Chapter 8 CONCLUSIONS AND RECOMMENDATIONS
8.2 Recommendations for Improvements of R&D activities in Malaysia
The strengths of R&D activities in Malaysia can be viewed from the continued growth in private sector's support for R&D and the increased focus in strategic areas such as electronic, telecommunication and computers, which are related to high-tech industries. However, there is still room for improvement in R&D activities, which can contribute to the enhancement of R&D productivity and competitiveness. Some of the areas that need to be addressed are
a. Specific goals and targets with regard to the performance of R&D activities, in particular, with respect to financial and human resources.
b. Remedial actions needed to tackle some, if not all, of the problems that have been cited as limiting R&D activities.
c. Measurement on the impact of R&D outputs. This is important as it relates to cost-effectiveness of a particular R&D activity.
Some of the steps that can be taken to rectify these areas and the related ones are;
i. Strategic planning for R&D by all the sectors. This would include the setting up of vision, mission, organisational values, specific targets (e.g., target for R&D Expenditure/GDP ratio, number of researcher per 10,000 labour force), objectives, planning and strategies in the pursuit of R&D programmes.
There is a need to draw a 5:year R&D plan, which sets out the main targets to be
achieved; for example,
R&D
Component
5:year Target
(i) GERD/GDP ratio
2%
(ii) Number of researchers
30 per 10,000 labour force
(iii) Private sectors
contribution
80% of Total National GRDE
ii. Cost-effective analysis of R&D activities across sectors needs to be carried out.
iii. There is a need to focus on R&D differentiation by each sector which may lead to optimised financial as well as human resources. This may be possible with a higher level of collaboration among researchers from different sectors and also a greater accessibility of information on R&D activities.
iv. Physical Infrastructure for (academic) R&D in IHLs – Creative and innovative ideas may remain unexplored if the physical infrastructure necessary for their pursuit is not available. A thorough examination on the need to gather information on the following aspects, both at the aggregate and the field of science level;
o the quantity of research space
o the levels of investment
o the sources of funds
o the condition and adequacy of research space
o a measure of unmet needs with regard to research space
v. Academic liaison with industry : One of the major factors that limit R&D activities in private sector is the shortage of R&D personnel. One way to overcome this problem is to attract R&D personnel from outside the private sector. This can be done if collaboration between university and private sector can be established. There is a need for a mechanism that will promote such a link between private sector and academia.
vi. Incentives for the GRIs and IHLs : The slow growth in the performance of R&D in both the GRIs and IHLs need to be properly addressed. Among the many factors cited as limiting R&D activities, the lack of incentives for individual researchers in the public sector may play a part in contributing to the decline in R&D activities . In the absence of clear incentives, many individual researchers in the IHLs, for instance, may look for other
activities that lead to financial gains, such as consultancy and other professional services. There is a need to devise effective mechanisms that take into consideration incentives for researchers carrying out R&D in the public sector.
Appendix A
Table 4.1 : Profile of National R&D Expenditure 1992 - 1996
1992 1994 1996
Expenditure
Overall (RM million) Ratio GERD/GDP % Private sector (RM million) GRIs (RM million)
IHLs (RM million) NPO (RM million)
550.7
0.37 246.3 253.7 50.7
-
611.2
0.34 292.6 164.9 150.9
2.9
549.1
0.22 400.1 108.7 40.4
- Outsourcing by Private Sector
(RM million)
% Outsourcing Private to :
IHL GRI Private Foreign
48.5 16.4
0.012 0.057 0.200 48.2
29.4
9.1 1.9 0.3 2.2 24.5
57.0 12.5
1.6 0.1 2.4 52.9 Manpower
Researchers per 10,000 labour force
Headcount (Researcher, Technicians & Others) FTE
Expenditure/Research Personnel)
2.1
- 4562.9
-
5.8 11,472 6675.6 RM18,500
5.1 9,233 4,436.9 RM19,513
Table 4.2 : Type of Research and Priority Areas (1992 : 1996)
Expenditure (RM Million)
Types of Research 1992 1994 1996
Basic Applied
Experimental Work
68.8 271.7 210.2
44.2 383.5 183.5
49.2 228.5 271.4
Total: 550.7 611.2 549.1
Priority Areas:
Sector 1992 1994 1996
Field Of Research (FOR):
Private GRI
IHL
Engineering Sciences Agricultural Sciences Agricultural Sciences
App Sc. & Tech.
Agricultural Sciences Biological Sciences
Engineering Sciences Agricultural Science
Biological Sciences
Private GRI IHL
Socio-economic Objectives (SEO):
Manufacturing
Plant Production & Plant Primary Product Manufacturing
Manufacturing
Plant Production & Plant Primary Product EnergyResources
Manufacturing
Plant Production & Plant Primary Product Manufacturing
Table 4.3 : Type of Cost (1992 : 1996)
Expenditure (RM Million)
Types of Cost by Sector 1992 1994 1996
Private:
Labour Capital Operating
67.8 120.9
57.6
105.9 100.1 86.5
94.0 192.8 113.3
Total: 246.3 292.6 400.1
GRI:
Labour Capital Operating
111.6
72.0 70.0
85.6 31.2 48.0
62.9 20.9 24.8
Total: 253.7 164.8 108.6
IHL:
Labour Capital Operating
17.5 19.5 13.6
19.1 123.4
8.4
22.9
6.2 11.3
Total: 50.7 150.9 40.4
NPO:
Labour Capital Operating
- - -
1.6 0.2 1.1
- - -
Total: - 2.9 -
Grand Total : 550.7 611.2 549.1
Table 4.4 : Factor Limiting R&D Activities and R&D Incentives (1992, 1994 and 1996)
1992 1994 1996
Factors Limiting R&D Activities:
Internal
External
- -
Delays in Making Decision
Shortage of personnel
1. Delays in making decisions 2. Lack of new products /Strategy Shortage of personnel
Incentives:
% companies benefited from incentives Type of incentive enjoyed by companies
Problems faced by companies when applying for R&D incentives
- - -
46.3%
Double deduction on revenue expenditure
Definition of R&D is not clear
36.7 %
Double deduction on revenue expenditure
Procedures are not clear & Definition of R&D for the incentives
Table 4.5: International Comparison1
Country Malaysia Singapore Japan USA
GERD/GDP Ratio (%) 0.22 (1996) 1.13 (1995) 3.00 (1995) 2.54 (1995)
No. of Researchers per 10,000 Labour force
5.1 (1996) 48 (1995) 82 (1995) 74 (1995)
% GERD by Sector
Private 72.8 64.5 65.2 72.7
GRI 19.8 21.4 9.6 9.0