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Understanding Malaysia's Innovation System SOUTH EAST ASIA Malaysia UNDERSTANDING MALAYSIA’S INNOVATION SYSTEM TABLE OF CONTENTS 5 1. COUNTRY PROFILE 6 1.1. Introduction 7 1.2. Key innovation numbers 8 1.3. Highlights of key innovation programme 0 1.4. Timeline of innovation policies and initiatives 10 1.5. Institutional maps 10 1.5.1. Institutional map of the innovation system (box diagram) 11 1.5.2. Role and influence diagram of key ministries and agencies (target diagram) 12 1.6. Glossary of institutional abbreviations and acronyms 13 1.7. Strengths and weaknesses analysis 18 2. CAPACITY BUILDING FOR INNOVATION IN MALAYSIA 19 2.1. Understanding the range and spread of Malaysia’s innovation policymakers 20 2.2. Innovation policymaker maps 21 2.3. Innovation policymaker ‘personas’ 23 3. ASSESSMENTS OF CURRENT AVAILABLE RANGE OF SUPPORT AND TRAINING FOR INNOVATION POLICYMAKERS IN MALAYSIA * This report should be referenced as follows: Alpha 25 4. ASSESSMENT OF LIKELY AREAS OF FOCUS FOR A GLOBAL Catalyst Consulting and Nesta (2019) Understanding INNOVATION POLICY ACCELERATOR TEAM FROM MALAYSIA Malaysia’s innovation system. 27 5. DIAGNOSIS AND RECOMMENDATIONS · Content and research: Dr Suraya Sulaiman, Azim Pawanchik (Alpha Catalyst Consulting) · Design: Priscila Vanneuville 29 6. BIBLIOGRAPHY Disclaimer: Information and data was collected in March 2018. Parts of this report might have since been subject 33 7. INTERVIEWEES to changes. The 2018 elections notably brought consequential changes to the information shown on page 10 and 11. 5 1. COUNTRY PROFILE <— table of contents 6 Malaysia has undergone a remarkable growth journey, community, while YIM looked at how innovation could be COUNTRY PROFILE transitioning from a country dependent on primary inclusive from the citizens’ perspective. commodities, to manufacturing and heavy industrialisation, and the present knowledge and The focus on entrepreneurship led to a disbursement of 1.1 innovation-driven economy. Having rebounded from the RM5.88 billion by the various ministries and agencies, for INTRODUCTION earlier economic crisis, by 2014 the country had achieved SMEs and startup development.5 This covered human a gross national income (GNI) per capita of US$11,0001, capital development, access to funding, providing market just 11 per cent short of the high income threshold. In access, innovation and technology adoption and 2017, within a year, the World Bank revised the GDP infrastructure development. growth forecast from 4.5 per cent to 5.2 per cent.2 Central to this growth was the emphasis on innovation as However, all these efforts towards propelling Malaysia to a core driving factor for the economy. Critical to the being an innovation-led economy resulted in overlapping aforementioned turning point was the declaration of initiatives and policies. There were 81 national policies of Malaysia’s Innovation Year3 in 2010, which set off a series which 56 were related to science, technology and of activities which formed the nucleus of Malaysia’s innovation (ST&I), with 458 agencies promoting or economic progress. implementing them. These agencies and institutions were not working collaboratively and were often seen While innovation was not unknown in Malaysia, its growth competing among each other. This was counterproductive in importance in the following years meant that its scope in fully harnessing Malaysia’s ST&I potential. The main widened beyond the limits of science and technology. reasons for implementation weakness were the insufficient Agensi Inovasi Malaysia (AIM) was set up as a statutory political will and legislative drive to address ST&I issues, body, overseen by the Prime Minister and seven ministers, absence of an overarching ST&I master plan and most from education to finance and trade, with members from importantly, failure to converge ST&I with economics and academia, the corporate sector and government finance, geopolitics as well as society and culture.6 agencies. AIM leads the development of Malaysia’s innovation ecosystem4 through multiple initiatives from Over the past two and a half decades, a key driving force supporting the development of mid-tier and large in Malaysia’s transformation was Vision 2020, which 1. The World Bank, 2017a. 2. Ragananthini, V., 2017. corporate organisations, strengthening the industry- outlined how it would be a developed nation by 2020. 