Final Report of R&D Survey 2012

National Survey ofReserch and Development (R&D) 2012

Commissioned By:

Malaysian Science and Technology Information Centre (MASTIC)Ministry of Science, Technology and Innovation, Malaysia (MOSTI)

Cunducted By:

Published By:

Malaysian Science and Technology Information Centre (MASTIC)Ministry of Science, Technology and Innovation, MalaysiaLevel 4, Block C5, Complex C,Federal Government Administrative Centre62662 Putrajaya MalaysiaTel: 603 - 8885 8038Fax: 603 – 8889 2980 Email: [email protected]: http://www.mastic.gov.my

Copyright c 2012 MASTIC. All rights reserved. No part of this publicationmay be reproduced in any form either in whole or part, without writtenpermission from the publisher.

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ACKNOWLEDGEMENTS

The Malaysian Science and Technology Information Centre (MASTIC) would like to express its gratitude and appreciation to the top management of the Ministry of Science, Technology and Innovation (MOSTI) namely, the Secretary-General for the guidance and support towards the publication of The National Survey of Research & Development (R&D) 2012 report. MASTIC is especially grateful to the members of the Technical Committee and National Science and Research Council (NSRC) for their much appreciated advice and inputs for this report.

Special thanks to the MASTIC team and the consultant team led by Prof. Dr. Ratnawati Mohd Asraf from IIUM Consultancies Sdn. Bhd. for their contributions and praiseworthy efforts in the preparation of this report.

Under-SecretaryMASTIC, MOSTI

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RESEARCH TEAM

Project Manager: Dr. Tan Yit Quin

Survey Logistics and Technical Support: Mrs. Anita Bahari Mr. Ramlee Ab Ghani Mr. Vinson Embaran Mrs. Rafidah Hasbullah Ms. Nabilah Mohd Taha Mrs. Dzarifa Ahmad

Lead Consultant: Prof. Dr. Ratnawati Mohd Asraf

Consultants: Assoc. Prof. Dr. Ismail Sheikh Ahmad Assoc. Prof. Dr. Gairuzazmi Mat Ghani Assoc. Prof. Dr. Isarji Hj. Sarudin Assoc. Prof. Dr. Tunku Badariah Tunku Ahmad Mr. Mohd Shukri Nordin Project Coordinators: Mrs. Noor Muhaini Mohd Hisham Mrs. Norshuhaida Zakaria

Research Assistants: Mrs. Nuruljannah Md Husin Ms. Masyitah Kipli Ms. Norhanizan Zakaria Editors: Prof. Dr. Ratnawati Mohd Asraf Assoc. Prof. Dr. Tunku Badariah Tunku Ahmad

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FOREWORD

The 2012 Report on the National Survey of Research & Development was based on the survey carried out in 2011 and 2012 for the financial years 2008, 2009, 2010 and 2011. The survey was first carried out in 1994 to assess the trends and developments in R&D in Malaysia, specifically in institutions of higher learning, government agencies and research institutes, and the business enterprise. From 1994 to 2008, the survey was conducted every two years. However, since 2008, it has been conducted every year.

The survey received good cooperation from the all sectors involved, and we hope that this cooperation will continue and be even better in future. We certainly will not spare any efforts in enhancing the usefulness of the survey, as it has always been our objective to make it an informative tool for policy makers to develop strategies and directions for R&D in Malaysia and to benchmark our country’s performance in R&D with that of other countries.

TABLE OF CONTENTS

ACKNOWLEDGEMENT iiiRESEARCH TEAM ivFOREWORD vTABLE OF CONTENTS viLIST OF FIGURES viiiLIST OF TABLES ixEXECUTIVE SUMMARY x - xvKEY R&D TERMS AND DEFINITIONS xvi - xxi CHAPTER 1: INTRODUCTION 1 1.0 PREAMBLE 1.1 THE NATIONAL SURVEY OF R&D 2 1.2 THE OBJECTIVES OF THE SURVEY 3 1.3 THE SCOPE OF THE SURVEY 3 1.4 THE ORGANISATION OF THE REPORT 3 CHAPTER 2: METHODOLOGY OF THE SURVEY 4 2.0 INTRODUCTION 4 2.1 SURVEY RESPONDENTS BY SECTOR 4 2.2 SURVEY METHODOLOGY 4 2.3 PROCEDURES TO INCREASE PARTICIPATION IN THE SURVEY 5 2.4 PARTICIPATION OF THE BUSINESS SECTORS, IHLs, AND GRIs 6 2.5 ACCURACY AND RELIABILITY OF THE R&D DATA 8 CHAPTER 3: OVERVIEW OF R&D IN MALAYSIA 11 3.0 INTRODUCTION 11 3.1 GROSS EXPENDITURE ON R&D 12 3.2 SOURCES OF FUNDS 15 3.3 HUMAN RESOURCE DEVELOPMENT 16 3.4 CONCLUSION 19

CHAPTER 4: R&D IN THE BUSINESS ENTERPRISE 20 4.0 INTRODUCTION 4.1 BUSINESS EXPENDITURE ON R&D (BERD) 20 4.2 SOURCES OF FUNDS FOR R&D IN THE BUSINESS ENTERPRISE 23 4.3 HUMAN RESOURCE DEVELOPMENT 24 4.4 CONCLUSION 26 CHAPTER 5: R&D IN THE INSTITUTIONS OF HIGHER LEARNING (IHLs) 27 5.0 INTRODUCTION 27 5.1 GROSS EXPENDITURE ON R&D 27 5.2 SOURCES OF FUNDS 29 5.3 HUMAN RESOURCE DEVELOPMENT 30 5.4 CONCLUSION 33

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CHAPTER 6: R&D IN THE GOVERNMENT AGENCIES AND RESEARCH INSTITUTES (GRIs) 34 6.0 INTRODUCTION 6.1 GROSS EXPENDITURE ON R&D 34 6.2 SOURCES OF FUNDS 36 6.3 HUMAN RESOURCE DEVELOPMENT 37 6.4 CONCLUSION 39 CHAPTER 7: INTERNATIONAL COMPARISONS 40 7.0 INTRODUCTION 40 7.1 GROSS EXPENDITURE ON R&D ACROSS COUNTRIES 40 7.2 R&D INTENSITY: GERD PER GDP 42 7.3 BUSINESS EXPENDITURE ON R&D 43 7.4 HUMAN RESOURCE DEVELOPMENT IN R&D 45 7.5 CONCLUSION 48

CHAPTER 8: CONCLUSION 49 8.0 INTRODUCTION 49 8.1 THE WAY FORWARD 50

APPENDIX LIST OF IHL AND GRI 51

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LIST OF FIGURES

CHAPTER 2: METHODOLOGY OF THE SURVEY Figure 2.1: Flowchart of the Verification Process 10

CHAPTER 3: OVERVIEW OF R&D IN MALAYSIA Figure 3.1: Gross expenditure on R&D (2000-2011) 12Figure 3.2: R&D Expenditure by Sector (2000-2011) 13Figure 3.3: Total R&D Expenditure by Sector (2011) 13Figure 3.4: R&D Expenditure by Field of Research (2011) 14Figure 3.5: R&D Expenditure by Socio-Economic Objective (2011) 14Figure 3.6: R&D Expenditure by Type of Research Activity (2011) 15Figure 3.7: Sources of Funds for National R&D (2011) 16Figure 3.8: Headcount of Research Personnel and Researchers per 10,000 Labour Force 17Figure 3.9: Headcount of Researchers by Qualifications (2006-2011) 17Figure 3.10: Headcount of Researchers by Gender (2006-2011) 18Figure 3.11: FTE of Research Personnel (2000-2011) 19

CHAPTER 4: R&D IN THE BUSINESS ENTERPRISE Figure 4.1: R&D Expenditure by Current and Capital Cost (2000-2011) 20Figure 4.2: Distribution of R&D Expenditures by Sector (2000-2011) 21Figure 4.3: Expenditures by Sector (2002-2011) 21Figure 4.4: Expenditure by Type of Research (2000-2011) 22Figure 4.5: Sources of Funds for R&D in the Business Enterprise (2006-2011) 24Figure 4.6: Headcount of Research Personnel in Business Enterprise (2000-2011) 24Figure 4.7: Proportion of Female Researchers to Male Researchers (2006-2011) 25Figure 4.8: FTE of Research Personnel (2006-2011) 26

CHAPTER 5: R&D IN THE INSTITUTIONS OF HIGHER LEARNING (IHLs) Figure 5.1: R&D Expenditure by Current Cost and Capital Cost (2000-2011) 27Figure 5.2: Expenditure by Type of Research (2000-2011) 28Figure 5.3: Sources of Funds for R&D in the IHLs (2008-2011) 30Figure 5.4: Headcount of Research Personnel (2000-2010) 30Figure 5.5: Proportion of Female Researchers to Male Researchers (2000-2011) 31Figure 5.6: FTE of Research Personnel(2000-2011) 32Figure 5.7: Proportion of Researchers by Qualifications(2000-2011) 32

CHAPTER 6: R&D IN THE GOVERNMENT AGENCIES AND RESEARCH INSTITUTES (GRIs) Figure 6.1: Expenditure by Current and Capital Cost (2000-2011) 34Figure 6.2: Expenditure by Type of Research (2000-2011) 35Figure 6.3: GRI Sources of Funds (2006-2011) 36Figure 6.4: Headcount of Research Personnel (2000-2011) 37Figure 6.5: Proportion of Female Researchers to Male Researchers (2000-2011) 38Figure 6.6: FTE of Research Personnel (2000-2011) 38

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CHAPTER 7: INTERNATIONAL COMPARISONS Figure 7.1: GERD in Selected Countries (USD Million) (2012) 41Figure 7.2: GERD per GDP (%) (2012) 42Figure 7.3: BERD per GERD (2012) 43Figure 7.4: BERD per GDP (%)(2012) 44Figure 7.5: Headcount of Researchers (2012) 45Figure 7.6: Researchers per 10,000 Labour Force (2012) 46Figure 7.7: FTE of R&D Personnel per Capita (FTE per 1,000 people) (2012) 47Figure 7.8: Percentage of Female Researchers Relative to Male Personnel (2012) 48

LIST OF TABLES

CHAPTER 2: METHODOLOGY OF THE SURVEY Table 2.1: Participation of the Business Enterprise in the National R&D Survey (2009-2011) 6Table 2.2: Participation of IHLs in the National R&D Survey (2009-2011) 7Table 2.3: Participation of GRIs in the National R&D Survey (2009-2011) 7

CHAPTER 4: R&D IN THE BUSINESS ENTERPRISE Table 4.1: Expenditure by FOR (2011) 23Table 4.2: Expenditure by SEO (2011) 23

CHAPTER 5: R&D IN THE INSTITUTIONS OF HIGHER LEARNING (IHLs) Table 5.1: Expenditure According to Field of Research (2011) 29Table 5.2: Expenditure According to Socio-Economic Objectives (2011) 29

CHAPTER 6: R&D IN THE GOVERNMENT AGENCIES AND RESEARCH INSTITUTES (GRIs) Table 6.1: Expenditure According to Field of Research (2011) 36Table 6.2: Expenditure According to Socio-Economic Objectives (2011) 36

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EXECUTIVE SUMMARY

Malaysia’s gross expenditure on R&D (GERD) has steadily increased since 2000. A sharp increase in GERD is particularly notable between 2006 and 2009, reaching close to an estimated RM7.2 billion in 2009; an increase of 97.4% percent over that of 2006. In 2011, total R&D spending across all sectors of the economy, public and private, was estimated at RM9.4 billion.

Malaysia’s research intensity (GERD/GDP), which is the percentage of her GDP that is spent on R&D, has also charted a consistent increase since 2004. Indeed, GERD/GDP rose from 0.63% in 2004 to 0.79% in 2008, and further to 1.01% in 2009, meeting the target of 1.0% set in RMKe-10 to be achieved by 2015. Our research intensity continued to improve, and in 2010 and 2011, Malaysia recorded a GERD/GDP of 1.07%.

From 2002 to 2011, the business sector has been the largest performer of R&D in Malaysia, accounting for over 50% of the GERD since 2000. In 2011, the business enterprise is estimated to have spent RM5.3 billion on R&D activities. Although they remain the largest performer of R&D in the country, the amount reported for 2011 is a decrease from the previous expenditure of RM5.5 billion in 2010.

Second to the business sector in R&D spending was the higher education sector, consisting of both public and private institutions of higher learning, whose expenditure has increased over the years, recording approximately 29% of the GERD in 2010 and 2011.

In 2011, the largest percentage (66.4%) of the expenditure went into Applied Research (RM6.3 billion), followed by Basic Research (RM1.6 billion) and Experimental Development (RM1.5 billion). The bulk of the basic research (82.2%) was conducted in the IHLs.

