GOVERNMENT SUPPORT FOR INNOVATION
Table 5.16 and Figure 5.28 show the kind of support companies obtained from the government in the manufacturing sector. In this sector, the
results show that more support were reported to be received by government on duty free to import machinery and equipment with 37.3%, while lower support was obtained for innovation grant from government with 18.4%.
1.992.17 1.96 1.79 1.952.22 2.06 1.93 1.78 1.89 1.59 1.48 1.98 2.01 1.42 1.63 2.03 2.14 1.66 2.02 1.361.42 1.23 1.40
0.00 0.50 1.00
Mean
0.50 2.00 2.50
Reduced time to respont to customer or supplier needs Improved quality of goods or services
Reduced costs per unit of output or service
Improved employee satisfaction and / or reduced rates of employee turnover Large
Medium
Small Large
Medium
Small
Business Sectors and Company Size ManufacturingServices
Table 5.16: Government Support on Innovation Activities: Manufacturing Sector
Types of Government Support
Yes No
N % a % b % c % d % Total “No”
(%) Technical consultancy services 119 26.5 141 31.7 79 17.8 68 15.3 38 8.5 73.3 Technical support service 100 22.5 142 31.9 84 18.9 73 16.4 46 10.3 77.5 Duty free to import machinery
or equipment 166 37.3 152 34.2 39 8.8 52 11.7 36 8.1 62.7
Commercialization of R&D fund 113 25.4 158 35.5 58 13.0 71 16.0 45 10.1 74.6
Tax incentive 159 35.7 164 36.9 33 7.4 44 9.9 45 10.1 64.3
R&D grant 101 22.7 162 36.4 65 14.6 75 16.9 42 9.4 77.3
Innovation grant 82 18.4 170 38.2 82 18.4 66 14.8 45 10.1 81.6
Note:
N =Frequency
a =Company is not aware about the incentive available.
b =Process of getting assistance is too complicated and take long time.
c =Incentive offered do not cover our company activities.
d =other reasons
Table 5.17 and Figure 5.28 show the kind of support that companies obtained from the government in the service sector. In this sector, the results also shows that more support were
reported to be received by government on tax incentives with 17.9%, while lower support was attained for duty free to import machinery and equipment from government with 7.6%.
Table 5.17: Government Support on Innovation Activities: Service Sector
Types of Government Support
Yes No
N % a % b % c % d % Total
% Technical consultancy
services 83 11.3 83 11.3 273 37.2 26 3.5 114 15.6 86.7
Technical support
service 111 15.1 211 28.8 87 11.9 214 29.2 110 15.0 84.9
Duty free to import machinery or equipment
56 7.6 286 39.0 21 2.9 246 33.6 124 16.9 92.4
Commercialisation of
R&D fund 63 8.6 225 30.7 79 10.8 256 34.9 110 15 91.4
Tax incentive 131 17.9 270 36.8 17 2.3 209 28.5 106 14.5 82.1
R&D grant 73 10.0 218 29.7 82 11.2 257 35.1 103 14.1 90.0
Innovation grant 74 10.1 288 39.3 19 2.6 247 33.7 105 14.3 89.9
Note:
N =Frequency
a =Company is not aware about the incentive available.
b =Process of getting assistance is too complicated and take long time.c =Incentive offered do not cover our company activities.
d =other reasons
NATIONAL SURVEY OF INNOVATION 2012
Additionally, the respondents also indicated the reasons for not obtaining the government support provided. Figure 5.29 shows the respondents’
reasons for not getting government support at all. Based on Figure 5.29, 42% of the respondents attributed the main reason for not getting support
from government is because the company is not aware of the incentives available; while the least reason is because of the process of getting assistance is too complicated which they opined took longer time (11%).
Figure 5.29:Reasons for Not Getting Government Support
Figure 5.30 shows the comparison for government support received by companies. The findings show that comparatively, small companies received more
assistance than the medium and large companies for all types of government support.
