INNOVATIVE AND NON-INNOVATIVE RESPONDENTS BASED ON STATES 9 INNOVATIVE AND NON-INNOVATIVE RESPONDENTS BASED ON COMPANY. EXPENDITURE ON INNOVATION ACTIVITIES BASED ON SECTOR 16 BOX 4.2 SUCCESS STORY OF PUSAT RAWATAN PAKAR MAJLIS UGAMA 17 ISLAM PAHANG (PRKMUIP) SDN BHD.
Overview of Innovation in the Small Medium and Large
In Malaysia, the survey, known as the National Survey of Innovation (NSI), the sixth in the series, covered the period from 2009 to 2011. The survey focuses on innovation among small, medium and large enterprises (SML) in the manufacturing and service sectors.
EXECUTIVE SUMMARY
The result of the survey provides essential information for the formulation and modification of strategies and programs to further improve the practice of innovation and commercialization. The survey also found that no duty on the import of machinery or equipment was the main form of government assistance to the manufacturing sector.
International Comparisons
The survey conducted showed that the main developer of innovation was the company itself and other companies within the same type of business. Small businesses, on the other hand, received help mainly in the form of innovation grants.
Recommendations
While the comparison shows that the most competitive country in innovation was Sweden which ranked first in 2011 increasing its position from 4th in 2010. However, Malaysia ranked higher than China, Taiwan and Indonesia in Innovative Capacity Index with an overall ranking of 39.
INTRODUCTION
OBJECTIVES OF THE SURVEY
HISTORY OF THE NATIONAL SURVEY OF INNOVATION
However, unlike the NSI-2, the NSI-3 used a single-stage survey approach and the questionnaire was based on the questionnaire in the CIS-3 Survey. The sample size for the survey was 4,000 manufacturing companies, using the same techniques as in previous surveys.
SCOPE OF THE STUDY
The response rate of the survey was 18.5% and out of these 749 companies only 263 companies (35%) were found to practice innovative activities. The incidence of innovation recorded in the period was 54% showing an increase in the number of companies practicing innovation.
THE CONCEPT OF INNOVATION
Empirical results have shown that innovative companies perform better in terms of output, profitability or employment growth than the companies without innovation (Geroski et al.
LITERATURE REVIEW
This is the definition adopted by innovation surveys conducted in OECD countries and other non-OECD countries, including Malaysia.
STUDIES IN INNOVATION
MEASURING INNOVATION
DEFINITION OF TERMS
Implementation of a new or significantly improved product (good or service) or process, a new marketing method or a new organizational method in business practice, workplace organization; and external relations”. Implementation of a new organizational method in the company's business practices, workplace organization or external relations.
SOURCE OF DATA
Then the data collection process is elaborated and finally the data analysis is presented.
POPULATION AND SAMPLING
SURVEY METHODOLOGY
Medium: Sales turnover between RM1 million and RM5 million or full-time employees between 20 and 50; and c) Large: Sales turnover of more than RM5 million or full-time employees of more than 50. According to The Research Advisors (2006), the minimum number of respondents required to represent the entire population was 1,534 based on the 95% confidence level or a margin of error of 2.5%.
SURVEY INSTRUMENT
PROCESS OF DATA COLLECTION
ANALYSIS OF DATA
This chapter introduces the different types of analyzes conducted based on the data from this study. The purpose of this chapter and subsequent chapters (Chapter 5) is to illustrate various innovation activities in the SML sectors of both manufacturing and service sectors, in an effort to further Malaysia's vision of becoming a high-income developed country by 2020 to become, to reposition.
QUESTIONNAIRES ADMINISTERED
PROFILE OF COMPANIES
INNOVATIVE AND NON- INNOVATIVE RESPONDENTS
The classification of innovative and non-innovative respondents based on business sector is presented in Table 4.5 and Figure 4.1. Starting with the first pre-cooked meat in Malaysia in early 2000, Hajjah Aminah Food Industries Sdn Bhd (HAFI) is a 1-InnoCERT listed company and a distinguished name in the food industry for its various innovative products and hygienic and glamorous brands.