The top five fields of research (FOR) in 2011 were:

o ICT (38.3%); o Engineering and Technology (24.2%); o Natural Sciences (12.8%); o Agricultural and Forestry (7.1%); and o Biotechnology (6.8%).

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The top five socio-economic objectives (SEO) for which R&D was carried out in 2011 were: o Sustainable Economic Development (41.5%); o Advancement of Knowledge (19.6%); o Advanced Experimental and Applied Science (16.8%); o Society (13.8%); and o Environment (6.1%).

Only 2.3% of the R&D projects were carried out for the purpose of defence and security.

The major sources of funds for R&D in 2011 were business (55.0%), at an estimated RM5.2 billion, followed closely by the federal government (41.4%), at an estimated RM3.9 billion. The government plays a major role in national R&D, providing incentives for R&D in the form of various grants and double tax exemption to the business sector, and research grants, labour cost, and research facilities to IHLs and GRIs. 99.4% and 86.4% of the funding for R&D in the GRIs and the IHLs respectively come from the government.

The year 2011 recorded the highest headcount (96,961) for R&D personnel, which includes researchers, technicians, and support staff. The highest number of researchers (73,752) was also recorded in 2011, with an estimated 58.2 researchers out of 10,000 labour force, topping the target set by the Ninth Malaysia Plan (9MP) of 50 researchers per 10,000 labour force by 2010.

The headcount of researchers with PhDs and masters degrees has increased markedly:

o 7,001 researchers with PhDs (2006) to 33,272 (2011); and o 5,337 researchers with Masters (2006) to 24,691 (2011).

Female participation in R&D has steadily increased over the years. In 2008, women accounted for 40.9% of Malaysia’s R&D workforce, while in 2009, 50.9% of the workforce were women, the highest recorded since 2000; outnumbering their male counterparts by a small margin. The figures then dropped slightly to 48.8% and 48.7% respectively in 2010 and 2011. The proportion of female relative to male researchers is much higher than that of many advanced economies.

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KEY INDICATORS OF R&D ACTIVITIES IN MALAYSIA 2009-2011

YEAR 2009 2010 2011

Labour force (Million) 11.315 12.173 12.676

Total Population (Million) 28.1 28.6 29.0

GDP (RM Million) (Based on current price) 712,857 795,037 881,080

OVERVIEW OF NATIONAL R&D SURVEY

Organisations Surveyed With R&D

Business Enterprise 1,128 companies 1,171 companies 1,242 companies

Institutions of Higher Learning ( IHL ) 32 institutes 39 institutes 40 institutes

Government Agencies and Research Institutes ( GRI )

33 agencies or institutes



Total 1,193 organisations 1,244 organisations 1,322 organisations

Gross Expenditure on R&D ( GERD ) (Million) RM7,199.9 RM8,510.7 RM9,422.0

Current Expenditure (Million) RM5,873.9 RM6,732.5 RM6,674.0 Capital Expenditure (Million) RM1,326.0 RM1,778.2 RM2,748.0 GERD/GDP (%) 1.01 1.07 1.07

Human Resource in R&D

Total Headcount of R&D Personnel 70,453 88,314 96,961

Total Headcount of Researchers 53,304 67,412 73,752 Total Headcount of Technicians & Support Staff 17,149 20,902 23,209

Total FTE of R&D Personnel 35,461.43 50,483.98 57,404.89 Total FTE of Researchers 29,608.18 41,253.37 47,242.10 FTE per R&D Personnel 0.50 0.57 0.59 FTE per Researcher 0.56 0.61 0.64 Researchers per 10,000 Labour Force 47.1 55.4 58.2

FOR & SEO

Three Main Fields of Research (FOR)

1. ICT (63.2%) 2. Engineering and Technology (12.0%) 3. Natural Sciences (6.6%)

1. ICT (45.5%) 2. Engineering and Technology (27.6%) 3. Biotechnology (6.6%)

1. ICT (38.3%) 2. Engineering and Technology (24.2%) 3. Natural Sciences (12.8%)

Three Main Socio-Economic Objectives (SEO)

1. Sustainable Economic Development (39.5%) 2. Society (25.8%) 3. Advanced Experimental & Applied Science (20.4%)

1. Sustainable Economic Development (36.2%) 2. Advanced Experimental & Applied Science (18.8%) 3. Advancement of Knowledge (18.1%)

1. Sustainable Economic Development (41.5%) 2. Advancement of Knowledge (19.6%) 3. Advanced Experimental And Applied Science (16.8%)

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R&D IN THE BUSINESS ENTERPRISE (BE)

YEAR 2009 2010 2011

Total R&D Expenditure (Million) RM5,029.5 RM5,531.5 RM5,339.0

Current Expenditure (Million) RM4,054.1 RM4,304.0 RM4,027.3

Capital Expenditure (Million) RM975.4 RM1,227.5 RM1,311.7


Headcount of R&D Personnel 6,655 9,858 10,876

Headcount of Researchers 3,729 5,741 6,325

Headcount of Technicians & Support Staff 2,926 4,117 4,551

FTE of R&D Personnel 5,763.16 9,117.57 9,778.01

FTE of Researchers 3,413.04 5,477.62 5,856.77

FTE per R&D Personnel 0.87 0.92 0.90

FTE per Researcher 0.92 0.95 0.93

Other Indicators


1. ICT 2. Biotechnology 3. Engineering and Technology

1. ICT 2. Engineering and Technology 3. Biotechnology

1. ICT 2. Engineering and Technology 3. Biotechnology


1. Sustainable Economic Development 2. Society 3. Advanced Experimental and Applied Science

1. Sustainable Economic Development 2. Advanced Experimental and Applied Science 3. Environment

1. Sustainable Economic Development 2. Advancement of Knowledge 3. Advanced Experimental and Applied Science

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R&D IN INSTITUTIONS OF HIGHER LEARNING ( IHL )

YEAR 2009 2010 2011

Total R&D Expenditure (Million) RM1,711.1 RM2,464.4 RM2,725.6

Current Expenditure (Million) RM1,488.9 RM2,093.8 RM2,287.2

Capital Expenditure (Million) RM222.2 RM370.6 RM438.4









Other Indicators


1. Engineering and Technology 2. Natural Sciences 3. Medical and Health Sciences




1. Sustainable Economic Development 2. Society 3. Advanced Experimental & Applied Science

1. Sustainable Economic Development 2. Advancement of Knowledge 3. Society

1. Society 2. Advanced Experimental and Applied Science 3. Sustainable Economic Development

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R&D IN GOVERNMENT AGENCIES & RESEARCH INSTITUTIONS ( GRI )

YEAR 2009 2010 2011

Total R&D Expenditure (Million) RM459.3 RM514.8 RM1,357.4

Current Expenditure (Million) RM330.9 RM334.7 RM359.5

Capital Expenditure (Million) RM128.4 RM180.1 RM997.9









Other Indicators


1. Agriculture and Forestry 2. Natural Sciences 3. Biotechnology

1. Agriculture and Forestry 2. Natural Sciences 3. Biotechnology

1. Natural Sciences 2. Agriculture and Forestry 3. Biotechnology


1. Sustainable Economic Development 2. Society 3. Advancement of Knowledge

1. Sustainable Economic Development 2. Society 3. Advancement of Knowledge

1. Sustainable Economic Development 2. Advanced Experimental and Applied Science 3. Society

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KEY R&D TERMS AND DEFINITIONS

The following definitions, adapted from the Frascati Manual (2002), were used in the survey:

Research and Development (R&D)

R&D refers to any creative work undertaken on a systematic basis in order to increase the stock of knowledge which includes knowledge of man, culture and society – and the use of this stock of knowledge to devise new applications. R&D covers three activities: basic research, applied research and experimental development (Frascati, p.30).

Basic Research The systematic study directed towards greater knowledge or understanding of the fundamental aspects of phenomena and of observable facts, without specific applications for processes or products in mind (Frascati, p. 231).

Applied Research

Original work undertaken to acquire new knowledge with a specific application in view. It also involves research to determine possible uses from the findings of the basic research or to determine new methods or ways of achieving some specific or predetermined objectives (Frascati, p. 78).

Experimental Development

Research involving systematic work using existing knowledge gained from other research and/or practical experiences for the purpose of creating new or improved materials, equipment, products, systems, processes or services (Frascati, p. 79).

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Activities that are excluded from R&D

• Consultancy.

• All education and training of personnel in the natural sciences, engineering, medicine, agriculture, the social sciences and the humanities in universities and special institutions of higher and post-secondary education should be excluded. However, research by students at the PhD level carried out at universities should be counted, whenever possible, as a part of R&D.

• General-purpose data collection such as routine topographical mapping; routine geological, hydrological, oceanographic and meteorological surveying etc.

• Market surveys.

• Maintenance of national standards, the calibration of secondary standards and routine testing and analysis of materials, products, processes, soils, atmosphere, etc.

• Feasibility studies such as the investigation of proposed engineering projects, using existing techniques to provide additional information before deciding on implementation.

• The routine investigation and normal application of specialised medical knowledge. • All administrative and legal work connected with patents and licences (However, patent work connected directly with R&D projects is R&D).

• Software-related activities of a routine nature.

R&D Personnel/Manpower

All persons directly employed in R&D (such as researchers, technicians, and other supporting staff) and those providing direct services to the conduct of R&D (such as R&D managers, administrators, and clerical staff). These persons may be fully or partially engaged in the R&D activities. Persons providing an indirect service, such as canteen and security staff, are excluded (Frascati, p. 92).

Researchers

Professionals engaged in the conception or creation of new knowledge, products, processes, methods and systems, as well as those engaged in managing the projects concerned. These professionals encompassed a broad range of scientists, engineers, lecturers, and the like who are involved in generating new knowledge, products and applications through research.

In the higher education context of this survey, researchers included the following :

• all those academic staff engaged in research, supervising students’ research and managing the research of others;

• all graduate research assistants employed in research projects; and

• all postgraduate research students at the PhD level, both fulltime and part-time. Postgraduate students at the master’s degree level were not included in the headcount of researchers.

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By convention, members of the armed forces with similar skills who perform R&D should also be included (Frascati, p. 93).

Managers and administrators engaged in the planning and management of the scientific and technical aspects of a researcher’s work also fall into this category. Their rank is usually equal or superior to that of persons directly employed as researchers and they are often former or part-time researchers (Frascati, p. 93).

Technicians

Persons whose main tasks require technical knowledge and experience in one or more fields of engineering, physical and life sciences (technicians) or social science and humanities (equivalent staff). They participate in R&D by performing scientific and technical tasks involving the application of concepts and operational methods, normally under the supervision of researchers (Frascati, p. 94).

Supporting Staff

Skilled and unskilled craftsmen, secretarial and clerical staff who are directly associated with R&D projects, or who participate by supporting such projects. Managers and administrators dealing mainly in financial and personnel matters, and in general administration, insofar as their activities are a direct service to R&D are included in this category (Frascati, p. 94).

Headcount (HC)

The total number of persons who are mainly or partially employed in R&D. This includes both “full-time” and “part-time” employed staff (Frascati, p. 98).

Full-Time Equivalence (FTE)

The measurement unit of R&D personnel. One FTE may be thought of as one person-year. Thus, a person who normally spends 30% of his/her time on R&D and the rest of the time on other activities (such as teaching, being involved in university administration and student counselling) should be considered as 0.3 FTE. Similarly, if a full-time R&D worker is employed at an R&D unit for only six months, his/her FTE should be 0.5. Since the normal working day (period) may differ from sector to sector and even by institution, it is not meaningful to express FTE in person-hours (Frascati, p. 99).

R&D Expenditure

Total domestic expenditure (i.e. money spent on and payments made for) scientific research and experimental development activities expressed as a percentage of Gross Domestic Product (GDP). Its calculation includes current costs and capital expenditures, and excludes depreciation costs.

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Current Expenditure

Internal operational spending on goods (e.g. purchase of equipment and materials) and services (e.g. wages and salaries of R&D personnel) consumed within the current year, which needs to be made recurrently to sustain R&D activities. The calculation of current expenditure includes labour and operating costs.

Labour Cost

A researcher’s, technician’s and supporting staff’s total salary (basic salary plus allowances) multiplied by his/her FTE.

Operating Cost

Ongoing expenditures made out to sustain an R&D activity, which include costs of consumables, repairs, maintenance, fuels, purchasing of materials, books, periodicals, and annuals for R&D related purposes, prototypes, subscription to reference databases, and commissioned work. Operating costs also include rents, fees and hiring expenses associated with R&D, data processing, and payments to external organisations for use of specialised testing facilities.

