Innovation Is Key To Success
In the early years of post-Independence, the Malaysian economy was dependent on primary commodities – natural rubber and tin; towards the end of the 60s and early 70s, our economy was then deepened, broadened and strengthened through agricultural diversification which brought up timber and oil palm as core commodities for exports, in addition to increased industrial activities. We then experienced rapid growth supported by the manufacturing sector in the 1980s and 90s, before structurally, transforming into a service based economy today.
Our economic journey and structural transitions have always been in line with global trends and based on the strengths of our resources. Our journey is perhaps similar to the economies of developed nations.
But for us to grow our income, ensure a sustainable, resilient economy, and to be on the right path towards a developed nation, we cannot afford to overlook the element of innovation.
Looking at one of the measures, the Global Innovation Index (GII), Malaysia was ranked 32nd in the world overall in 2015 and we have been languishing in the 30s for years. This is a signal and indication that we need to do more but the onus is not just on the Government alone.
To drive the innovation agenda, it must be looked at from all aspects that begins from the role of Government, teachers and parents in educating and nurturing innovative thinking in children; right up to cultivating a bold, calculated risk-taking culture in the private sector.
We must encourage our young ones to have an inquisitive mind, to raise questions on topics and challenge ideas, be it through formal or informal education.
We must not be afraid or even hesitate to invest in innovation, research and development. There may be failures along the way but the process of discovery is vital to achieve greater outcomes.
In terms of commitment to innovation, on average the world spends in excess of 2% of Gross Domestic Product (GDP) on research and development (R&D), both private and public sector combined. The high income economies spend close to 2.5%.
Malaysia’s commitment to R&D, however, lags behind those in high and middle income economies, coming in at close to 1.1%.
I urge the private sector to place greater importance and consider increasing expenditure on R&D and innovation. The Government stands ready to support with various incentives and grants such as those provided by the Malaysian Investment Development Authority.
We must aim to increase our R&D and innovation output, following examples like China, that has taken a strong step forward in terms of innovation. In the year 2000, China’s innovation output (patent applications) was recorded at 51,906 but this figure ballooned to 928,177 in 2014, a 17 fold increase. Today, we see many large, global Chinese companies especially in the IT and telecommunications sectors.
Malaysia pales in comparison as we inched forward from 6,227 patent applications in 2000 to just 7,620 in 2014.
We must not be misled by these statistics as innovation is not a volume game, but at the same time, be guided by the fact that we are ranked 38th in terms of innovation quality and 9th among middle-income economies by the same index, lagging behind countries like China, India, South Africa, Seychelles and Argentina.
We live in an extremely competitive world and innovation is key in ensuring that our economy will grow and remain ahead of others.
The government has taken the necessary steps by creating specific agencies such as Agensi Inovasi Malaysia and the Malaysian Global Innovation and Creative (MaGIC) to drive the innovation agenda and we will continue to encourage innovative activities among the private sector through various educational programmes, R&D grants and incentives.
Let’s take the leap of faith and invest in innovation.