PROFILE OF INNOVATIVE COMPANIES
Innovative Activities Based on Sector
Repair and installation of machinery and equipment Other manufacturing Furniture Motor vehicles, trailers and semi-trailers Machinery and equipment n.e.c Electrical equipment Computer, electronic and optical products Manufactured metal products except machinery and equipment Base metal Other non-metallic mineral products Rubber and plastic products Basic pharmaceutical products products and pharmaceutical preparations Chemical and chemical products Wood and products of wood and cork, except furniture Leather and related products Clothing Textiles Beverages Paper and paper products Printing and reproduction of registered material Food. Activities of extraterritorial organizations and bodies Activities of households as employers Arts, entertainment and recreation Human health and social work Education Public administration and defence; compulsory social security Administrative and support service activities Professional, scientific and technical activities Real estate Financial and insurance/takful activities Printing and reproduction of recorded media Information and communication Accommodation and Food service activities Transpotation and storage Wholesale and retail trade; repair of motor vehicles and motorcycles Construction Water supply; sewerage, waste management and remediation activities Electricity, gas, steam and air conditioning systems.
Types of Ownership Based on Business Sectors
Size of Companies Based on The Sectors
Companies Annual Sales Turnover
Expenditure on Innovation Activities Based on Sector
In terms of growth, Pakar Hospital has also branched out to a few clinics at Al Farabi Kuantan and Jaya Gading. Recently, Hospital Pakar also collaborated with local consulting company to implement a more effective hospital management system that includes 5S strategy.
PRODUCT INNOVATION
In general, there are three concepts for the newness of the innovations; new for the company, new for the market and new for the world. However, the minimum entry level for an innovation is that it must be new to the company.
INNOVATION ACTIVITIES
Both the manufacturing and service sectors show that they have introduced new or significantly improved products to the market from 2009 to 2011. Figure 5.3 shows the comparison of introduced product and service innovation based on sectors and company size.
PROCESS INNOVATION
Figure 5.8 illustrates the comparison by company size of process innovations based on sectors with new or significant improvements in the innovation process in terms of methods, logistical handling and processes adopted. Being a publicly listed company, POS Malaysia Berhad is dynamically engaged in raising Malaysia's status as a member of the Universal Postal Union (UPU).
MARKETING INNOVATION
For closed innovation, the highest response was for product design and packaging with 31% in manufacturing while it was in the service sector, 9% for product promotion and pricing (Figure 5.10). For new or significantly improved product promotion and pricing, large companies recorded the highest percentage with 16.78% in manufacturing and 10.79% in the service sector of small size companies.
ORGANISATIONAL INNOVATION
The results of the study show that the most common form of organizational innovation in the manufacturing sector is business practices (67%), followed by the workplace organization, which represents 21% of organizational innovation and external relations. On the other hand, in the service sector, workplace organization is the most common form of organizational innovation (63%), while the percentages of innovation in business practices and innovation in external relations are 16% and 21%, respectively.
ABANDONED AND ON-GOING INNOVATION ACTIVITIES
The findings show that the number of continuous innovations within the period in the manufacturing sector of large companies scored the highest percentage with 30.34% and 37.23%. Consequently, for the number of innovations abandoned within the period in the manufacturing sector, large companies scored the highest percentage of 12.81% compared to medium-sized companies that scored the highest percentage of 9.78% in the service sector.
PERFORMANCE OF INNOVATION ACTIVITIES
OBJECTIVES OF UNDERTAKING INNOVATION ACTIVITIES
The manufacturing sector shows the same answers, where the three most important goals are improving product quality (average = 2.37), followed by the need to open new markets or increase market share (average = 2.29) and expanding the range of products (average = 2.22). . This is followed by the need to open a new market or increase market share (average=1.62) and to fulfill regulations and standards (average=1.57).
EFFECT OF PRODUCT AND PROCESS INNOVATION
Figure 5.25 shows the comparison on the effects of product and process innovation between company sizes. Similarly, the service sector also shows the same trend where it observed that improving quality of goods and services is the highest effect of product and process innovation with an average score of and 1.31 in the large, medium and small companies respectively.