Capital Expenditure

The total amount spent on fixed assets used in the conduct of R&D, such as land, buildings and other structures (e.g. labs, plants, etc.), vehicles, software, machinery, and equipment. This includes the estimated value of the space in which the research is conducted (such as a lab, etc.), although it may not have involved direct expenditure on the part of the researcher(s) (Frascati, p. 111).

Sources of Funds

Funds are money received in various forms (e.g. grants, contracts, salaries, commission, donations, etc.) to finance R&D activities.

Malaysian Funds

These are monies received from sources within Malaysia. They consist of various government funds and the institution’s own funds. Government funds may come from the Malaysian federal government, state or local governments, Malaysian NGOs, the private sector and other bodies within Malaysia, while own funds are an institution’s internally-generated income.

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Federal Government Funds

Money received from any Malaysian federal government body, such as ScienceFund, TechnoFund, Fundamental Research Grant Scheme (FRGS), National Institute of Health (NIH), CESS, and others.

State or Local Government Funds

Money received from the state government and municipalities, including their agencies.

Funds from Other Sources in Malaysia

Money received from other sources in Malaysia, such as specific ministries, the private sector and NGOs.

Institution’s Own Funds

The institution’s or company’s internally-generated funds, for example income from endowments, shareholdings and property, plus surplus from the sale of non-R&D services such as fees from individual students, subscriptions to journals, and sale of serum or agricultural produce (Frascati, p.117).

Foreign Funds

Money received from sources outside of Malaysia, such as that from foreign governments, international organisations (e.g. UNESCO, the Japan Foundation, the Asian Development Bank, etc.), and private corporations (e.g. Microsoft Corporation, General Motors, etc.).

R&D Classification

R&D activities, purposes and outputs are classified by Field of Research (FOR) and Socio-Economic Objective (SEO) codes.

i. Field of Research (FOR)

Classification codes used to categorise R&D activities according to the discipline under which they were conducted.

ii. Socio-Economic Objective (SEO)

Classification codes used to categorise R&D activities according to the purpose for which they were conducted, or the outcome(s) they produced.

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Sector Classification

The R&D performers involved in the survey are classified into three distinct sectors: government, higher education and business enterprise.

(i) Business Enterprise Sector

This sector includes all firms, organisations and institutions whose primary activity is the market production of goods or services (other than higher education) for sale to the general public at an economically significant price (Frascati, p. 54).

(ii) Higher Education Sector

This sector encompasses all universities, colleges of technology, polytechnics and other institutions of post-secondary education, whatever their source of finance or legal status may be. It also includes all research institutes, experimental stations and clinics operating under the direct control of or administered by or associated with higher education institutions (Frascati, p. 68).

(iii) Government Sector

This sector comprises all government organisations, ministries, statutory boards, departments, offices and other bodies which furnish, but normally do not sell to the community, those common services, which cannot otherwise be conveniently and economically provided. It includes those that administer the state and the economic and social policy of the community, but excludes the public institutions of higher education (Frascati, p.62).

ICT (38.3%)

Engineering & Technology (24.2%)

Natural Sciences (12.8%)

Agriculture & Forestry (7.11%)

Methodology Of The Survey

Overview Of R&D In Malaysia

R&D In The Business Enterprise



R&D In The Institutions Of Higher Learning (Ihls)

R&D In The Government Agencies And Research Institutes (Gris)

International Comparisons

CHAPTER 1:

INTRODUCTION

Summary Report

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CHAPTER 1: INTRODUCTION

1.0 PREAMBLE

Innovation, technological advancement, and investment in capital embodied in new technologies are central to economic growth and development. In addition to these, intangible capital in the form of knowledge embodied in the workforce and business plans is also a significant correlate of economic growth . Indeed, innovation and the accumulation of intangible capital have together accounted for a significant increase in productivity worldwide . In effective terms, income can only grow if there are sustained productivity improvements, without which inflation will creep into the economy, hence underscoring the importance of innovation for a country’s development.

An important component in innovation and technological advancement is investment in research and development (R&D). In order to create economic benefits, the results of R&D must be translated into tangible products and processes, and widely adopted. That is, R&D must lead to innovation and to the dissemination of technologies that enhance productivity. Competitive advantage at the micro and macro levels grows out of innovation and technological advancement through R&D, and is manifested in the production of goods, products, processes, and approaches to marketing, among other things. At the national level, innovative capacity is derived from the collective innovative capacity of public and private institutions in the country.

Malaysia’s economic transformation from a low to a middle-income economy was driven by factor accumulation; namely from capital in the form of investments, energy in the form of cheap fuel, and labour both domestic and foreign, but largely low-skilled. However, given the intensified competition for foreign direct investment (FDI) and talent, in addition to finite natural resources, a factor-driven growth model is not sustainable and is inconsistent with the economic structure required for a high-income economy . Malaysia needs to move up the value chain, shifting to higher value-added activities in order to compete with high-income economies. The shift to higher value-added activities requires innovation, technological advancement and productivity growth through R&D. Malaysia can only achieve its Vision 2020 target, which is to become a self-sufficient industrialized nation by the year 2020, through intensified R&D that subsequently leads to sustained productivity improvements.

Corrado, Carol, Charles Hulten, and Daniel Sichel (2009). "Intangible Capital and U.S. Economic Growth," The Review of Income and Wealth, vol. 55 (September), pp.661-685.Ben Bernanke, Chairman Board of Governors of the Federal Reserve Systemat the conference “New Building Blocks for Jobs and Economic Growth” Georgetown University May 16, 2011.Young, A. 1995, The Tyranny of Numbers: Confronting the Statistical Realties of East Asian Growth Experience, Quarterly Journal of Economics, pp.641-680

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Summary Report

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One of the ten big ideas proposed under the 10th Malaysia Plan in order to achieve the target of Vision 2020 is to support innovation-led growth. And to support innovation-led growth, the Malaysian government has committed to the following:

By 2015, Malaysia targets to achieve a GERD/GDP of 1.0% . To reach the target, the government has committed to increasing R&D expenditure during the Tenth Plan period through a combination of greater public R&D funding and facilitation support for private sector R&D. The government has also provided various research grants and investment incentives through the Ministry of Science, Technology and Innovation (MOSTI), the Inland Revenue Board (IRB), and the Ministry of International Trade and Industry (MITI), among others, to support and encourage researchers and industries to conduct R&D activities in priority areas, as well as to ensure that R&D activities are relevant to the needs of the country and industries. Among the incentives given for R&D investments are tax exemption on adjusted income, pioneer tax exemption on statutory income, and investment tax allowance on qualifying capital expenditure (QCE). The government has also allocated billions of ringgit in research grants to government research institutes (GRIs) and institutions of higher learning (IHLs). In addition, because the quality of R&D at IHLs hinges on the quality of its researchers, the government has also set to improve academic R&D by increasing the number of researchers with PhDs, aiming at a target of 75 per cent for research universities and 60 per cent for other public universities . Subsequently, the implementation of the MyBrain 15 programme is underway to finance doctoral studies for the purpose of increasing the number of PhD holders to 18,000 by 2015 and 60,000 by 2023.

1.1 THE NATIONAL SURVEY OF R&D

To achieve the above-mentioned targets and to assist in R&D-related policy-making processes, the government must have the capability and mechanisms to capture R&D activities that have been conducted in the country. Therefore, it is essential for Malaysia to have a detailed and comprehensive information base on her R&D activities. For this reason, the Malaysian Science and Technology Information Centre (MASTIC) has been conducting The National Survey of R&D since 1994 to record the R&D activities and expenditure by government departments, the business enterprise, government agencies and research institutes, and institutions of higher learning in the country.

Economic Planning Unit. (2010). Tenth Malaysia Plan 2011-2015.Speech by the Prime Minister in the Dewan Rakyat. Tenth Malaysia Plan 2011-2015.

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To shape a supporting economic system for innovation by developing human capital, investing in innovation infrastructure, and using economic incubators;

To create innovation opportunities by improving the public procurement system and reforming regulations;

To put in place innovation enablers to reduce inefficiencies in government institutions that support R&D and upgrade intellectual property regulations; and

To fund innovation through the Mudharabah Innovation Fund.

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1.2 THE OBJECTIVES OF THE SURVEY

The main objectives of the National Survey of Research and Development are to:

1. assess the trends and developments of R&D in Malaysia in the institutions of higher learning, government institutions and research institutes, and the business enterprise;

2. compare where Malaysia stands internationally with regard to R&D;

3. propose recommendations for the continued development of R&D in Malaysia; and

4. guide the government in making policy decisions with regard to R&D.

1.3 THE SCOPE OF THE SURVEY

The National Survey of Research and Development reports on the inputs to Malaysian R&D; namely, R&D expenditure and R&D personnel. It also reports on other aspects related to these inputs such as types of expenditure, GERD/GDP, types and fields of research, and sources of R&D funding. However, it does not capture nor report on R&D outputs such as products, inventions, publications, intellectual property (IP), or patents, as these are not within the scope of the survey.

1.4 THE ORGANISATION OF THE REPORT

This report presents the results of the National R&D Survey in Malaysia for the fiscal years 2000 to 2011, with a more detailed elaboration given for the fiscal year 2011. The definitions and methods used in this survey are based on the internationally agreed upon guidelines as put forth by the Organisation for Economic Cooperation and Development (OECD) member countries, otherwise known as the Frascati Manual. In the chapters that follow, we present the methodology of the survey, which includes the key R&D terms and definitions, the trends and developments in R&D in Malaysia for the years 2000-2011, and a comparison of Malaysian R&D with that of foreign countries. The report concludes with a summary of the main findings, the implications of the findings, and recommendations for the continued development of R&D in the country.

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CHAPTER 2:

METHODOLOGY OFTHE SURVEY

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CHAPTER 2: METHODOLOGY OF THE SURVEY

2.0 INTRODUCTION

This chapter explains the methods used in the National R&D Survey 2012. The chapter begins with a description of the respondents by sector, followed by the range of activities used to get the full participation of institutions, agencies, and companies in the survey, the resulting response rates, and the measures undertaken to ascertain the accuracy, reliability, and trustworthiness of the R&D data. The methodology used to capture the R&D activities is based on the internationally agreed upon guidelines as put forth by the Organisation for Economic Cooperation and Development (OECD) member countries, otherwise known as the Frascati Manual.

2.1 SURVEY RESPONDENTS BY SECTOR

To allow for international comparison, and to be consistent with the classification adopted in the Frascati Manual, the R&D performers in Malaysia were classified into three major sectors:

(i) the business enterprise sector comprising private enterprises and public enterprises;

(ii) the higher education sector, or institutions of higher learning (IHLs), consisting of both public and private universities and university colleges; and

(iii) the government sector consisting primarily of government-owned bodies, constituents and research institutes (GRIs).

2.2 SURVEY METHODOLOGY

Prior to 2008, data from the IHLs and GRIs were gathered from individual researchers. In 2008, following the methodology proposed and used by UNESCO, the collecting of data by institution was introduced to increase the rate of response from those IHLs that had a low rate of response from their researchers. From 2009 until 2011, this method of data collection was used for all the IHLs and GRIs. For the business enterprise, companies were identified from a list provided by the Department of Statistics Malaysia (DOSM) and from the 2008 register of R&D performing companies. These registers were combined and subsequently updated, with those that had ceased operations struck off the list. All the companies in this register were approached and requested to participate. In addition, the survey also employed, since 2008, the “top down” approach to increase the participation of the business enterprise in the survey (See Section 2.3). The survey for all three sectors involved the use of questionnaires and R&D reporting templates that included items that are central to the measurement of R&D activity as proposed by the Frascati Manual and as reported by organisations such as the United Nations Educational, Scientific and Cultural Organi-sation (UNESCO) and the IMD World Competitiveness Yearbook (WCY).

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2.3 PROCEDURES TO INCREASE PARTICIPATION IN THE SURVEY

As in any survey, the issue of participation and rate of response is of primary importance. Hence, the following steps were taken to increase the participation of the above sectors in the survey:

2.3.1 Collecting data by institution

The method of collecting data by institution was introduced to increase the rate of response from those IHLs that had a low rate of response from their researchers. From the fiscal year 2009 until 2011, this method of data collection was used for all the IHLs and GRIs. The primary advantage of this method of data collection is that rather than collecting data from individual researchers, as done in previous surveys, this technique required only one entity, the Research Management Centre (RMC) of an IHL or GRI, to report on behalf of all researchers within the institution. To obtain the figures for researchers, technicians, supporting staff, FTE, labour cost, capital expenditure and the rest, the RMC had to collaborate with the Human Resource Department, Postgraduate Studies Division and Bursar’s Office. Collecting data by institution not only removed the burden of reporting from individual researchers, thereby increasing within-institution response rates, but it also enabled the survey to capture R&D manpower and expenditure more accurately. All IHLs and GRIs were invited to attend workshops on completing the template for data by institution (Section 2.3.4). 2.3.2 Using the top-down approach for companies

Prior to 2008, data were obtained from individual companies. This, however, has not always resulted in a high rate of response. In 2008, an innovation in data collection was introduced, in which parent organisations were approached to provide the R&D data of those companies under which they are listed. This approach has led to a sharp increase in the number of companies that participated in the survey (Table 2.3).

