Examining the profile of R&D expenditure in terms of types of research, it can be seen that two of the three types of research, i.e., applied and experimental work, received substantial increase in R&D spending (Figure 5.2). There was a marked decline in expenditure for basic research. It is obvious that a large portion of the expenditure was used for applied research, followed by experimental work and basic research. In 2000, applied and basic research made up 51.0%
and 27.0% of total R&D expenditure respectively. But in 2002, applied research made up 68.6% of the total expenditure and basic research made up 8.4% (i.e., representing a decline of 53.6% from 2000).
Expenditure on experimental work increased substantially by RM 208.9 million. In terms of percentage increase from 2000 to 2002, applied research had increased tremendously by 101.2%. The shift towards more applied research and experimental work and less on basic research was probably due to the prudential attitude taken by the private sector in order to minimise risks. However, there must
be a balance between the different types of research. Greater emphasis on basic research is necessary to develop cutting edge technology that will generate products that are
“new to the world”.
In terms of the priority area of research in year 2002, engineering sciences was the focus for the private sector, whereas GRIs emphasized research in information, computers and communication technology.
IHLs, on the other hand, focused their research mainly on environmental sciences. For the GRIs, the area was the same as in 2000. For IHLs, environmental sciences had become the priority area. This is the first time environmental sciences had become a priority area in research by a particular sector since 1992.
For socio-economic objectives, manufacturing had remained the objective for the private sector, whereas GRIs had changed from natural sciences, technologies and engineering to information and communication services. The IHLs had changed their socio- economic objectives from natural resources to manufacturing for year 2002.
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5.2 Industry R&D Expenditure
The total R&D expenditure in year 2002 was RM2.5 billion, an increase of RM829.1 million or 49.6% from year 2000. Of this amount, capital expenditure (land, building and machinery) made up 45.0% and current expenditure (labour and operating costs) took up 55.0%. In 2000, capital expenditure was 51.7% of total expenditure and current expenditure made up 48.3%. The structure of expenditure had changed significantly together with the increase in total expenditure.
Examining the amount of contribution by the various sectors, it is obvious that the private sector played the leading role in investment with its contribution of 65.3% of the total R&D expenditure (Figure 5.3). Compared to 2000, the percentage had increased by 7.4%. The increase was relative to the expenditures of GRIs and IHLs which had proportionally decreased in 2002 compared to 2000. IHL contributed 14.4% (17.1% in 2000), while the balance 20.3% (25.0% in 2000) came from GRIs.
5.2.1 R&D Expenditure by Sector and Field of Research (FOR)
Figure 5.4 presents R&D expenditure for the various sectors and the allocation of resources for the various fields of research.
The three areas receiving the bulk of R&D expenditure in 2002 were: engineering sciences (39.1%), information, computer and communication technology (24.4%) and applied science and technologies (12.6%).
Comparing the three sectors, the private sector spent heavily on the engineering sciences, followed by information, computer and communication technology, and applied
science and technologies. GRIs spent heavily on information, computer and communication technology, followed by economics, business and management, and agricultural sciences.
The IHLs spends more on environmental sciences, followed by applied science and technologies, and engineering sciences. This information is useful for identifying opportunities for collaborative linkages among the various sectors and research groups.
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5.2.2 Socio-Economic Objectives of R&D Expenditure by Sector
In 2002 economic development remained the main objective of R&D with 82.0% of total R&D expenditure spent for this purpose (Figure 5.5). This is followed by advancement of knowledge (RM 245.7 million), society (RM 197.7 million) and defense (RM 8.0 million). In year 2002, expenditure for economic development increased compared to year 2000, while expenditure for advancement of knowledge decreased substantially. Figure 5.6 presents the sub-sector that showed the largest amount of spending was manufacturing, followed by information and communication services. This is consistent with the national economic structure where manufacturing is the major contributor towards GDP. This spending pattern is similar to the amount spent in year 2000. As the world moves very quickly into the age of information technology, substantial investment had been allocated towards R&D in information, computer and communication technology as indicated in the R&D expenditure for 2002.
In terms of FTE, economic development continued to be the top priority of R&D for 2002 with 64.59% of FTE spent. This category experienced a decrease of 5.87%
(Figure 5.7). For the private sector, although economic development remained the most important objective for R&D, it declined as much as the percentage points from 92.1% in 2000 to 81.7% in 2002. While economic development experienced a decline, advancement of knowledge had a significant increased in full time equivalent from 3.9% in 2000 to 16.8% in 2002. Overall defense had a slight increase in FTE, while society suffered a decline. For GRIs and IHLs, economic development received the most attention in terms of FTE. Apart from economic development, the next objective for IHLs was the advancement of knowledge. Similar pattern can be seen for GRIs when the next important objective of R&D after economic development was also advancement of knowledge.
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