EFFECT OF MARKETING AND ORGANISATIONAL INNOVATION
All sizes of companies in the manufacturing sector showed that the greatest effect is to improve the quality of goods and services, with large companies showing an average of 2.17, medium-sized companies with an average of 2.22 and small companies. Similarly, the service sector also showed a comparable trend, with companies of all sizes agreeing that improving the quality of goods and services is the biggest impact with an average of 1.42 across large, medium and small companies.
GOVERNMENT SUPPORT FOR INNOVATION
The hit and trial for a few years paid off in gaining expertise and establishing Anita Fragrance with the help of SME Bank Malaysia. Later, the company's success in Japan also increased the demand for Anita Fragrance Products in the domestic market.
FUNDING OF INNOVATION ACTIVITIES
Own source product Own source process Own source organizational Own source marketing Own source R&D. Private Source Product Private Source Process Private Source Organization Private Source Marketing Private Source R&D Small.
INNOVATION CO-OPERATION
The finding also shows that in the service sector, commercial laboratories and private R&D were the least important partners with mean = 0.37. The findings show that in the manufacturing sector, large companies that are considered clients or customers are their most important partner with an average score of 1.36; medium-sized companies that apply to suppliers and customers/.
SOURCES OF INFORMATION FOR INNOVATION
INTELLECTUAL PROPERTY AND PROTECTION METHOD
In general, companies agreed that confidentiality agreement is the most important protection method for their intellectual property rights with mean=1.53. Specifically in the manufacturing sector, non-disclosure agreement was also considered as the most important method of protection with.
FACTORS HAMPERING INNOVATION ACTIVITIES
NATIONAL INNOVATION MODEL AWARENESS
The national vision of NIM is to transform the country from a resource based economy to innovation based economy. The national vision of NIM is to increase and nurture the country's capacity for knowledge, creativity and innovation.
INTERNATIONAL COMPARISON
GLOBAL COMPETITIVENESS INDEX (GCI)
On the other hand, Japan holds the second position in R&D spending by companies, followed by Finland in third place. This was followed by Switzerland (2), Finland (3) respectively, with Malaysia ranked 34th.
COMPARISON OF GLOBAL
Malaysia was placed in the 16th and 18th positions for these two components of innovation. Singapore ranked second for government procurement of advanced technology products, compared to Malaysia which ranked fourth.
INNOVATION INDEX (GII), INSEAD
In terms of innovation capacity, Japan ranked highest, followed by Switzerland and Germany. Switzerland had the highest corporate expenditure on R&D and also on university-industry collaboration in R&D.
Innovation Efficiency Index (IEI)
In the SEAO regional group, Indonesia was ranked second, and its overall IEI ranking was also higher than Thailand and Malaysia, although it is among the world's lower- and middle-income economies. Korea was ahead of Singapore and Australia in the high-income economies of the SEAO group with its IEI ranking of 69 and RG ranking of 7th.
COMPARISON OF COUNTRIES ON INNOVATION CAPACITY
2nd place followed by USA with 5th and Great Britain with 7th place. Adoption and use of information and communication technologies is best in Sweden with 1st place and Great Britain with 2nd place.
COMPARISON OF INTERNATIONAL PATENTS APPLICATION
CONCLUSION AND RECOMMENDATIONS
Innovation Co-operations
Effects of Innovation
CONCLUSION
Source of Information
Increased production capacity was much more important for the manufacturing sectors compared to the corresponding increase in service delivery capacity in the service sector. The above conclusion also answered objective 1 (1) with the details of the discussions in the analysis chapters of the study.
Developer of Innovation
Government Support and Assistance
Innovation across Industries
Objective of Undertaking Innovation Activities
Hampering Factors
The above conclusion equally answered the objective (1) with the details of the discussions in the analysis chapters of the study. 3) with the details of the discussions also in the analytical chapters of the study.
International Comparison
Role of Information in Economic Growth
RECOMMENDATIONS
Increase Co-operations among Companies
Increases in R&D and Innovation Funding
Promoting Innovative Culture among SML Sector
Generating and Disseminating Informations on Innovation
Continue regular S&T, R&D and NSI surveys by MASTIC or other relevant institutes.