2.3.3 Follow-up Calls

For those companies that were approached individually, follow-up calls were made to ensure that the respondents understood the importance of their participation in the survey and how to fill out the questionnaire or R&D template. Respondents that needed help with the questionnaire or template were identified and arrangements were made to assist them in completing the forms. 2.3.4 Workshops

A number of workshops were organised to help the respondents understand the R&D terms being measured and how their calculations might be drawn. The workshops, held on separate occasions for the IHLs, GRIs, and business enterprise, began with a talk that re-explained the purpose and importance of the survey, the meanings and concrete examples of terms such as FTE, researchers, capital expenditure, etc., and how best to derive their estimates. The second half of the workshops was a practical, hands-on session where the respondents were trained on how to use the template for institutional reporting, and given direct assistance with the calculations and with filling out the template.

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2.3.5 Visits

Official visits were made to selected IHLs, companies, and organisations that were known or expected to have large R&D expenditures. As these parties were identified as substantial performers of R&D in the country, the visits were critical in getting them to participate. During the visits, meetings and discussions were held with the top management of every organisation, e.g. Vice Chancellors of Research and Innovation, Deans of Research Management Centres, company CEOs, Finance Directors, etc. The discussions helped to eliminate confusion and apprehension about the survey, and in getting the organisations to agree to provide R&D data.

2.3.6 Help Sessions

Visits were made to institutions and companies that had requested help with various issues found difficult by the respondents, particularly those pertaining to the identification of R&D manpower and the calculations of FTE, labour cost, and capital and current expenditure. These visits helped the various entities to overcome the obstacles in filling in the questionnaire forms or templates, and subsequently increased the survey’s response rates.

2.3.7 Helpline

Finally, a helpline was also maintained to provide assistance with questions and difficulties that the respondents may have had about the survey.

2.4 PARTICIPATION OF THE BEs, IHLs, AND GRIs

The strategies used resulted in increased participation rates in the three sectors. In addition, for the IHLs and GRIs, the method of reporting by institution ensured that all the research projects in that particular institution were reported, in contrast to those years prior to 2008, where the number of projects reported would depend on the number of researchers who responded. Tables 2.1, 2.2, and 2.3 highlight the participation of BEs, IHLs, and GRIs respectively for the years 2009 to 2011.

Corrado, Carol, Charles Hulten, and Daniel Sichel (2009). "Intangible Capital and U.S. Economic Growth," The Review of Income and Wealth, vol. 55 (September), pp.661-85.Ben Bernanke, ChairmanBoard of Governors of the Federal Reserve Systemat the conference “New Building Blocks for Jobs and Economic Growth” Georgetown University May 16, 2011.Young, A. 1995, The Tyranny of Numbers: Confronting the Statistical Realties of East Asian Growth Experience, Quarterly Journal of Economics, pp.641-680

Table 2.1: Participation of the Business Enterprise in the National R&D Survey (2009 - 2011) 2009 2010 2011 Number of BEs 2,009 2,038 2,091 Number of BEs that responded 1,283 1,313 1,366

Number of BEs that conducted R&D 1,128 1,171 1,242

Number of BEs that did not conduct R&D 155 142 124 Response Rate (%) 63.9 64.4 65.3

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From their 2011 register of R&D performing companies, a response rate of 79% was obtained. 63% of the companies reported conducting R&D in 2011 while 16% reported not doing so, or had ceased business operations. From their 2010 register, the response rate was 93%. 83% reported conducting R&D in 2011 while 10% reported that they did not or had ceased operations. See 8.1.1, 8.2.2, and 8.2.3, Pg. 19, National Survey of R&D in Singapore 2011.Available at: http://www.a-star.edu.sg/Portals/0/media/RnD_Survey/RnD_2011.pdf

Table 2.2: Participation of IHLs in the National R&D Survey (2009 - 2011) 2009 2010 2011 Number of IHLs 42 42 49 Number of IHLs that responded 36 40 47

Number of IHLs that conducted R&D 32 39 40

Number of IHLs that did not conduct R&D 4 1 7 Response Rate (%) 85.7 95.2 95.9

Table 2.3: Participation of GRIs in the National R&D Survey (2009 - 2011)

2009 2010 2011 Number of GRIs 202 202 202 Number of GRIs that responded 195 196 202

Number of GRIs that conducted R&D 33 34 40

Number of GRIs that did not conduct R&D 162 162 162

Response Rate (%) 96.5 97.0 100

As shown in Table 2.2, the response rate for the IHLs in 2010 and 2011 was 95.2% and 95.9% respectively, an increase of about 10% from 2009 (85.7%); while for the GRIs (Table 2.3), the rate of response has been consistently high since 2009: from 96.5% in 2009, to 97.0% in 2010, to 100% in 2011. In the business enterprise, however, the rate of response is lower—ranging from 63.9% in 2009 to 65.3% in 2011 (Table 2.1), although the participation, in terms of the number of companies that responded to the survey, has increased manifold—from 198 companies in 2002, to 204 in 2006, to 949 in 2008, and to 1,242 in 2011.

Despite using various strategies such as calling CEOs to request for their companies’ participation in the survey, sending follow-up emails, making follow-up calls and visits, and conducting workshops, the rate of response in the business sector is not as high as that of the IHLs and GRIs. Many companies did not want to disclose their R&D expenditure; some stated that they would not participate, while others did not return the survey forms. These issues underscore the difficulty in getting the business sector to respond to the survey as participation is voluntary, and companies do not feel obliged to participate. This is in contrast to the practice in Singapore, which invokes the country’s statistics act , making it mandatory for institutions to participate, resulting in a much higher rate of response.

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MATRADE: http://www.matrade.gov.my/en/foriegn-buyers-section/70-industry-write-up--services/543-ict-industry Frost and Sullivan: http://www.frost.com/prod/servlet/report-brochure.pag?id=4H22-01-00-00-00

2.4.1 Interpretation of the Findings

It should be stressed that as in any survey, the results are estimates of the various indicators of R&D as they are based on the response of the three sectors to the survey. The results for the IHLs and GRIs are likely to be representative of the R&D activities in these institutions as the rates of response are very high—above 95% (with the exception of 2009 in the IHLs)—the highest being 100% for the GRIs in 2011 (Tables 2.2 and 2.3). However, for the Business Enterprise, the rates of response were lower, averaging at around 65% from 2009 to 2011. Although survey experts such as Babbie (1998) and Dillman (2007) regard these as being “good” to “very good” rates of response for mail surveys, the percentage of non-response should be taken into consideration when interpreting the findings.

In addition to the issue of response rate, it should also be highlighted that the majority of the companies that responded to the survey were ICT companies. For example, in 2011, of the 2,091 companies that were surveyed, 977 of those that responded were in ICT. While this may make the results for expenditure according to field of research (FOR) seem skewed towards ICT, the results, in fact, parallel the importance of ICT as the key driver of the Government’s Economic Transformation Programmes , contributing 9.8% to the national GDP in 2009, and targeted to increase to 10.2% by 2015 . It can be argued that given its comparatively large contribution to national GDP, it is very likely that expenditure on research in ICT is also very high, as R&D is needed to sustain this growth.

2.5 ACCURACY AND RELIABILITY OF THE R&D DATA

Rigorous measures were undertaken to ensure that the R&D data provided by the respondents from the three sectors were accurate and reliable. They included the following:

2.5.1 Understanding the R&D Terms and Their Measurement

To ensure that the respondents correctly understood the R&D terms being captured in the survey and their sector-specific measurements, talks, workshops and practical hands-on sessions were conducted and personal consultation provided.

2.5.2 Institutional or Company-Level Verification

Before being endorsed by the respective institutions and sent to MASTIC, the data went through a round of checking and verification by key personnel in these institutions with knowledge of the institutions’ R&D manpower and spending, such as the Finance Director, Accountant (for the business enterprise), the Human Resource Manager and the Deans the Deans of Research, and Postgraduate Studies (for the IHLs). Each of these personnel verified different components of the R&D report.

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From their 2011 register of R&D performing companies, a response rate of 79% was obtained. 63% of the companies reported conducting R&D in 2011 while 16% reported not doing so, or had ceased business operations. From their 2010 register, the response rate was 93%. 83% reported conducting R&D in 2011 while 10% reported that they did not or had ceased operations. See 8.1.1, 8.2.2, and 8.2.3, Pg. 19, National Survey of R&D in Singapore 2011. Available at: http://ww-w.a-star.edu.sg/Portals/0/media/RnD_Survey/RnD_2011.pdf

2.5.3 Accuracy and Consistency Check

In the second stage of verification, the data were cleaned manually by checking for completeness, missing statistics, inconsistencies, mismatches and possible double counting. Data that were found to be complete and accurate were submitted to MASTIC for verification and approval. Incomplete datasets were sent back for completion within a certain deadline, while data that did not tally (e.g. mismatch between current expenditure and combined labour and operating costs) and figures that looked suspect (e.g. too many researchers in relation to institution or company size) were highlighted and scrutinized. The datasets were later referred back to the respondents for correction. The referral for correction came with some suggestions as to how the errors could be amended.

2.5.4 Correction and Verification by Institution

The inconsistencies and mismatches found in the data were re-inspected and audited against the institution’s R&D database, after which the corrected data were again checked at the institutional or company level through the same verification loop mentioned in (i) above. The corrected data were re-endorsed before being submitted to MASTIC.

2.5.5 Rechecking by Consultants

The resubmitted data were referred to consultants for verification, paying special attention to the corrected figures before being submitted to MASTIC.

2.5.6 Verification and Approval by MASTIC

MASTIC exercised strict measures in examining R&D datasets and approved them only after finding no error within the datasets. Unapproved datasets were referred back to the consultants and would go down the verification loop again, while approved R&D datasets were keyed in for analysis and generation of charts.

2.5.7 Verification and Approval by Technical Committee

Once verified and approved by MASTIC, the data were submitted to the Technical Committee for verification and endorsement, and thereafter the National Science and Research Council (NSRC) for the same process.

The verification process is summarised in Figure 2.1.

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* MATRADE: http://www.matrade.gov.my/en/foriegn-buyers-section/70-industry-write-up--services/543-ict-industry * Frost and Sullivan: http://www.frost.com/prod/servlet/report-brochure.pag?id=4H22-01-00-00-00

Figure 2.1: Flowchart of the Verification Process

Start

Helping institutions understand the R&D concepts and their measurement

Verification of data by institution

Accuracy or Consistency Check by Consultants

Complete Yes/No

Verification and approval by MASTIC

Complete Yes/No

Verification and approval by Technical Committee

Verification and approval by the National Science and Research Council (NSRC)

Finish

Submission of R&D data by institution

No

No

Yes

Yes

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CHAPTER 3:

OVERVIEW OF R&DIN MALAYSIA

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CHAPTER 3: OVERVIEW OF R&D IN MALAYSIA

3.0 INTRODUCTION

This chapter presents an overview of R&D expenditure and activities in Malaysia over an 11-year period from 2000 to 2011, with a special emphasis on 2011 findings. The figures and interpretation are based on the information collected from three sectors of the economy – the business enterprise, government research institutes (GRIs), and institutions of higher learning (IHLs) –that had participated in the National R&D Survey 2012. The overview highlights developments in the national R&D landscape over the years with respect to gross expenditure, research intensity, sources of funds, Fields of Research (FOR) and Socio-Economic Objective (SEO), manpower, full-time equivalence (FTE) and female participation in R&D. Some discussion is given to how Malaysia compares to selected foreign economies in these measures. The trends that are highlighted shed light on where Malaysia is, how far she has come, and what she needs to accomplish in terms of R&D. A summary of R&D highlights and a conclusion are presented at the end of the chapter.

3.1 GROSS EXPENDITURE ON R&D

As shown in Figure 3.1, gross expenditure on R&D (GERD) in Malaysia has steadily increased since the year 2000. A sharp increase in GERD is particularly notable between 2006 and 2009, reaching close to an estimated RM7.2 billion in 2009; an increase of 97.4% over that of 2006. In 2011, total R&D spending across all sectors of the economy, public and private, is estimated at RM9.4 billion, an increase of 10.7% from 2010 and 30.9% from 2009.

