Page 39 - ASEAN-EU Dialogue 2018: Regional and Inter-Regional Economic Cooperation: Identifying Priorities for ASEAN and the EU

Chapter Seven
Malaysia’s Experience in Technology and Innovation
Ng Boon Kwee

Introduction
Technology and innovation capabilities are two interrelated driving forces of economic growth,
social well-being and sustainability of a nation. Technology, in broad parameter is defined as
the totality means employed by people to provide material objects for human sustenance and
comfort (Fischer, 1975). It is also understood as a total societal enterprise (knowledge, people,
skills, facilities, methods, etc.) devoted to the research, development, production and operation
of technics (McGinn, 1991). Technology is embodied in people, materials, cognitive and
physical processes, plants, equipment and tools (Hall, 1994). In this respect, technology
capabilities exist in three forms, i.e. production, investment and innovation. The first capability
is for productive facilities, the second is for expanding capacity and establishing new
production facilities, and the third is for developing technologies (Kim, 1999).

Innovation is the implementation of new or significantly improved product, process, marketing
and organisational method (OECD, 2005). It is recognised as an iterative process in which
complexity and inter-disciplinarity are the key characteristics that underpin the discourse
surrounding technological innovation (Betz, 2003; Janszen, 2000; Mowery, 1995). Thus,
management of innovation has to encompass both specific and general areas. The management
of research and development (R&D), new product development, operation and production, the
commercialisation process, technological collaboration and technological strategy are
examples of specific area management, while the management of complexity, risks, knowledge,
creativity and learning are examples of general area management (Dodgson, 2000).

Governance and Institutions
In Malaysia, the five-year master plan known as the Malaysia Plan (MP) is the medium-term
development plan formulated for national development that include development agendas
related to STI. Since its independence in 1957, Malaysia’s economy has been transformed from
st
rd
th
th
agriculture-based (1 MP-3 MP, year 1957-1980) to manufacturing-based (4 MP-7 MP,
th
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year 1981-2000), and innovation-led (8 MP – 11 MP, year 2001-current). Development
during the agriculture-based economy was heavily focused on basic inputs such as land and
labour. During the manufacturing-based economy, focuses were given to the development of
infrastructure, collateralised risk-free capital, labour and institutional support. As for
innovation-led economy, the government has allocated more efforts in developing several
critical success factors to innovation capabilities development such as harnessing emerging
technologies, talent, value creation from R&D and market forces (see ASM, 2017).
Nonetheless, Malaysia has yet to achieve a full innovation-driven economy. In the Global
Competitiveness Report (GCR), Malaysia has been classified as an economy in transition from
the stage of efficiency-driven to innovation-driven since 2012. The latest GCR 2017-2018
nd
placed Malaysia at 22 position (out of 137 countries) in the World Competitive Index
(Schwab, 2017).

Education and Skilled Workforce
As of 31 August 2016, there are 20 public universities, 34 polytechnics, 94 community colleges
and 497 private Higher Education Institutions (HEIs) in Malaysia offering courses in diverse
areas related to Science, Technology, Engineering and Mathematics (STEM) (MASTIC, 2017).
With the ultimate aim to intensify development of critical mass for S&T, the Second National
S&T Policy and Action Plan launched in 2003 outlines the adoption of 60:40 ratio of students

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