3. The World Bank, 2010. academia collaboration, social innovation and inculcating The Government had put in place numerous programmes, 4. Agensi Innovasi Malaysia (AIM), 2017. a culture of innovation. This was in addition to the work the latest being the 11th Malaysia Plan and National 5. Xavier, S.R., Sidin, S.M., Guelich, U., Nawangpalupi, C., 7 2016. that MIGHT and MOSTI were doing, which had a stronger Transformation Policy. As the future of Vision 2020 began 6. Academy of Sciences Malaysia, 2015. technology focus. To ensure a comprehensive approach to be uncertain, in 2017, the Government launched 7. The Star Online, 2017a. towards innovation, other institutions such as MaGIC and ‘Transformasi Nasional 2050’ or TN50 as a strategic plan 8. Transformasi Nasional 2050, 2018. TERAJU were set up to boost the entrepreneur for the future of Malaysia in the period 2020 to 2050.8 <— table of contents 7 COUNTRY PROFILE 1.2 KEY INDICATOR MALAYSIA INNOVATION Global Innovation Index Rank (2017) 37/1288 NUMBERS Global competitiveness index (2016-2017) 25/1382 R&D gross domestic expenditure as % of GDP (latest 1,26 available) (OECD, including company spending) High-Tech exports, in % of manufactures exports (2015, 42,80% Worldbank) Patents per million people (2016) 45 (2014)4 2299 patents 30.33mln population(2015) = 75.801 2636 (2016(6)) – population 31.19 million7 = 84.5 Per cent growth in total patent applications between 46,81 (2001-2015) Time in hours required to start a business 18.5 days 5 (18 days for men, 19 days for women) Percentage of the 18-64 population who believe they Slightly above 25%3 have the right/skills/knowledge to start a business 1. World Intellectual Property Organization, 2017. 2. WEF, 2016. 3. GEM, 2016. 4. UN Data, 2018. 5. World Bank, 2017b. 6. MyIPO, 2016. 7. World Bank, 2016. 8. Global Innovation Index, 2017. <— table of contents 8 COUNTRY PROFILE TN50 – TRANSFORMASI NASIONAL 2020 HIGH IMPACT PROGRAMME 2 (HIP2) One of Malaysia’s goals is to become a high income A collaborative effort between SME Corp and AIM, country by 2020. Through TN50 they attempt to design an end-to-end innovation and commercialisation 1.3 a future shaped by the people, where any citizen of facilitation platform, it aims to remove market and Malaysia can join in a discussion or share his/her vision financing barriers to innovation. (http://www. HIGHLIGHTS OF for the upcoming 30 years after 2020. The topics platcomventures.com/HIP2-@-High_Impact_ discussed include society, the environment, the Programme_2.aspx) KEY economy, technology and connectivity, and INNOVATION governance. The Government engaged almost two million Malaysian youths to gather over 60,000 projects LAUNCH OF DFTZ (DIGITAL FREE TRADE ZONE) PROGRAMMES for possible implementation. (https://mytn50.com/) Malaysia launched the world’s first Digital Free Trade Zone (DFTZ) which is expected to double the growth rate of SMEs’ goods export, increase overall goods MAGIC CER CIRCLE export by US$25 billion, and create 60,000 jobs by MaGIC CER Circle is a national initiative to facilitate 2025. With DFTZ, the contribution of Malaysia’s digital greater corporate and private sector involvement in economy to the GDP is expected to exceed the 20 entrepreneurship development across Malaysia. It per cent target by 2020 from the current 17 per cent. aims to connect corporates and startup communities https://mdec.my/news/malaysia-launches-worlds-first- and help them capitalise on disruptive technologies digital-free-trade-zone and build a continuous innovation pipeline through partnerships. The platform connects some of the biggest corporations across various industries with startup communities. (https://mymagic.my/programs/) NATIONAL CORPORATE INNOVATION INDEX (NCII) The NCII was an initiative of the National Innovation Agency (AIM) to drive innovation within the corporate sector. Suitable for SMEs and large corporates it set 32 areas of innovation, such as innovation process, risk, leadership, level of collaboration, impact of innovation and many others. (http://www.ncii.my/) <— table of contents 9 COUNTRY PROFILE 2010 ECONOMIC TRANSFORMATION PROGRAM NATIONAL INNOVATION STRATEGY This programme implemented the New An inclusive plan to promote innovation as a key Economic Model (NEM) by identifying National component towards achieving Vision 2020. It had 1.4 Key Economic Areas (NKEAs) and six strategic three main thrusts; nurturing skills and providing reform initiatives. capital; enable more innovation through platforms TIMELINE OF and collaboration, and thirdly, streamlining PRI research and nurturing high potential firms INNOVATION towards global penetration. POLICIES AND 2011 TENTH MALAYSIA PLAN DIGITAL MALAYSIA INITIATIVES The Tenth Malaysia Plan contains the aspirations An initiative to build an ecosystem that promotes of both the Government Transformation the use of ICT in all aspects of the economy, to Programme and the New Economic Model, create globally connected communities which based on high income, inclusiveness and interact in real-time. sustainability, and includes new policy strategies and programmes that will enable the country to develop as a high income nation. 2013 SCIENCE TO ACTION (S2A) NATIONAL SCIENCE, TECHNOLOGY AND The Science to Action (S2A) initiative aims to INNOVATION POLICY (NSTIP) translate the broad policy framework of the The National Science, Technology and National Science, Technology and Innovation Innovation Policy provides a framework for Policy into specific action measures. improved performance and long-term growth of the Malaysian economy. 2016 ELEVENTH MALAYSIA PLAN The final leg in the journey towards realising Vision 2020 to achieve full development in Malaysia. Productivity and innovation are basic pillars for the Plan, which is based on six strategic thrusts: 1. Enhancing inclusiveness towards an equitable society; 2.
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