Across the 11-year period, current expenditure constitutes the bulk of R&D spending. This is because current expenditure, which includes both labour and operating costs, is the expenditure required to maintain the research facilities and research personnel in the institutions of higher learning, government research institutes, and business enterprise, while capital expenditure is usually a one-off expenditure, given that it is the expenditure spent on land, buildings, vehicles, machinery, and equipment.

Malaysia’s research intensity, which is the percentage of her GDP that is spent on R&D (GERD/GDP), has also charted a consistent increase since 2004. Indeed, her GERD/GDP rose from 0.64 in 2006 to 0.79 in 2008, an increase of 28.13 %, and further to 1.01 in 2009, meeting the target of 1.0 set by the Economic Planning Unit (EPU) in 10 Malaysia Plan to be achieved by 2015. Our research intensity continued to improve, and in 2010 and 2011, Malaysia recorded an estimated GERD/GDP of 1.07%. Hence, it is important that the continued growth in R&D intensity be maintained as this will help to secure Malaysia’s foothold as an emerging economy in an increasingly globalised world.

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Science and Engineering Indicators 2012; available at http://www.nsf.gov/statistics/ seind12/pdf/seind12.pdf

Figure 3.1: Gross expenditure on R&D (2000-2011)

807.

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10000.0

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GER

D/G

DP (%

)

RM M

illio

n

Year Current Expenditure Capital Expenditure Total GERD/GDP

3.1.1 R&D Expenditure by Sector

Consistently throughout the 11-year span, the business sector has been the largest performer of R&D in Malaysia (Figure 3.2). In 2011, the business enterprise is estimated to have spent RM5.3 billion on R&D activities, which was almost four times the estimated amount spent by GRIs (RM1.4 billion) and double that by IHLs (RM2.7 billion) (Figure 3.3). Although they remain the largest performer of R&D in the country, the amount reported for 2011 is a decrease from the previous expenditure of RM5.5 billion in 2010.

Second to the business sector in R&D spending was the higher education sector, consisting of both public and private institutions of higher learning, whose expenditure appears to have increased over the years, recording approximately 29% of the GERD in 2010 and 2011. While the R&D spending of the higher education sector continued to rise, suggesting the increased importance of academia as key players in Malaysia’s R&D, that of the GRIs fluctuated in the range of 5.2% to 14.4% from 2006 to 2011, with 2011 recording the highest spending over the 5-year period. Prior to 2006, GRIs appeared to play a greater role in Malaysia’s R&D but gradually dwindled in this role as the business enterprise assumed greater dominance in R&D.

The observed R&D trends by sector are consistent with those of other countries. The U.S. business sector, for example, accounted for 70% of her gross expenditures on R&D in 2009, while that of Japan accounted for almost 76%. China and South Korea were well above the U.S. level, while France and the United Kingdom were lower, at 62% and 60% respectively .

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http://www.matrade.gov.my/en/foriegn-buyers-section/70-industry-write-up--services/543-ict-industry ICT facts and figures, pg 1; and Frost and Sullivan: http://www.frost.com/prod/servlet/report-brochure.pag?id=4H22-01-00-00-00

3.1.2 Expenditure by Type of Activity

R&D Expenditure by FOR

Malaysia’s R&D activities were spread out over the study of ICT, engineering and technology, natural sciences, agriculture and forestry, biotechnology, medical and health sciences, social sciences, humanities, and economics, business, and management. In 2011, based on the information obtained from the number of companies that responded to the survey (See Sections 2.4 and 2.4.1), she invested the most in ICT research, estimated at 38.3% of the GERD, or RM3.6 billion. This finding parallels the fact that presently, ICT has become the key driver of the Government’s Economic Transformation Programmes , contributing 9.8% to the national GDP in 2009 . The second highest R&D expenditure was in the field of Engineering and Technology, estimated at 24.2% of the GERD, or RM2.3 billion (Figure 3.4).

Figure 3.2: R&D Expenditure by Sector (2000-2011)

25.0

20.3

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2011

Percentage (%)

Year

GRI IHL BUSINESS ENTERPRISE

BUSINESS ENTERPRISE

56.7% (RM5.3 billion)

IHL 28.9%

(RM2.7 billion)

GRI 14.4%

(RM1.4 billion

Figure 3.3: R&D Expenditure by Sector (2011)

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The natural sciences received close to 13% (RM1.2 billion) of the financial share, while agriculture and forestry had a share of slightly more than 7% of the total R&D expenditure. Malaysia spent the least on R&D in the areas of Economics, Business and Management (1.46%), Humanities (2.06%) and the Social Sciences (2.68%) in 2011, where research in these areas is not as costly as that in the business-dominated areas such as ICT and Engineering and Technology, where R&D and innovation are regarded as being crucial determinants of competitiveness.

R&D Expenditure by SEO

Sustainable economic development was the prime objective galvanising Malaysia’s R&D activities in 2011, accounting for 41.5% of the GERD (Figure 3.5). Advancement of Knowledge was the second highest SEO for which Malaysian R&D was conducted (19.6%), while Advanced Experimental and Applied Science was the third highest SEO (16.8%). Malaysia geared just a small portion of her R&D (RM217.6 million or 2.31% of GERD) for the purpose of national defence and security. This figure stands in stark contrast to some foreign economies that invest massive amounts annually on defence and security-related R&D, such as the U.S. and Israel.

ICT 38.33% (RM3.6 billion)

Engineering and

Technology 24.21% (RM2.3 billion)

Natural Sciences 12.80% (RM1.2 billion)

Agriculture and Forestry

7.11%

Biotechnology 6.83%

Medical and Health

Sciences 4.50%

Social Sciences

2.68%

Humanities 2.06% Economics,

Business and Management

1.46%

Sustainable Economic

Development 41.46%

Advancement of Knowledge

19.57%

Advanced Experimental and Applied

Science 16.81%

Society 13.78%

Environment 6.08%

Defence and Security

2.31%

Figure 3.4: R&D Expenditure by Field of Research (2011)

Figure 3.5: R&D Expenditure by Socio-Economic Objective (2011)

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Australian Bureau of Statistics; available at http://www.abs.gov.au/ausstats/abs@ .nsf/mf/8112.0 2012 Global R&D Funding Forecast; available at http://battelle.org/ docs/default-document-library/2012globalforecast. pdf

3.1.3 R&D Expenditure by Research Type

In terms of expenditure by research type (Figure 3.6), more than 66.4% of the GERD went into the conduct of applied research (RM6.3 billion), while only about 16.4% (RM1.5 billion) was directed into experimental development. In this regard, Malaysia’s focus differs from that of the U.S. and Australia, which tend to spend significantly more on experimental development research and less on applied R&D. The U.S., for example, reportedly spent 60% of GERD on experimental development, while Australia 80% . However, the percentage that we spent on basic research (17.2%) is very close to that recorded in established economies, for instance the U.S., which spent 18% of her GERD in 2008 on basic research .

3.2 SOURCES OF FUNDS

The major sources of funds for R&D in 2011 were business (55%), estimated at RM5.2 billion, followed closely by the federal government (41.4%), estimated at RM3.9 billion (Figure 3.7). The government plays a major role in R&D, providing incentives for R&D in the form of various grants and double tax deduction to the business sector, and research grants, as well as operating and capital costs to IHLs and GRIs. The bulk of government funding for R&D, however, goes to the GRIs and IHLs, where 99.4% (See Chapter 6, Figure 6.2) of the funds in the GRIs and 86.4% (See Chapter 5, Figure 5.2) of the funds in the IHLs come from government.

Figure 3.6: R&D Expenditure by Type of Research Activity (2011)

Basic 17.18%

(RM1.6 billion)

Applied 66.42%

(RM6.3 billion)

Experimental 16.40% (RM1.5 billion)

13

13

12

12

Summary Report

16

3.3 HUMAN RESOURCE DEVELOPMENT

3.3.1 R&D Personnel and Researchers per 10,000 Labour Force

Since 2008, there has been a marked growth in the country’s R&D manpower (which includes researchers, technicians, and support staff). The total headcount of R&D personnel grew by 137.4%; from 40,840 persons in 2008 to 96,961 persons in 2011 (Figure 3.8). It is worth noting that the 2011 headcount of 96,961 is almost four times the total headcount recorded in 2006 (24,588). Of interest is the total number of researchers, which recorded an increase of 134.6% over the 4-year period. The number of researchers rose sharply from 31,442 persons in 2008 to more than 53,000 and 67,000 in 2009 and 2010 respectively to 73,752 in 2011. In brief, over the 4-year period between 2008 and 2011, the number of researchers has more than tripled.

Similarly, the number of technicians has also increased. From slightly below 2,800 persons in 2008, it almost doubled to 5,135 persons in 2009, and rose further by 157.5% to reach a total of 7,210 persons in 2010. By 2011, the total headcount of technicians increased by 198.4% from that recorded in 2008 (8,347 persons). The same pattern is observed for R&D support staff, whose number increased by 125.1% in 2011 (14,862 persons) from the figure recorded in 2008 (6,601 persons). The most drastic increase in support staff is discerned in 2009, where the growth in number amounted to 82% from that of the previous year.

Figure 3.7: Sources of Funds for National R&D (2011)

Government 41.38%

(RM3.9 billion)

Business Enterprise 55.01% (RM5.2 billion)

IHL 3.14%

Foreign 0.31%

Other 0.16%

Summary Report

17

12. Australian Bureau of Statistics; available at http://www.abs.gov.au/ausstats/abs@ .nsf/mf/8112.0 13. 2012 Global R&D Funding Forecast; available at http://battelle.org/ docs/default-document-library/2012globalforecast. pdf

12

13

3.3.2 Researcher Headcount by Qualifications (2006-2011)

The quality of R&D personnel and the qualifications they hold are instrumental in the advancement of R&D. This is an aspect where Malaysia can aspire to improve in light of future R&D development. In 2011, the number of PhD qualified researchers involved in R&D was estimated at 33,272, close to 45.1% of the total researchers in Malaysia (Figure 3.9). The share of PhDs among researchers, one indicator of researcher quality, was the highest among researchers in the IHLs (See Chapter 5, Figure 5.7). R&D staff with a master’s degree constituted approximately 33.5%, while those with a bachelor’s degree and a diploma approximated 15.7% and 1.8% respectively of the total R&D personnel in 2011.

Figure 3.8: Headcount of Research Personnel and Researchers per 10,000 Labour Force 1

5,02

2

17,

790

23,

092

19,

021

31,

442

53,

304

67,

412

73,

752

2,2

89

3,0

90

2,9

19

1,8

91

2,7

97

5,1

35

7,2

10

8,3

47

5,9

51

4,0

57

4,9

72

3,6

76

6,6

01

12,

014

13,

692

14,

862

15.6 18.0 21.3 17.9

28.5

47.1

55.4 58.2

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

010,00020,00030,00040,00050,00060,00070,00080,000

2000 2002 2004 2006 2008 2009 2010 2011

Rese

arch

ers p

er 1

0,00

0 La

bour

Fo

rce

Head

coun

t

Year Researchers TechniciansSupport Staff Researchers per 10,000 Labour Force

35, 000

30, 000

25, 000

20, 000

15, 000

10, 000

5, 000

02006

PhD Master Bachelor Non - Degree/ Diploma Not Specified Year

2008 2009 2010 2011

7,00

15,

337

5,14

81,

535

11, 5

5010

,303

8,11

51,

474 19

,799

20,7

049,

487

2,09

01,

224

29,1

8923

,340

11,3

362,

041

1,50

6

33, 2

7224

,691

11,5

651,

319

2,90

5

Head

coun

t

Figure 3.9: Headcount of Researchers by Qualifications (2006-2011)

Summary Report

18

3.3.3 Researcher Headcount by Gender (2000-2011)

An analysis of researchers by gender shows that female participation in R&D has steadily increased over the years. In 2008, women accounted for 40.9% of Malaysia’s R&D workforce, which was 3.2% higher than that in 2006 (Figure 3.10). Female researchers further increased in number in 2009, accounting for slightly more than half of the workforce (50.9%). This is the highest female participation recorded in the Malaysian R&D scene over an 11-year span since 2000, where female researchers actually outnumbered their male counterparts. The figures then dropped slightly to 48.8% and 48.7% respectively in 2010 and 2011. However the figures show that male and female participation in Malaysia’s R&D is about equal.

3.3.4 Researcher Intensity and Full-time Equivalence (FTE)

Researcher intensity is measured by full-time equivalence (FTE) as a percentage of the labour force or volume of work put into R&D. The measurement of FTE is based on an estimation of the amount of time in a year that a research personnel devotes to R&D. As a rule of thumb, the greater the FTE of research personnel, the greater is his or her R&D intensity. Commensurate with the rise in total research personnel headcount (see Figure 3.8), Malaysian FTE also indicates a substantial increase over time. Figure 3.11 shows a considerable growth of total FTE from 2006 (13,415.90) particularly, to 2011 (57,404.89). This was largely brought about by the marked increase in researcher FTE, which grew by 387.3% over the 11-year period (2000-2011). On the other hand, the FTEs of technicians and support staff remained relatively constant from 2000 to 2009, but showed a small growth in 2010 and 2011.

