Malaysia needs 'big innovation purpose' to stay ahead

KUALA LUMPUR : An ambitious purpose on innovation, a synergised ecosystem and a ‘bridge’ between research and commercialisation - these are among the elements needed for Malaysia to pull ahead in the region and achieve its ambition to be among the Top 20 most innovative nations by 2030 in the Global Innovation Index. Malaysia is currently ranked 36, and correspondingly, GDP growth is currently significantly lower than its potential output level with a gap of 49 percent.

According to the Malaysia Knowledge Economy Study, every 1 per cent increase in innovation capacity increases a country’s Gross Domestic Product (GDP) per capita by 0.36 per cent. For Malaysia, an increase in innovation production could translate to US$1.21 billion (RM5.06 billion) additional to our GDP of US$336 billion, even as the 12th Malaysia Plan has outlined innovation as a key enabler in economic growth.

In the first of a series of industry discussions aimed at fostering tighter synergy in the ecosystem, initiated by the newly merged entity, Malaysian Research Accelerator for Technology and Innovation (MRANTI), panel experts say that Malaysia has incredible potential, but it needs tighter collaboration within the innovation ecosystem that will support its success. Furthermore, a strong technology transfer office mechanism between academia, government and investors to accelerate innovation to commercialisation is needed.

Challenges In The Labs

As much as 80 percent of research in Malaysia today is being conducted in our Higher Learning Institutions. According to WIPO data, just over 9,000 patent applications were made in Malaysia between 2013 and now. However, this is a fraction of the 120,000 research publications Malaysia has produced in the same period.

“To be absolutely candid, our ecosystem is still fragmented. Our Return on Ideas, or ROI, is not yet where it should be. This is why we need to ask ourselves some hard questions: Why aren’t we innovating enough? And, even though we have so much talent, the private sector is still not investing enough in R&D - why?” said Dzuleira Abu Bakar, CEO, MRANTI.

“As an ecosystem, we have come a long way, but there’s so much more that needs to be done. True innovative spirit most cannot be unleashed by an inaccessible and fragmented ecosystem. Lack of funding access, limited resources including skilled talent, and policies that have yet to catch up to potential are just few of the many areas that need to be urgently addressed.”

“Many of our research and higher education institutes produce amazing discoveries every year. They publish many research papers and discover great inventions in their labs and R&D facilities. We have some amazing talent in our academia,” she added.

But that’s where they stay, Dzuleira pointed out. Many do not go on to commercialisation, because they do not have access to funding or expertise to scale, and many struggle to file patents, which can be complex and take years.

Currently, Malaysia’s commercialisation rate is only at an estimated 5 to 10 percent, compared to some highly-developed economies like Japan or the USA, where commercialisation rates are as high as 60 percent.

Prof. Datin Paduka Dr Teo Soo-Hwang, Chief Scientist Officer, Cancer Research Malaysia, said that the critical infrastructure to enable success in commercialisation is not yet fully-developed in Malaysia.

She added that many of the world’s most esteemed education institutions not only have great academic units, but also commercialisation units, expertise and funding that enable them to commercialise their research.

“It is this confluence of manpower and funding that we absolutely need in Malaysia,” she said. “Cancer Research Malaysia and other research institutions have already shown that we can produce cutting edge research, some of which is ready for commercialisation, but we need more support in order to commercialise.”

Furthermore, she added, Malaysia needs its “big innovation purpose”, and to be clear as to what innovation areas to work on, and Malaysia can offer on the world stage in order to attract the talent, investment and recognition it needs to achieve its ambitions.

Eluding to Malaysia’s value proposition being our niche, Prof Datin Paduka Dr Teo said, “What do we do well above the rest that will allow us to stand out? For example, Cancer Research Malaysia has focused on research in Asians and in that way, we have brought a value proposition to an international platform - it is clear that we need to continue to be clear about how we are unique and excel in these areas.”

Prof Datuk Dr Mohd Hamdi Abd Shukor, Vice Chancellor, Universiti Malaya, said, a lot of academic research is for the purpose of fundamental discovery. These do not necessarily need or can be commercialized. However, he said, “where more work needs to be done is in applied and industry research, where problems can be met with solutions.”

Researchers often have difficulties in wearing the many hats needed in the commercialisation journey. “What we’re asking professors to do, when they have a patent, is to ‘spin-off’ into different roles; opening up a company, for example. And I’ve seen this end in failure a lot. Sustainability is an issue. It’s clear that this method is not working,” he said. “Researchers are not always businessmen, and they should be building capacity in research. Taking the patent through into the business world should be done by the experts in business.”

Prof Hamdi said, the professor cannot be the researcher, entrepreneur and venture capitalist at the same time. “We need to look at the entire value chain again (to better mark out roles and responsibilities),” he added.

An initiative like MRANTI is much needed, said Thomas G Tsao, founding partner of venture capital firm Gobi Partners. “As a venture capital firm, we welcome any initiatives that encourage more collaboration and communication. We welcome partnerships. What MRANTI is doing here, bringing together stakeholders who weren’t necessarily talking to each other in the past, is fantastic.” Gobi has invested in 27 early-stage startups in Malaysia, and also has its ASEAN headquarters in Malaysia.

MRANTI as a Connector

In this respect, Dzuleira said that MRANTI is working to be that connector between the various stakeholders in the ecosystem, functioning as a single platform, or ‘glue’ between the key players in the ecosystem.

“This is one of many more engagement sessions with the ecosystem. We will drive continuous innovation, and be the one-stop research commercialisation agency with the resources to accelerate the commercialisation of innovative ideas and concepts to impact,” she said. “We connect problem statements with solutions, bridging collaboration between public and private sectors to increase private sector participation, either through market access, investment, advisory or consultation and facilities for testing and prototyping.”

MRANTI will also connect researchers to the industry, and in doing so, ramp up the number of research or innovations that can be commercialised. MRANTI will also be working closely with the Ministry of Science, Technology and Information (MOSTI) and the Economic Planning Unit (EPU) with the vision to play a critical role in bringing together the private and public sectors.

“However, MRANTI’s mandate is not a silver bullet. There will be no magic trick involved. Instead, what will truly be the ingredient for success is consistent, persistent and structured engagement among all stakeholders, so that everyone is united in this journey towards commercialisation,” she said.

In this way, Dzuleira said, MRANTI believes that the national GDP will improve, more jobs can be created, and Malaysia will attract more foreign investment, to ensure products and solutions are more affordable, available and accessible towards improving quality of life for all Malaysians, and to ensure Malaysia becomes a high-tech, high-income nation.