Malaysia: Time to put plans into action

Entrepreneurship

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With all the extraordinary hype about phone hacking in the UK, you could be forgiven for missing the recent visit of the Malaysian Prime Minister Datuk Seri Tun Razak to the UK. Najib met with the UK Prime Minister, David Cameron, the Queen as well as captains of industry. His message: consider Malaysia as the place to do high-value, high-tech knowledge-based innovation. This might seem a fairly common theme amongst leaders of developing countries trying to shift their economies from a traditional manufacturing focus to a knowledge-based economy, but this ambition in Malaysia has deep roots and is one which warrants greater attention.

The story of Malaysia’s ambition in science, technology and innovation (STI) began in 1991, when the then Prime Minister Mahathir launched an ambitious plan, known as Wawasan 2020 or Vision 2020, to make Malaysia a knowledge-based economy by 2020. STI was identified as integral to its success.  Mahathir was determined “to establish a scientific and progressive society, a society that is innovative and forward-looking, one that is not only a consumer of technology but also a contributor to the scientific and technological civilisation of the future”.  Now, over 30 years later, Malaysia has made significant progress against this ambition, but there is still work to be done. Najib’s promotion of Malaysia’s credentials internationally are important, but so too is the need to consolidate and focus investment through all layers of the STI system to ensure success.

Over the years, Malaysia’s scientific emphasis has changed, from rubber and tin to palm oil, combined with the greater prioritization of ICT, then more recently to biotechnology, pharmaceuticals and other high-tech areas. With its rich biodiversity, there is also increasing enthuasism to harness the research potential of Malaysia’s natural resources. Government expenditure on R&D reached a peak in 2006 at 0.64% of GDP, but has fluctuated widely since then and is still far behind their target of spending at least 1% of GDP by 2015. More positively, there have been encouraging improvements in the number of publications and patents, as well as significant increases in the number of R&D personnel – admittedly all from a low base.
Very few countries systematically update the overarching national strategy in the way that Malaysia does. When announcing the 10th Malaysia Plan to the parliament in June of last year, Prime Minister Najib reflected on Malaysia’s development journey thus far –built upon two Malaya Plans, Nine Malaysia Plans, Three Outline Perspective Plans, as well as a National Mission. Such strategies combined with the impressive New Economic Model announced in May 2010 provide a clear framework for Malaysia – with detailed plans, targeted sectors for science and innovation, as well as a reasonably honest assessment of impediments and obstacles to growth.
Yet Malaysia is criticised for being excellent at developing strategies, and weak in implementation. Malaysia’s bloated bureaucracy, coupled with poor monitoring, ill-equipped or unprepared middle management and weak implementation strategies, means that Malaysia often falls short in deliver.  This can be compounded by a seemingly endless raft of ‘announcements’ which distracts from completing those initiatives already underway. Funding reallocation part way through implementation is also a weakness, with researchers or universities discovering half way through their specific projects that funds had been withdrawn and committed elsewhere. With China, India and other parts of South East Asia also pursuing the knowledge-economy dream, excellent plans and strategies will not be enough.

If Malaysia is to achieve its ambition of Vision 2020, the Government needs to make clear strategic decision about what sorts of initiatives, investment and capacity is required. But it needs to also commit to delivering them. This could be as simple as providing the full research budget initially allocated, or investing in the middle ranks of organisations and government agencies to ensure that they have the skills, and means to deliver key objectives. Further research into obstacles and barriers to implementation might be useful to identify ways to overcome them. Milestones and monitoring is fundamental.

Beyond implementation, there is also an urgent need for consolidation and streamlining in Malaysia’s STI system. With so many ministries, agencies, schemes, grants and initiatives, it is difficult to ensure maximum impact and value for money. Malaysia must rationalise its schemes and incentives for R&D and technology development. New initiatives must not overshadow the delivery of existing policies. STI requires a stable, long-term policy framework – with confidence that the Government’s commitments will be adequately funded and achievable. Frustrating silos between strategic departments must be broken with more effort to foster integration and ideas. Further investments in STI policy training, focused on effective integration of policy, would be strategic, particularly to deepen understanding within government. It is, however, encouraging that Malaysia last year appointed a Science Advisor to the Prime Minister, Professor Dato’ Dr Zakri Abdul Hamid, who acts as an important champion across government. Similarly, it is hoped that the newly announced National Science and Research Council will be charged with this high level strategic coordination and consolidation which is so needed.

Human capital, however, is arguably the most important component of any successful knowledge economy. From the 1970s onwards, Malaysia has committed extraordinary levels of funding to education and human capital development.  The Government appropriately focused on primary and secondary levels before embarking upon a comprehensive transformation of higher education to satisfy higher demand and to stimulate economic growth. As a result, the numbers of researchers and PhDs are improving, but there is some way to go. The New Economic Model highlighted a frustrating disconnect between education investment and the translation to highly-skilled jobs. According to the Tenth Malaysia Plan, 77% of the workforce is only educated to secondary school level whilst only 28% of Malaysian jobs are in the highly skilled bracket. Such talent shortfall is a clear impediment to economic growth. The World Bank has highlighted the issue of a secondary education system under-preparing students for tertiary education. Meanwhile industry and academics complain that students today lack an entrepreneurial and innovative flare that underpins scientific discovery and high-quality research.

There is a need for a more comprehensive and thorough probing on what kind of human resource the country really needs to spearhead STI. Following decades of impressive investment, Malaysia now needs to focus on revitalisation and empowerment across the whole education system. New models that foster creativity and critical thinking as well as encourage a higher uptake of science, engineering and maths subjects would also be valuable. At the tertiary levels, Malaysia would also benefit from a more international focused approach. If the country is to compete and benchmark against international best practice, international collaboration needs to be more far embedded into the systems and structure of research funding within universities, as well as research institutes and private R&D centres.

And finally at the business level, Malaysia needs to develop a more adaptive and flexible environment if innovative capacity is to flourish. Despite decades of FDI, Malaysia has yet to foster a culture of creativity and competition amongst indigenous businesses, particularly at SME level, and there are few home-grown heroes in the STI space to draw inspiration from.

Despite these challenges, Malaysia has made significant progress since its independence in 1957 when STI policies were essentially a footnote to the country’s wider macroeconomic development. Getting the right mix for a robust, productive yet flexible STI system is complicated. There are many choices, yet with limited budget it may be difficult to strike the right balance. After much experimentation with different policies and ideas, Najib must now refine and perfect the model. This is likely to mean a more holistic, integrated system which is entrepreneurial and empowered to adapt swiftly to new ideas and opportunities. Of course, promotion within key economic partners such as the UK is critical to success, but ensuring that the foundations are solid at home must be the top priority.

Dr Amran bin Muhammad and Natalie Day are the authors of a comprehensive study of STI in Malaysia, conducted as part of the ambitious ‘Atlas of Islamic World Science and Innovation project which is supported by the Organisation of Islamic Conference and its family institutions, the Royal Society, Nature, IDRC, the Qatar Foundation, and the British Council. ‘Malaysia: Case Study No.1’ is available here.

Further studies of Pakistan, Egypt, Jordan and Qatar will be available in the coming months. Visit AIWSI website for more information.

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