Figure 3.10: Headcount of Researchers by Gender (2000-2011)

5,097 5,996 8,275 7,162 12,864 27,137 32,890 35,938

9,925 11,794 14,817 11,859

18,578

26,167

34,522 37,814 33.9 33.7 35.8 37.7

40.9

50.9 48.8 48.7

0.0

10.0

20.0

30.0

40.0

50.0

60.0

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2000 2002 2004 2006 2008 2009 2010 2011

Perc

enta

ge (%

)

Head

coun

t

Year

Female Researchers Male Researchers Proportion of Female R&D Researchers

Summary Report

19

3.4 CONCLUSION

The upward trends in GERD, research intensity or GERD/GDP, R&D personnel, and researcher intensity build a good prospect for Malaysia’s participation in the global economy and help to pave the way for greater economic competitiveness. With increasing public and private sector investment in R&D over the years, Malaysia has made great strides in growing her capability in research and innovation, and developing tangible manpower for economic competitiveness, hence moving closer towards establishing a knowledge-based society

Figure 3.11: FTE of Research Personnel (2000-2011)

6,4

22.7

0

7,1

57.5

4

12,

669.

49

9,6

94.2

0

16,

344.

53

29,

608.

18

41,

253.

37

47,

242.

10

921

.50

1,3

78.8

0

1,5

97.8

0

1,1

42.5

0

1,8

65.0

6

1,9

86.4

9

3,6

75.6

2

4,5

48.8

9

2,7

15.5

0

2,1

94.7

0

3,6

19.3

0

2,5

79.2

0

4,0

77.7

0

3,8

66.7

6

5,5

54.9

9

5,6

13.9

0 10,059.70 10,731.04 17,886.59 13,415.90 22,287.29

35,461.43

50,483.98 57,404.89

0.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.00

2000 2002 2004 2006 2008 2009 2010 2011

FTE

Year RESEARCHERS TECHNICIANSSUPPORT STAFF TOTAL FTE OF RESEARCH PERSONNEL

ICT (38.3%)












CHAPTER 4:

R&D IN THE BUSINESS ENTERPRISE

CHAPTER 4: R&D IN THE BUSINESS ENTERPRISE

4.0 INTRODUCTION

The business enterprise is considered a primary driver of Malaysia’s economic growth. In order to support the business enterprise and boost its growth potential, the government is undertaking a series of initiatives such as modernising business regulations, liberalising the services sector, removing market distortions by rationalising subsidies, introducing competition legislation, and improving the interface between government and business. The economic growth is expected to stimulate the business enterprise to increase its investments in R&D, subsequently reducing its dependence on federal assistance in line with Malaysia’s need to develop a strong, aggressive, and highly motivated business sector. This chapter reports on the R&D activities in the business enterprise based on the participation of 1,128 R&D performing companies in 2009, 1,171 in 2010, and 1,242 in 2011.

4.1 BUSINESS EXPENDITURE ON R&D (BERD)

4.1.1 Expenditure by Type of Cost

In 2011, the business enterprise spent an estimated RM5.3 billion in R&D (Figure 4.1). The total R&D expenditure in the business enterprise (BERD) grew steadily from RM967.9 million in 2000 to RM5.5 billion in 2010, but dropped to RM5.3 billion in 2011. This is due to the fact that 327 companies spent less on R&D in 2011 than they did in 2010. From 2002 to 2011, the bulk of business expenditure on R&D went into current costs, which includes labour and operating costs.

Figure 4.1: R&D Expenditure by Current and Capital Cost (2000-2011)

370.

6

932.

7

1,59

9.1

2,86

0.3

3,58

6.8

4,05

4.1

4,30

4.0

4,02

7.3

597.

3

700.

3

434.

3

236.

1

692.

6

975.

4

1,22

7.5

1,31

1.7 967.9

1,633.0

2,033.4

3,096.4

4,279.4

5,029.5

5,531.5 5,339.0

0.0

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

2000 2002 2004 2006 2008 2009 2010 2011

RM M

illio

n

Year Current Capital Total

20Summary Report

Summary Report

21

The IMD World Competitiveness Yearbook (2012)

4.1.2 Expenditure by Sector

Of the gross R&D expenditure in 2011, it is estimated that 56.7% was contributed by the business enterprise (Figure 4.2). Institutions of higher learning contributed an estimated 28.9% of the expenditure, while government research institutes (GRIs) contributed an estimated 14.4%. As is the case in many developed countries such as Japan, Korea, the U.S., and Germany , our business enterprise has consistently dominated R&D spending from 2000 to 2011. However, although it still remains the highest spending sector in terms of R&D (Figure 4.3), its share of the total declined from 70.5% in 2008 to 56.7% in 2011, while that of the IHLs rose from 19.6% in 2008 to 28.9% in 2011.

14

Figure 4.2: Distribution of R&D Expenditures by Sector (2000-2011)

25.0

20.3

10.4

5.2

9.9

6.4

6.0

14.4

17.1

14.4

18.0

9.9

19.6

23.7

29.0

28.9

57.9

65.3

71.5

84.9

70.5

69.9

65.0

56.7

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0

2000

2002

2004

2006

2008

2009

2010

2011

Percentage (%)

Year

GRI IHL BUSINESS ENTERPRISE

Figure 4.3: Expenditure by Sector (2002-2011)

507

.1

296

.9

189

.5

603

.1

459

.3

514

.8

1,3

57.4

360

.4

513

.3

360

.8

1,1

88.3

1,7

11.1

2,4

64.4

2,7

25.6

1,6

33.1

2,0

33.5

3,0

96.4

4,2

79.4

5,0

29.5

5,5

31.5

5,3

39.0

2,500.6

2,843.7

3,646.7

6,070.8

7,199.9

8,510.7 9,422.0

0.0

2,000.0

4,000.0

6,000.0

8,000.0

10,000.0

2002 2004 2006 2008 2009 2010 2011

Year GRI IHL Business Enterprise Total

RM (M

illio

n)

14

Summary Report

22

http://www.matrade.gov.my/en/foriegn-buyers-section/70-industry-write-up--services/543-ict-industryICT facts and figures, pg 1; and Frost and Sullivan: http://www.frost.com/prod/servlet/report-brochure.pag?id=4H22-01-00-00-00

4.1.3 R&D Expenditure by Type of Research

Figure 4.4 shows R&D expenditure in the business sector by type of research. The highest expenditure in 2011 was on applied research (RM4.3 billion), followed by that on experimental development (RM895.3 million), and basic research (RM181.4 million). The focus on applied research befits the business enterprise considering that applied research seeks to address and answer issues or problems that typically lead to commercialisation. The statistics indicate a slight decrease in the R&D expenditure of the business enterprise in applied research, down from RM4.8 billion in 2009 to RM4.5 billion in 2010. The R&D expenditure for experimental development, on the other hand, charted an increase; from RM122.3 million in 2009 to RM837.7 million in 2010, and RM895.3 million in 2011. This is a positive development, as the production of patents and the degree of innovativeness within a country are often associated with the amount of experimental development conducted within sectors of the economy, as observed among giant economies with high degrees of innovativeness such as Denmark, the U.S., Sweden, etc.

4.1.4 Expenditure by FOR and SEO

Based on the number of companies that responded to the survey, it is estimated that in 2011, the bulk of the business sector’s R&D expenditure (63.7%) went into ICT research (Table 4.1). This finding parallels the fact that ICT has become an important sector in Malaysia’s economic development ever since the Government incorporated it in as one of the strategies towards creating an industrial-based economy, as articulated in the Second Outline Perspective Plan 1991-2000, and consequently, a knowledge-based economy, as outlined in the Third Outline Perspective Plan 2001-2010. Presently, ICT has become the key driver of Malaysia’s Economic Transformation Programmes , contributing 9.8% to the national GDP in 2009, and targeted to increase to 10.2% by 2015 .

Figure 4.4: Expenditure by Type of Research (2000 - 2011)

306

.65

57.

30

246

.10

233

.10

160

.48

119

.80

226

.17

181

.41

514

.04

1,3

13.5

0

1,1

43.4

0

1,3

55.0

0

3,5

99.2

2

4,7

87.4

0

4,4

67.6

7

4,2

62.2

0

147

.21

262

.30

644

.00

1,5

08.3

0

519

.70

122

.30

837

.65

895

.33

0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

2000 2002 2004 2006 2008 2009 2010 2011

RM M

illio

n

Year Basic Applied Experimental Development

15

15

16

16

Summary Report

23

Inland Revenue Board of Malaysia (IRBM)

The second highest expenditure on R&D was on engineering and technology (23.9%), followed by biotechnology (8.1%). In comparison, smaller amounts were spent on research in the natural sciences (2.5%) and agriculture and forestry (1.7%), while the least went into medical and health sciences (0.2%) and economics, business, and management (0.02%).

On the other hand, the leading socio-economic objectives for which business R&D was conducted in 2011 (Table 4.2) were sustainable economic development (44.0%), advancement of knowledge (21.5%), and advanced experimental and applied science (11.7%). Society, environment, and defence and security represented lesser SEOs, constituting an estimated 9.9%, 8.9%, and 4.0% respectively of the 2011 BERD. The expenditures reflected in these FORs and SEOs were in line with Malaysia’s greater push for the economic viability and scientific stock of knowledge much needed to establish and sustain a knowledge-based economy.

4.2 SOURCES OF FUNDS FOR R&D IN THE BUSINESS ENTERPRISE The companies reported that they relied heavily on their own funds to conduct R&D activities (Figure 4.4). Consistently across 2006 to 2011, the utilization of company’s own funds to support R&D activities constituted more than 90% of total spending. Federal funding contributed between 0.28% (2006) and 9.41% (2010) to business R&D, while funding from foreign and other sources was very small and almost negligible. Although the business enterprise reported relying much on its own funds to conduct R&D activities, it did, in fact, receive substantial federal support for its R&D from incentives such as double tax deduction and other tax incentives. Federal support for business R&D has always been in the backdrop, with the government regularly channelling provisions of financial incentives in myriad forms. The total tax deduction submitted by the business enterprise to the Inland Revenue Board of Malaysia (LHDN) was estimated at RM90.0 million in 2011, RM136.6 million in 2010, and RM142.3 million in 2009 , which are not reflected under Sources of Funds for R&D in the Business Enterprise as shown in Figure 4.5.

Table 4.1: Expenditure by FOR (2011) Table 4.2: Expenditure by SEO (2011)

SEO %

Sustainable Economic Development 44.04

Advancement of Knowledge 21.48

Advanced Experimental and Applied Science 11.74

Society 9.90

Environment 8.87

Defence and Security 3.97

FOR % Information, Computer and Communication Technology (ICT)

63.71

Engineering and Technology 23.86

Biotechnology 8.11 Natural Sciences 2.48 Agriculture and Forestry 1.65 Medical and Health Sciences 0.18

Economics, Business, and Management 0.02

17

17

Summary Report

24


4.3.1 R&D Personnel by Headcount

In 2011, the business enterprise reported a total of 10,876 R&D personnel, which was an increase of 10.3% from 2010 and 48.1% from 2009 (Figure 4.6). Of the total R&D manpower in 2011, 6,325 (58.2%) were researchers, 2,821 (25.9%) were technicians, and 1,730 (15.9%) were support staff. The fiscal year 2011 also recorded a high of 2,821 technicians, with some decrease in the number of support staff.

16

15

Figure 4.5: Sources of Funds for R&D in the Business Enterprise (2006-2011)

99.5

1

93.8

1

97.5

4

90.4

8

96.1

5

0.28

6.15

2.43

9.41

3.62

0.21

0.02

0.03

0.11

0.21

0.03

0.02

0

20

40

60

80

100

120

2006 2008 2009 2010 2011

Perc

enta

ge (%

)

Year BUSINESS ENTERPRISE GOVERNMENT OTHER FOREIGN

Figure 4.6: Headcount of Research Personnel in Business Enterprise (2000-2011)

2,30

4

3,34

9 5,94

0

4,16

0

3,6

61

3,7

29

5,74

1

6,32

5

343

764

877

834

973

1,0

77

2,02

9

2,82

1

1,59

9

1,06

4

1,92

0

2,03

1

1,5

32

1,8

49

2,08

8

1,73

0

4,246 5,177

8,737

7,025 6,166

6,655

9,858 10,876

0

2,000

4,000

6,000

8,000

10,000

12,000

2000 2002 2004 2006 2008 2009 2010 2011

Head

coun

t

Year Researchers Technicians Support Staff Headcount

Summary Report

25

Headcount and Proportion of Researchers by Gender

Figure 4.7 indicates the proportion of female to male researchers in the business sector from 2000 to 2011. Of the 6,325 researchers reported in 2011, 1,930 (30.5%) were female, a slight decrease from the reported 1,798 (31.3%) in 2010 and 1,163 (31.2%) in 2009. From 2008 to 2011, the percentage of female researchers was around 30%.