Strengthening the Innovation Infrastructure
Supporting the Innovation Product and Services
Innovating by External Sources
Increase Human Capital Capacity
Promote Competitive Market
The government should offer incentives to innovative companies in the form of tax exemption or reduction for a certain number of years, prizes and recognition. The government should take appropriate punishment in the form of license revocation and monetary fines for non-compliance with innovation requirements.
Targeting Innovation Effort
The government should be more aggressive in persuading the private sector to do more research and development. MASTIC Malaysian Science and Technology Information Center MOSTI Ministry of Science, Technology and Innovation MSIC Malaysian Standard Industrial Classification NEM New Economic Model.
BIBLIOGRAPHY
SME Corp Annual Report 2012-2013 Edition, Electronic Publication, Malaysia, Retrieved from http://www.smecorp.gov.my/vn2/node/717.
APPENDICES
- COMPANY’S GENERAL INFORMATION
- GENERAL INFORMATION ABOUT YOUR COMPANY 1 Main activity
- Turnover in 2011: RM _____________; Percentage derived from exports: %
- PRODUCT (GOODS OR SERVICE) INNOVATION
- During the three-year period between 2009-2011, did your company introduce;
- New and/or Significantly Improved Products
- Please give a short description of the new or significantly improved product(s)
- Were any of your goods and service innovations during the three-year period between 2009-2011
- Please estimate how your total turnover in 2009-2011 was distributed between
- PROCESS INNOVATION
- During the three-year period between 2009-2011, did your company introduce;
- Who developed these process innovations?
- Please give a short description of your most important process innovation
- MARKETING INNOVATION
- During the three-year period between 2009-2011, did your company introduce;
- Who developed these marketing innovations?
- ORGANISATIONAL INNOVATION
- During the three-year period between 2009-2011), did your company introduce
- ON-GOING OR ABANDONED INNOVATION ACTIVITIES
- Did your company have any innovation activities to develop product, process marketing and organisational innovations that were
- INNOVATION ACTIVITIES AND EXPENDITURE
- Overall, how would you rate the following innovation activities in your company between 2009 – 2011 based on the scale between 1 to 5 as follows
- During the three-year period between 2009-2011, did your company engage in the following innovation activities?
- OBJECTIVES AND EFFECTS OF INNOVATION
- Objective of undertaking innovation activities between 2009 and 2011
- What is the degree of impact for each of the following effects of your product (goods or services) and/or process innovations introduced during the three-year
- How important were each of the following effects of your marketing and/or organisational innovations introduced during the three-year period between
- GOVERNMENT SUPPORT FOR INNOVATION
- Did your company receive the following support for innovation from the government during the three-year period between 2009- 2011?
- Overall, how would you rate the usefulness of government support for your innovative activities?
- How could the government encourage innovation further in Malaysia?
- FUNDING
- What is your source to finance your innovation activities during the three-year period between 2009- 2011?
- Innovation co-operation during the three-year period between 2009-2011 Did your company have any co-operation arrangements on innovation activities with
- Please indicate the importance of your partners
- SOURCES OF INFORMATION FOR INNOVATION
- Sources of information for innovation during the three-year period between 2009-2011
- PATENTS & OTHER PROTECTION METHODS
- Please indicate the number of patents, industrial designs, trademark and copyright that
- What percentage of your turnover in 2011 is related to the patents/industrial designs that are valid (at the end of 2011) and owned by your company or
- For the period between 2009-2011, please indicate the importance to your company for each of the following method to protect innovations developed by
- During the three-year period 2009-2011, how important were the following factors for hampering
Has your company introduced a new or significantly improved product or service within a three-year period? Your company has introduced a new or significantly improved product or service to your market ahead of your competitors (perhaps it was already available in other markets).
THANK YOU FOR COMPLETING THIS QUESTIONNAIRE
The national vision for NIM is to apply a balanced approach to market-driven and technology-driven innovation. NIM's mission is to increase the country's capacity for knowledge, creativity and innovation and nurture "first class mentality".