Figure 5.28:Government Support on Innovation Activities Based on Business Sectors
18.43%
22.70%
35.73%
25.39%
37.30%
22.47%
26.47%
10.10%
9.96%
17.87%
8.59%
7.64%
15.14%
11.32%
0 5 10 15 20 25 30 35 40
Percentage (%) Innovation grant
Business Sectors and Government Support on Innovation Activities ManufacturingServices
R&D grant Tax incentive Commercialisation of R&D fund Duty free importantion of machine / equipment Technical support service Technical consultancy services Innovation grant R&D grant Tax incentive Commercialisation of R&D fund Duty free importantion of machine / equipment Technical support service Technical consultancy services
0 10 20 30 40
50 42% 11% 31% 16%
Percentage (%)
Reasons for Not Getting Government Support The company is
not aware about the incentive
available
The process of getting the assistance is too complicated
and take long time
The incentive offered do not cover company
activities
The reason
Figure 5.30:Comparison of Government Support Received Based on Company Size
Generally, the usefulness of government support can also be seen in Table 5.18. The mean scores indicate that the manufacturing sector received more support (mean = 2.01) from the government
compared to the service sector (mean = 1.51).
Overall the respondents agreed that government support is moderately important to them.
Table 5.18: Overall Usefulness of Government Support
Usefulness of Government Support
Sector
Manufacturing Services Overall Mean
Usefulness of government support for innovation
activities 2.01 1.51 1.76
Note: Mean indicator: 0 = not relevant, 3 = highly important
3.55%
3.48%
2.97%
3.56%
3.14%
3.70%
3.66%
4.81%
5.19%
4.58%
5.18%
4.83%
4.81%
4.55%
6.15%
6.07%
5.67%
6.02%
6.09%
5.92%
6.09%
Percentage (%) Small
Medium
Company Size and Government Support Received
Large
Innovation grant R&D grant Tax incentive
Commercialisation of R&D fund Duty free imporatation of machine / equipment Technical support service Technical consultanct services
0 2 4 6 8
NATIONAL SURVEY OF INNOVATION 2012
Box 5.4
SUCCESSS STORY OF A BORN GLOBAL FIRM: ANITA FRAGRANCE
Starting from the backyard industry in 2006, Anita Fragrance Cosmetic Laboratory in Sabah, is today’s inspirational success story of born global venturing in Malaysia. Enthused to learn cosmetic manufacturing, Mrs. Anita Mohamad mastered the herbal and organic soap making technology through learning and experimenting for 2 years. Originally she started off by hands on knowledge of cosmetic manufacturing from Philippines, Thailand and France with the help of her husband and friends. Later on she got professional assistance of SIRIM (Standards and Industrial Research Institute of Malaysia) in learning the formulas, though did not implement them due to high costs and competition. The monopoly of large companies in acquisition of coconut oil was counteracted through innovative use of palm oil for its organic benefits in opaque and transparent soap making. The hit and trial for a couple of years paid off in gaining expertise and establishment of Anita Fragrance with the help of SME Bank Malaysia.
Since its establishment, Anita Fragrance holds uniqueness and inimitability of its products as the concepts for soap making technology and product manufacturing is exclusively done by Mrs.
Anita. The threat of prevailing mindsets of domestic Chinese market was turned into opportunity of exploring international markets and in 2009, with facilitation of MATRADE; the company opted to go global and started exporting their products in Japan. Later, company’s success in Japan aggravated the demand of Anita Fragrance Products in domestic market also. Today Anita Fragrance is the leading manufacturer of Pure Marine Collagen (PMC) soaps in Malaysia comprising of almost 90% share and foresees to exploit other emerging cosmetic markets of South East Asia and Middle East with more expert markets like China.
Company’s management has strong belief in continuous learning for innovation and all the local and international learning experiences are incorporated in product manufacturing to bring in novelty. Diversity is considered indispensable for competition in any market and 6 types of soaps, gamat soap, borneomat, seaweed soap, susu beras, tamarind soap, and caramel black soap are exported. The other skin care products include facial cream and lotions, shampoo and conditioner, facial cleanser, shower gel and cleansers and toilet bath soaps. To improve customer service, the company also provides OEM/contract manufacturing services for the customers for the products of their own choice.
Regarding the achievements of Anita Fragrance, the diligence and innovativeness in manufacturing products paid off and the factory got GMP and Halal certification in 2009 for being in compliance with Ministry of Health GMP guidelines and ASEAN Cosmetic Directive guidelines. Anita Fragrance Soap has been awarded as best Halal Product in Kazakhstan, and has been rated on number 7 in top 100 soaps in Japan beauty with title of most unique and best beauty product in the year 2011. Above all, Mrs. Anita Mohamad has been awarded by SME Bank for being among the most successful women entrepreneurs of Malaysia in year 2012.