4.3.2 FTE of R&D Personnel

Figure 4.8 reports the full time equivalence of research personnel, which is the amount of time the research personnel spend in a year on R&D. The total FTE of research personnel reported in 2011 was 9,778.0, which was an increase from 9,117.6 in 2010, and 5,763.2 in 2009. The largest FTE was reported by researchers (5,856.8), followed by technicians (2,665.4), and support staff (1,255.8). The FTE of researchers rose from 3,413.0 in 2009 to 5,477.6 in 2010 and 5,856.8 in 2011.

Figure 4.7: Proportion of Female Researchers to Male Researchers (2000 - 2011)

1,809 2,528

4,425

3,015 2,568 2,566

3,943 4,395 495

821

1,515

1,145 1,093 1,163

1,798 1,930 21.5

24.5 25.5 27.5

29.9 31.2 31.3 30.5

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2000 2002 2004 2006 2008 2009 2010 2011

Prop

ortio

n (%

)

Head

coun

t

Year Number of Male Researchers Number of Female ResearchersProportion of Female R&D Researchers

Summary Report

26

4.4 CONCLUSION

The total R&D expenditure for the business enterprise demonstrates an upward trend from 2000 to 2010; however, the 2011 data indicate a slight decrease of 3.5% in R&D spending to RM5.3 billion, from RM5.5 billion in 2010. Even though the data on the sources of funds indicate that the business enterprise was the major funder of its R&D activities (96.2% in 2011), the government’s enormous financial assistance in terms of double tax deduction amounting to RM90.0 million in 2011, provides a more accurate picture of government support for R&D. The data on business R&D manpower also revealed a steady increase in the total number of research personnel from 6,655 in 2009 to 10,876 in 2011.

Figure 4.8: FTE of Research Personnel (2000 - 2011)

1,98

3.00

2,76

7.10

4,10

4.30

3,52

9.30

3,3

20.7

0

3,4

13.0

4

5,4

77.6

2

5,8

56.7

7

241.

50

621.

90

647.

68

611.

90

883

.20

925

.17

1,9

16.0

8

2,6

65.4

4

1,13

2.50

877.

70

1,37

5.22

1,48

6.64

1,3

71.8

0

1,4

24.9

5

1,7

23.8

7

1,2

55.8

0

3,357.00

4,266.70

6,127.20

5,627.84

5,575.70

5,763.16

9,117.57 9,778.01

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

2000 2002 2004 2006 2008 2009 2010 2011

FTE

Year Researchers Technicians Support Staff Total

ICT (38.3%)












CHAPTER 5:

R&D IN THE INSTITUTIONS OF HIGHER

LEARNING (IHLs)

Summary Report

27

CHAPTER 5: R&D IN THE INSTITUTIONS OF HIGHER LEARNING (IHLs)

5.0 INTRODUCTION

R&D activities in the higher education sector are an important means of expanding existing knowledge and generating new insights, solutions, and products for local consumption and the international market. They also help to develop the nation’s R&D manpower capability by serving as a platform to train and produce future scientists, researchers, technicians and related research personnel. At institutions of higher learning (IHLs), knowledge is shared, put to the test, verified, developed into applications, and rendered as products. In the process, new knowledge is created and skills are transferred. Hence, IHLs through their R&D activities play an unequivocal role in contributing to economic growth and national development. These activities should, therefore, be captured and reported appropriately to reflect this important role. This chapter presents the R&D statistics of Malaysian IHLs in terms of total R&D expenditure, sources of funds, research area concentration and type, and research personnel.


5.1.1 R&D Expenditure by Type of Cost

All of the IHLs surveyed reported that they conduct R&D activities in one form or another. In 2011, the IHLs spent an estimated RM2.7 billion on R&D activities (Figure 5.1). The estimated total R&D expenditure in the IHLs posted a steady growth from RM1.2 billion in 2008 to RM1.7 billion in 2009, RM2.5 billion in 2010, and RM2.7 billion in 2011. Since 2006, the growth in expenditure on academic R&D has been distinct, increasing by 229.4% in 2008, a further 44.0% in 2009, 44.0% in 2010, and 10.6% in 2011; suggesting an increase in R&D intensity in IHLs over the years.

Figure 5.1: R&D Expenditure by Current Cost and Capital Cost (2000-2011)

144.

0

209.

8

401.

2

305.

4

1,07

7.8

1,4

88.9

2,0

93.8

2,28

7.2

142.

1

150.

6

112.

1

55.4

110.

5

222

.2

370

.6

438.

4

286.1

360.4 513.3

360.8

1,188.3

1,711.1

2,464.4

2,725.6

0.0

500.0

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0

2000 2002 2004 2006 2008 2009 2010 2011

RM (M

illio

n)

Year Current Expenditure Capital Expenditure Total Expenditure

Summary Report

28

Science and Engineering Indicators 20127 Data obtained from Inland Revenue Board of Malaysia (IRBM)


As is the case in many advanced countries such as the U.S., France, and South Korea , basic research continues to dominate academic R&D in Malaysia (Figure 5.2). Basic research is important to the IHLs as it extends the frontiers of knowledge, links graduate education and research, prepares the next generation of researchers, provides a strong grounding for applied and experimental development research, and strengthens innovation capacity. In 2011, spending on basic research took up the biggest portion of the total expenditure on R&D, amounting to RM1.3 billion or 48.8% of the GERD. Lesser amounts were expended on applied research (RM1.1 billion or 41%) and experimental development (RM278.5 million or 10.2%). Since 2006, there has been a steady growth in the R&D expenditures for basic and applied research in the IHLs, suggesting greater research intensity in Malaysian higher learning institutions and an increasing role of Malaysian academia as key players in national R&D.

5.1.3 R&D Expenditure by FOR and SEO

R&D Expenditure according to Field of Research (FOR)

As shown in Table 5.1, more than one-third of the expenditure in the IHLs is concentrated in the field of engineering and technology (34.4%), while 15.8% and 13.1% are concentrated in the natural sciences and the medical and health sciences respectively. The social sciences, ICT, humanities, biotechnology, economics, business and management, and agriculture and forestry all account for less than 9% each. It should also be noted that while it is an important sector of the economy, ICT accounts for only 7.5% of the expenditure of higher education R&D.

Figure 5.2: Expenditure by Type of Research (2000 - 2011)

103

.96

111

.30

162

.60

133

.70

527

.10

836

.00

1,1

97.7

0

1,3

30.8

9

146

.90

135

.20

237

.20

179

.90

499

.40

749

.40

961

.80

1,1

16.2

1

35.

28

114

.00

113

.50

47.

20

161

.80

125

.70

304

.90

278

.51

0.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

2000 2002 2004 2006 2008 2009 2010 2011

RM (M

illio

n )

Year Basic Applied Experimental

18

18

Summary Report

29

R&D Expenditure according to Socio-Economic Objectives (SEO)

In terms of SEO, academic R&D is almost evenly spread out across four main objectives related to Society (25.5%), Advanced Experimental and Applied Science (24.6%), Sustainable Economic Development (23.7%), and Advancement of Knowledge (23.4%) (Table 5.2). Higher-education expenditures on R&D activities related to the Environment (2.6%) and Defence and Security (0.2%) are marginal.


For the 2011 fiscal year, the federal government was reported by the IHLs as being the main provider of R&D funds (86.4%), as has been the case for the past three years. Academic R&D was also supported by the IHLs’ own funds (10.9%) and funds from the business sector (1.8%), although these amounts were very small compared to those provided by federal funds. The funding received from foreign bodies or other sources accounted for less than 1% each (Figure 5.3). The data highlight the ever important role of the federal government as a consistent provider of funds for academic R&D.

Table 5.1: Expenditure According to Field of Research (2011)

Table 5.2: Expenditure According to Socio-Economic Objectives (2011)

SEO %

Society 25.5




Environment 2.6


FOR % Engineering and Technology 34.4

Natural Sciences 15.8 Medical and Health Sciences 13.1

Social Sciences 8.9 ICT 7.5 Humanities 7.1 Biotechnology 5.1 Economics, Business and Management 4.6

Agriculture and Forestry 3.5

Summary Report

30


5.3.1 Research Personnel

The data in Figure 5.4 indicate that 78,683 research personnel were involved in R&D activities in the higher education sector in 2011. The total research personnel headcount for IHLs demonstrates an encouraging upward trend; from 28,775 in 2008 to 57,437 in 2009, and 71,579 in 2010. An overwhelming majority of this number were researchers, with appreciably much smaller headcounts of technicians and support staff. In 2011, 81.7% (64,253) of the total headcount were researchers (Figure 5.4).

18

Figure 5.3: Sources of Funds for R&D in the IHLs (2008 - 2011)

91.3

5

80.4

9

83.9

3

86.4

4

1.64

1.51

2.66

1.79

3.80

17.1

6

12.2

6

10.8

6

0.46

0.79

1.12

0.88

2.75

0.04

0.04

0.03

0.0010.0020.0030.0040.0050.0060.0070.0080.0090.00

100.00

2008 2009 2010 2011

Perc

enta

ge (%

)

Year Government Business Enterprise IHL Foreign Other

Figure 5.4: Headcount of Research Personnel (2000 - 2010)

8,9

09

10,

527

12,

805

12,1

52

24,

131

46,

709

58,

699

64,

253

808

913

679

335

985

3,0

32

4,1

25

4,4

22

1,5

22

1,0

98

1,3

25

520

3,6

59

7,6

96

8,7

55

10,

008

11,239 12,538 14,809 13,007

28,775

57,437

71,579 78,683

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

2000 2002 2004 2006 2008 2009 2010

Head

coun

t

Year

Researchers Technicians Support Staff Total Headcount

Summary Report

31

5.3.2 Headcount and Proportion of Researchers by Gender

Figure 5.5 shows the distribution of male and female researchers in Malaysian IHLs. The figures indicate that the percentage of female researchers was highest in 2009 (52.4%), rising more than ten percentage points compared to the previous years. In fact, between 2009 and 2011, the proportion of female to male researchers is almost equal, with female researchers outnumbering their male counterparts by a very small margin. The increase in the proportion of female relative to male researchers is reflective of the increased number of female academics in institutions of higher learning.

5.3.3 FTE of Research Personnel

Figure 5.6 shows a rising trend in research personnel FTE, the amount of time in a year research personnel spends on R&D, from 13,702.5 in 2008 to 26,080.8 in 2009 to 37,251.5 in 2010. The research personnel FTE reveals an increase of 90.3% from 2008 to 2009, and 42.8% from 2009 to 2010. The FTE of technicians also shows an upward trend, from 479.4 in 2008 to 607.6 in 2009, 1,291.8 in 2010, to 1,399.3 in 2011. In 2011, the FTE of research personnel in the IHLs is estimated to be 43,147.2.


3,465 3,772 5,092 4,880 10,136 24,469 29,557 32,344

5,444 6,755 7,713 7,272

13,995

22,240

29,142 31,909

38.9 35.8

39.8 40.2 42.0

52.4 50.4 50.3

0.0

10.0

20.0

30.0

40.0

50.0

60.0

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2000 2002 2004 2006 2008 2009 2010 2011

Prop

ortio

n (%

)

Head

coun

t

Year Number of Female Researchers Number of Male ResearchersProportion of Female R&D Researchers

Summary Report

32

In terms of qualifications, the 2011 data show that slightly over half of the researchers (50.8%) had doctoral degrees, 36.2% had master’s degrees, 12.2% had bachelor’s degrees, and 0.7% held diplomas or other non-degree qualifications (Figure 5.7). The proportion of researchers holding doctoral degrees increased from 41.3% in 2009 to 48.6% in 2010, and 50.8% in 2011; while the proportion of researchers holding master’s degrees decreased from 42.1 % in 2009, to 37.4% in 2010, and 36.2% in 2011.


3,14

1.40

3,18

7.00

6,43

4.40

5,09

6.75

11,4

57.6

0

23,9

23.6

0

33,3

72.7

5

38,8

33.2

5

218.

10

248.

70 267.

90

119.

19

479.

43

607.

60

1,29

1.80

1,39

9.30

378.

50

376.

20

1,03

5.80

222.

