More industry contribution to research and innovation needed

By Abdul Wahab Mohammad - July 3, 2019 @ 12:49pm

RESEARCH and innovation (R&I) can drive the economic growth of a country. The best example is probably the Republic of Korea.

In the 1950s, Korea’s Gross Domestic Product (GDP) was less than Malaysia, but over the last 50 years, it has increased by more than 117 times compared to our country’s GDP which has increased by approximately 15 times only.

As a result, the GDP of Korea now far exceeds Malaysia and the former is now considered an advanced and developed country.

Thirty years ago, it was quite rare to hear the names of Samsung, LG and Hyundai but today these companies are the giants in producing various types of products which generate strong growth for the corporations and thus indirectly for the nation.

During my last visit to Korea several years ago, I was told that Samsung has more than 1,500 personnel with doctoral degrees working for it. They carry out applied and innovative research directly beneficial for Samsung products.

Data on R&I spending provided by Unesco (http://uis.unesco.org/apps/visualisations/research-and-development-spend…) clearly illustrates the need for more involvement of Malaysian companies in R&I activities. The data, as displayed in Table 1, shows overall R&I spending as measured by the percentage of GDP for the top 15 countries in the world. In addition, data for China, Malaysia and Thailand is included for comparison. The spending data is broken down further into contributions by the industry, government and universities.

The data clearly shows that the percentage of R&I spending in Malaysia is only about 1.3 per cent of the GDP as opposed to Korea (number one ranking), which is about 4.3 per cent.

However, the more important fact is shown by the ratio of industry contribution as opposed to government and university contribution. In Korea, the ratio is 3.86 which means that the industry contribution is 3.86 times higher than that from government and universities. However, for Malaysia, the ratio is only 0.84 which means that in Malaysia, government and universities contribute more to R&I expenditure.

Data for the top 15 countries also shows the same trends whereby the industries contribute more to R&I spending compared to government and universities. Industries should be the sector that can really drive commercialisation of R&I to produce innovative products that can compete in the open market.

It is interesting to note that China, even though it is not listed as the Top 15 nations, spends a huge amount of money on R&I and industry involvement is much higher (ratio of 3.40 which is almost the same as Korea). Even in Thailand, which has lower R&I spending compared to Malaysia, the ratio of industry contribution is 1.20 which is higher than Malaysia. Figure 1 clearly shows that only Malaysia has a ratio of below 1.0.

Therefore, it is timely that the R&I ecosystem in Malaysia shifts towards more active involvement by the Malaysian industries. The Malaysian government has provided various incentives to the industries to encourage more impactful R&I activities to be carried out. For example, offer tax incentives or double tax cut for contribution to R&I funding.

The Education Ministry and the Ministry of Energy, Science and Technology, Environment and Climate Change have also allocated a huge amount of money for R&I by encouraging research collaboration between universities and industries. Industries are encouraged to provide matching funds for these partnerships. However, the take-up by industries is rather low, may be because R&I activities are not viewed as a strategic sector by the companies.

Public and private universities in Malaysia are always looking forward to provide the cooperation to enhance R&I between universities and industries. There are a significant number of doctoral degree holders in universities now who are keen to work on R&I that will benefit the country. These academics have also nurtured thousands of graduates at the master’s and doctoral levels who have specific expertise in their own fields.

These graduates are looking for employment opportunities in R&I so that they can use their expertise to generate new and creative ideas that can contribute towards higher economic growth for the companies and the country.

Therefore, it is highly imperative that the industries now should respond to make R&I as one of the important sectors for strategic growth of the companies.

Companies should at least set up research units/divisions that will look into the development of innovative ideas that can help increase their revenue. These units/divisions can work with the universities to enhance the R&I partnership. Even though the immediate returns for the company may not be obvious in the short term, the R&I unit/division should be seen as a sustainable strategic measure to sustain the business in the long run by researching creative ideas that can be explored further.

The success of Korean companies should be the right model to show how R&I has helped to enhance the profitability of companies in the long run. As for the universities, we are always open to any ideas on R&I collaboration with industries so that universities and industries can work together to help Malaysia become an advanced country like Korea. This is not just a dream but this is something that can be successful, provided both parties are willing to work together towards common goals.

By Abdul Wahab Mohammad

Read more @ https://www.nst.com.my/education/2019/07/501152/more-industry-contribution-research-and-innovation-needed

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