Has Malaysia moved forward in its path to become a high-income, knowledge-based country in 2009? Generally, everybody agrees that Malaysia is “stuck in the middle” — it is neither a low-cost manufacturing country nor a high tech, knowledge-based country.

There have been hefty pronouncements by politicians and the government that we need to “buckle up” if the country is to further improve the people’s living standard. But what is holding us up? What is the reality on the ground? What can we expect in 2010?

In the last 10 to 15 years, many universities have become the centres of research, apart from the traditional “crop”-based research institutions such as RRIM (LGM), MPOB and Mardi. What has been the contribution of the private sector to the country’s objective? Again, it has been government-led — to push the ICT industry, MDeC was established and to push the biotech industry, BiotechCorp, both with taxpayer’s money. Has the private sector taken any initiatives in innovation? What and where are the results?

If the patent filing statistics are any indication of technology innovation taking place in the country, there is disappointment. The ratio of patent filing by Malaysians compared with foreigners remains the same. Only about 6% to 7% of total patent applications filed at MyIPO are by Malaysians. In industrial designs, it is even lower — no signifcant improvement in this area. An analysis of the people who filed the Malaysian applications shows that they are still the universities and R&D institutions. Where are the filings by the private sector? Yet company (even public-listed company) annual reports show a significant percentage of expenditure is attributed to R&D. Is it really R&D or is it quality control activity disguised as such?

Many universities have established technology transfer/licensing offices (TLOs) to accelerate the commercialisation of their R&D results — a good move. Most of them are on the learning curve. It takes them time to realise what the industry needs are, what the industry looks for before entering technology acquisition/licensing deals.

Every year, there are several public exhibitions showcasing the R&D results of the universities, organised by Mosti, MHE and the universities themselves. The universities also take part in international invention shows. Do these exhibitions really attract potential technology licensees or collaborators or do they just attract shoppers from adjacent shopping malls?

For the exhibitions to serve the purpose they are organised for, it is important that the TLOs do their homework first. Potential licensees in the relevant field (both local and foreign) should be identified months ahead and the licensing proposals sent together with the invitations so that they can make a business decision to come and have the mandate to negotiate licensing deals.

The universities and R&D institutions have made some significant inventions. But there is hardly any public announcement over the different media. Unless inventions that have potential commercial value and discoveries that are significant scientific breakthroughs are given wide publicity in the media worldwide, nobody will look to our institutions for start-up/licensing proposals. Recently, a local university announced that it had found some promising cancer-curing biomarkers but there was only one small write-up about it in one local newspaper.

Yet when the Stanford University made a crude prototype handphone with a microscope attached to it, the “invention” was given centrefold publicity in our local papers. The write-up was so good that any player in the electronics industry would queue up at the university to negotiate a business deal on the invention. In addition, the university brands itself, yet again, as a world-class innovation institution producing world-class research.
Compare this with the write-up and publicity given to the local university. No biotechnology/pharmaceutical firm would treat the invention as a breakthrough or approach the university for a licensing deal.

This is where the TLOs of the universities have to work on good write-ups of the inventions and get the news in the world media so that the invention receives attention across the globe to attract potential licensees.
The government has announced the establishment of national innovation centres under the 10th Malaysia Plan. But how are the NICs going to contribute to making Malaysia a knowledge-based economy? More details are awaited. One thing can be said — more attention should be paid to our SMEs to get them to be innovative.

As a country in the tropics, can R&D be directed to areas where special problems/opportunities exist that need tailor-made solutions? Such problems/opportunities do not exist in the temperate countries, so no research is done there. Just consider getting into a car parked in the sun for half an hour.

Can we create a solution to this “tropical problem” which can be commercialised? Our buildings get heated up in the daytime, making air-conditioning inevitable. Can we design walls, windows, roofs and so on to prevent heat transfer into the buildings? Yet our multi-storeyed buildings are exact replicas of buildings designed for temperate countries technology-wise, with hardly any local design input. Don’t our engineers, architects and contractors see a “tropical challenge” in a “tropical problem” here? There are many such “tropical challenges” if we cared to look around that can be the subject of research and commercialisation in all the tropical belt countries — just like earthquake-prone Japan has designed and invented construction materials/methods for its buildings.

Although the government introduced tax incentives in this year’s budget for the registration of patents, trademarks and industrial designs, more needs to be done to encourage industry, especially the SMEs, to be more creative. Apart from tax incentives/double/triple deductions (“carrots”) for R&D activities, the government should use the law (“stick”) to force industries to increase productivity/innovation. The construction industry is one that needs the law to force it to innovate.

How long can it depend on foreign labour? How have the Japanese/Korean construction firms been able to remain in business without foreign labour? A recent analysis by this author showed that many Japanese construction firms have several patents to their name on construction methods/systems. Yet how many of the local construction giants, like IJM, UEM and Gamuda, and big property developers, like S P Setia and Sunway, have proprietory technology or patents to their names in Malaysia? Are they not forward-looking enough to do R&D to reduce labour costs and modernise the construction industry? Is it not high time the government legislated activities banning or reducing foreign labour in the construction sector to force it to update its technology?

This is what the government did in the 1970s — it legislated effluent standards in the palm oil industry to force it to develop better effluent treament systems instead of discharging all effluents into local drains and ponds.

Recently, a large producer of gloves announced a RM70 million plant expansion after it received approval to bring in 1,000-plus foreign workers. What R&D has this company done to reduce its dependence on foreign labour? What labour-saving innovations has it introduced, say, in the last five years?
Unless the government, in its strategy to improve productivity and make the nation innovative, takes a hard look at the labour-intensive industries (which need not be so if they are innovative), takes up “tropical challenges” and brands the country as an innovative one, nothing is going to change significantly.

The other problems of brain drain/brain gain, poor command of the English language, quality of research workers, improving the speed of registration of IP rights by MyIPO, more visible enforcement of IP rights and so on require political will to bring about tangible results. Hopefully, in the 10MP, the government makes bold decisions and acts to take the country from a potential has-been in terms of economic strength to a knowledge-based economy.

P Kandiah has 20 years of experience in the IP sector and is founder of IPR company KASS International Sdn Bhd (www.kass.com.my)

This article appeared in netv@lue2.0, the technology section of The Edge Malaysia, Issue 787 Dec 28 - Jan 10 2010