semi-Conductors Malaysias role as an E&E out-sourcing centre was primed
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Contd.

MNCs experiencing Huge Cost Savings from the Use of Malaysian Labour and Facilities

Attracting more MNCs into Malaysia

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Contd.

Benefits from Export Oriented Industrialisation (EOI):

Met the requirements of economic growth Generate substantial foreign exchange More efficient than ISI in creating employment Catalyse the Evolvement of the SMEs
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Contd.

Drawbacks from EOI: EOI comprised mainly of the lower value-added products MNCs keeping much of its major R&D at home

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R & D Expenditure by Type of Research

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Era of the 21st Century

Cutting-Edge Technologies
Biotechnology Nanotechnology Green technology

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Contd.

Knowledge which binds all these new technologies together Experience showed that countries that grow rich, not necessarily well endowed with natural resources, but those invest in RD&C and HRD E.g. Japan, Singapore, S. Korea
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Contd.
Malaysia needs an economy where Science, Technology and Engineering (STE) are integrated into the production processes; where innovation, creativity, knowledge and design capability are embodied into educated skilled workforce i.e. Source of National Prosperity and Wealth Vision 2020 and the New Economic Model premised on Malaysia becoming a High Income Country by 2020 (GDP US$ 15,000/ yr) from the current US$ 7,560/year 33

Contd.
Quantum Leap cannot be based on : Low Cost Low Technology Mass Production

But Driven by: Cutting Edge Technology Backed by a strong R&D Innovation Appropriate Technology
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Contd.

Current R&D (9th MP) spending at 0.67% of GDP is too low Set to improve to 1-2% in the near term, 10th Malaysia Plan (2011-2015), and perhaps up to 3-5% in the medium and long terms Comparison with selected Countries

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Contd.
R & D Expenditure in some High Income Countries

Country Malaysia Sweden Japan S. Korea U.S.A. Taiwan Singapore Australia Ireland

R & D Expenditure : %GDP 0.67 3.70 3.32 3.22 2.61 2.58 2.31 1.84 1.32

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Contd.

Target of RSE (2010) : 50 / 10 ,000 workers Currently : 17.9 /10,000 workers

Poor in Comparison to: South Korea 89.8 /10,000 workers Singapore 103 /10,000 workers
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Contd.

To Address RSE Shortfall: National Brain Gain Programme Brain Circulation Programme Establishment of the Talent Corporation

Industrial PhD Program

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RD&C Capacity Development

Contd.

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Contd.

Malaysias Contribution to RD&C is still low as reflected by: Number of Papers published Number of Patents produced

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Contd.
Contribution of Malaysian Scientists in International Journals by Malaysian Plan

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Contd.
Patent Registered
Year
2007 2005 2003 2001 1999 1997 1995

Resident
338 37 31 18 39 52 29

Non-Resident
6,646 2,323 1,547 1,452 682 737 1,724

Total
6,984 2,360 1,578 1,470 721 789 1,753
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Contd.

10th Malaysia Plan (2011-2015) Emphasis on Science, Technology and Innovation to drive the Countrys Economic Growth. RD&C has a crucial role in the Countrys Development Programme

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Contd.
Measures to Enhance Malaysias RD&C Eco-System
1. Establishment of the National Science Research Council (NSRC)
Mandated to provide Advice, Set Priorities and Streamline RD&C

2. Establishment of Institutional Infrastructures - MDeC, MIMOS, BiOCorp, etc.

Tasked with infusion of technology across all economic sectors in driving productivity and innovation, ICT empowerment, development of the architecture for a National Innovative Digital Economic Framework,etc.

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Contd.
3. Establishment of Unit Innovasi Khas (UNIK) and Malaysia Innovation Centre (NIC) UNIK is tasked with: Identifying Solutions to Address Gaps in the Innovation (which is often equate with Invention and Technology) Ecosystem What Works in other Countries may not Work in Malaysia What Works There need to Adapt and Modify Will drive the Strategies and Policies with regards to Innovation

NIC will be the implementation arm of UNIK

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Contd.

4. Establishment of Malaysia Industry Government Group for High Technology (MIGHT)

Guiding Foresight Studies for High Technology Industry Development Nurturing Techno-Business Innovation Developing Capability for High Technology Industry
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Measures to Enhance Dev. of RD&C in Malaysia

1. Increasing Investments in RD&C
To increase R&D Allocation to Advance STI to at least 3% of GDP
To remain competitive To Stimulate Innovation and Generate Economic Growth

Increase R&D Allocation to be drawn from (a) Public Sector (b) Private Sector and, (c) Foreign Investments

Supportive institutional, regulatory and financial framework including fiscal and tax incentives
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Contd.

2. Networking Between RIs/RUs & Industry

Universities and Research Institutions needs are line with those of the Industry Industry to benefit from the Research Outputs in the form of Innovative Solutions, Increase Productivity and Development of New Businesses

Attachment Programme between Academia and the Industry and vice versa
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Contd.

3. Facilities and Financing for Innovative Ventures

Dedicated Financing Adopt the Proof of Concept Framework Funding on the basis of :Good: Research Ideas rather than on the basis of Commercialisation of Scientific Breakthrough New Arrangement allows Researchers and Businesses to work together more closely to generate Licensing Deals
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Contd.

4. Establishment of the National Science Research Council (NSRC)

Mandated to provide Advice, Set Priorities and Streamline RD&C

Minimising Duplication, Overlap and Inefficiencies

Driving Convergence

Monitoring the Countrys Knowledge, technology and Innovation, and product portfolios
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Contd.

5. Enhancing Knowledge, Education and Human Capital Development

Knowledge and Creation Need to be Nurtured in the Education System Science for All Approach Life Long Learning (LLL)

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Contd.

6. Facilities and Financing for Innovative Ventures

Dedicated Financing Adopt the Proof of Concept Framework Funding on the basis of Good Research Ideas and Commercialisation of Scientific Breakthrough New Arrangement allows Researchers and Businesses to work together more closely to generate Licensing Deals
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Conclusion
Malaysia has the capacity and capability to capitalise on RD&C opportunities derived from science, engineering and technology to generate economic growth necessary to fulfil the countrys aspiration of achieving the status of a high income country by 2020.

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THANK YOU

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