08

1,76

5.47

1,54

9.57

2,58

6.90

2,91

4.60

3,738.00 3,811.90 7,738.10 5,438.02

13,702.50

26,080.77

37,251.45 43,147.15

0.005,000.00

10,000.0015,000.0020,000.0025,000.0030,000.0035,000.0040,000.0045,000.0050,000.00

2000 2002 2004 2006 2008 2009 2010 2011

FTE

Year Researchers Technicians Support Staff Total FTE

Figure 5.7: Proportion of Researchers by Qualifications (2000 - 2011)

34.2 41.9 36.4 49.8

41.0 41.3 48.6 50.8

22.8

30.6 38.2

33.9 36.9 42.1

37.4 36.2 29.4

25.7 22.6 15.3 20.5 15.1 13.4 12.2 13.7

1.8 2.8 1.0 1.5 1.4 0.6 0.7

0.0

20.0

40.0

60.0

80.0

100.0

120.0

2000 2002 2004 2006 2008 2009 2010 2011

Perc

enta

ge (%

)

Year

PhD Master Bachelor Non-Degree / Diploma

Summary Report

33

5.4 CONCLUSION

The total R&D expenditure for the IHLs indicates an upward trend; from an estimated RM360.8 million in 2006 to an estimated RM2.7 billion in 2011. Notable increases in federal funding for IHLs reveal continued government support for academic R&D. Likewise, there is a steady increase in researcher headcount from 28,775 in 2008 to 78,683 in 2011. The R&D expenditure on basic research also highlights the important role of IHLs in promoting graduate education and research, strengthening innovation capacity, and preparing the next generation of researchers. The uninterrupted growth in R&D spending in the IHLs undoubtedly reflects the policy of the Ministry of Education (MOE) in advancing the research university agenda based on the National Higher Education Strategic Plan 2007 -2010.

ICT (38.3%)












CHAPTER 6:

R&D IN THEGOVERNMENT AGENCIES

AND RESEARCH INSTITUTES (GRIs)

Summary Report

34

CHAPTER 6: R&D IN THE GOVERNMENT AGENCIES AND RESEARCH INSTITUTES (GRIs)

6.0 INTRODUCTION

The GRIs in Malaysia provide an important input to industrial and commercial innovation by researching and developing strategic areas and ideas that have bottom-line relevance to the government. In lieu of this, the GRIs are important components of the national innovation system, where their objective is not only to help the local industry but also the socio-economic development of the country. This chapter presents the R&D activities in the government agencies and research institutes in Malaysia from 2000 to 2011. The chapter discusses R&D expenditure in the GRIs based on the participation of 33 GRIs in the year 2009, 34 in 2010, and 40 in 2011, representing response rates of 96.5%, 97%, and 100% respectively.


6.1.1 R&D Expenditure by Type of Cost

Between 2002 and 2006, R&D expenditure in the GRIs showed a significant decline, from an estimated RM507.1 million in 2002 to approximately RM189.5 million in 2006 (Figure 6.1). Total expenditure grew significantly from RM189.5 million to an estimated RM603.1 million in 2008, but declined to RM459.3 million in 2009. In 2010, it rose to RM514.8 million, and in 2011, R&D expenditure surged to approximately RM1.4 billion. With the exception of 2002 and 2011, where capital expenditure was three times that of current expenditure, most of the expenditure was on current costs. Indeed, in 2011, capital expenditure was three times that of current expenditure.

Figure 6.1: Expenditure by Current and Capital Cost

292.

5

232.

7

196.

3

132.

0

469.

5

330

.9

334

.7

359.

5

124.

9

274.

4

100.

6

57.5

133.

6

128

.4

180

.1 99

7.9 417.4

507.1 296.9

189.5

603.1 459.3 514.8

1,357.4

0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

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1,600.0

2000 2002 2004 2006 2008 2009 2010 2011

RM M

illio

n

Year Current Expenditure Capital Expenditure Total Expenditure

Summary Report

35


From 2000 to 2011, the research in the GRIs was mostly focused on applied research. The highest expenditure on applied research was in 2011, at an estimated RM879.9 million. From 2008 to 2011, the expenditure for applied research was almost doubles that of basic and experimental development (Figure 6.2).

6.1.3 R&D Expenditure by FOR and SEO

True to the objectives for which they were set up, the GRIs invested the most in research in the natural sciences, estimated at 47.4% of the GERD (RM643.7 million), and in agricultural and forestry, estimated at 35.8% of the GERD (RM486.0 million) (Table 6.1). They spent the least on R&D in the areas of ICT (0.33%), Economics, Business and Management (0.84%), and the Social Sciences (0.82%) in 2011. As shown in Table 6.2, sustainable economic development was the prime objective galvanizing R&D activities in the GRIs in 2011, accounting for 66.94% of the GERD. Advanced experimental and applied science was the second highest SEO for which R&D was conducted (21.09%), while society was the third highest SEO (5.51%). The GRIs geared just a small portion of her R&D (0.06% of GERD) for the purpose of national defence and security.

Figure 6.2: Expenditure by Type of Research (2000-2011)

41.

34

41.

00

53.

30

44.

60

65.

20

92.

54

100

.13

106

.00

191

.20

266

.10

190

.30

110

.30

490

.90

325

.17

373

.13

879

.89

184

.94

200

.10

53.

30

34.

60

47.

00

41.

61

41.

55

371

.56

0.00

100.00200.00300.00400.00500.00600.00700.00800.00900.00

1,000.00

2000 2002 2004 2006 2008 2009 2010 2011

RM M

illio

n

Year Basic Applied Experimental

Summary Report

36


The federal government has been the major provider of R&D funds for Malaysian GRIs since 2006 (Figure 6.3), providing more than 95% of the funding over the years, with the exception of 2008 where the government contributed 85.1%. Since 2006, foreign funding and institutions of higher learning have been contributing less than 3% of the total funds for the R&D activities.

Table 6.1: Expenditure According to Field of Research (2011)

SEO %



Society 5.51


Environment 2.11


FOR %

Natural Sciences 47.42 Agriculture and Forestry 35.80 Biotechnology 5.29 Engineering and Technology 5.15

Medical and Health Sciences 4.34

Economics, Business and Management 0.84

Social Sciences 0.82 Information, Computer and Communication Technology (ICT)

0.33

Humanities 0.01

Table 6.2: Expenditure According to Socio-Economic Objectives (2011)

Figure 6.3: GRI Sources of Funds (2006-2011)

0.3

0.1

0.1

95.4

85.1

98.7

99.2

99.4

2.4

0.7

0.5

0.3 2.2

14.9

0.3

0.2

0.2

0102030405060708090

100

2006 2008 2009 2010 2011

Perc

enta

ge (%

)

Year Business Enterprise Government Higher Education Foreign Other

Summary Report

37


6.3.1 Headcount of Research Personnel

The total headcount for research personnel in the GRIs dropped sharply (by 41.4%) from 7,777 in 2000 to 4,556 in 2006 (Figure 6.4). From 2006 to 2011, research personnel headcount increased steadily, and as of 2011, there were 7,402 research personnel engaged in R&D activities. The highest headcount for researchers (4,347) was recorded in 2004, but this figure dropped significantly to 2,709 in 2006.

6.3.2 Proportion of Researchers According to Gender

It is important to note the growing number of female researchers in the GRIs since 2000. In terms of proportion to males, female participation in R&D activities in the GRIs increased from 29.9% in 2000 to 52.4% in 2011, recording a slightly greater proportion of female to male researchers between 2009 to 2011 (Figure 6.5). The substantial rise in female representation in the R&D workforce meets the national expectation that more women participate in the economy following improved educational and employment opportunities provided by the government and other sectors in the country.

Figure 6.4: Headcount of Research Personnel (2000 - 2011)

3,80

9

3,91

4

4,34

7

2,70

9

3,6

50

2,8

66

2,9

72

3,1

74

1,13

8

1,41

3

1,36

3

722

839

1,0

26

1,0

56

1,1

04

2,83

0

1,89

5

1,72

7

1,12

5

1,4

10

2,4

69

2,8

49

3,1

24

7,777 7,222 7,437

4,556

5,899 6,361

6,877 7,402

01,0002,0003,0004,0005,0006,0007,0008,0009,000

2000 2002 2004 2006 2008 2009 2010 2011

Head

coun

t

Year Researchers Technicians Support Staff Headcount

Summary Report

38

6.3.3 FTE of Research Personnel

The total FTE of research personnel in the GRIs, or the amount of time in a year they spend on R&D, declined from 2000 to 2002. In 2004, there was a sharp increase in researcher FTE to 4,021.3 before it fell sharply in 2006 to 2,350. From 2006, researcher FTE continued to rise, reaching a high of 4,479.73 in 2011, with researcher FTE being the highest, at 2,552.08, followed by that of supporting staff at 1,443.50. It is important to mention that from 2000 to 2011, researchers had the highest proportion of research personnel FTE. (Figure 6.6).


2,672 2,511 2,679 1,572 2,015

1,361 1,437 1,510

1,137 1,403 1,668

1,137

1,635

1,505 1,535 1,664

29.9

35.8 38.4 42.0 44.8

52.5 51.6 52.4

0

10

20

30

40

50

60

0

1,000

2,000

3,000

4,000

5,000

2000 2002 2004 2006 2008 2009 2010 2011

Head

coun

t

Year Number of Male Researchers Number of Female ResearchersProportion of Female Researchers


1,29

8.3

1,20

3.5

2,13

0.8

1,0

68.2

1

1,5

66.2

3

2,2

71.5

4

2,4

03.0

0

2,5

52.0

8

461.

9

508.

1

682.

2

411

.44

502

.43

453

.72

467

.74

484

.15

1,20

4.5

940.

8

1,20

8.3

870

.44

940

.43

892

.24

1,2

44.2

2

1,4

43.5

0

2,964.7 2,652.4

4,021.3

2,350.09

3,009.09 3,617.50

4,114.96 4,479.73

0.0

500.0

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0

3,500.0

4,000.0

4,500.0

5,000.0

2000 2002 2004 2006 2008 2009 2010 2011

FTE

Year Researcher Technician Supp. Staff Total

Summary Report

39

6.4 CONCLUSION

Between 2000 and 2011, R&D expenditure in the GRIs does not display a consistent pattern, with some years experiencing an increase and others a decrease. In particular, significant declines in spending were observed for the periods 2002-2006 and 2008-2009, which might have been due to a lack of funding. Although the government is the major provider of their R&D funds, the GRIs in those periods might have suffered a setback in funding due to two global phenomena: the post-Asian financial crisis in which Malaysia experienced a large depreciation of the ringgit and massive capital flight, and the global recession that hit Malaysia in 2008. These periods saw not just Asian countries but also the entire world going through a period of reduced economic activity as a result of a slowed economy. However, given the fact that the objective of the GRIs is to help the local industry and the socio-economic development of the country, it is important that a consistent flow of adequate funding for R&D be maintained so that these objectives may be realised.

ICT (38.3%)












CHAPTER 7:

INTERNATIONALCOMPARISONS

40Summary Report

Frantzen, Dirk, 2000, “R&D, Human Capital and International Technology Spillovers: A Cross Country Analysis,”Scandinavian Journal of Economics, 102 ,pp. 57-75; and Griffith Rachel, Stephen Redding, and John Van Reenen, 2004, “Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Countries,” Review of Economics and Statistics, 86 ,pp. 883-895Griliches, Z. (1992). “The Search for R&D Spillovers,” Scandinavian Journal of Economics, 94, pp. 29-47.Australia, Austria, Belgium, Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Iceland, Ireland, Israel, Italy, Japan, Luxembourg, Malta, Netherlands, New Zealand, Norway, Portugal, San Marino, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, Taiwan, United Kingdom, United States.

CHAPTER 7: INTERNATIONAL COMPARISONS

7.0 INTRODUCTION

International panel data studies have shown a positive relationship between R&D activities and productivity growth , and estimates of social returns on R&D have clustered in the range of 20 to 60 per cent, making R&D a major source of growth , responsible for at least half of all increases in per capita output . These suggest that R&D plays a central role as the engine of a country’s growth and development. Hence, a comparison of Malaysia’s R&D activities vis-à-vis developed nations will help to indicate her potential and to achieve a developed nation status by 2020.

This chapter compares Malaysia’s R&D activities with those of selected countries in the East and South East Asian region and the advanced economies . These country groups were selected for comparison in this chapter to address the objectives of the national R&D survey, which were to compare Malaysia’s R&D activities with those in the East Asian region, and benchmark her R&D achievement with that of developed nations. The comparison also aims to provide a broad picture of the distribution of R&D activities in the East Asian region and around the world.

The International data used for the analysis in this chapter were obtained from the IMD World Competitiveness Yearbook 2012 (WCY) and the UNESCO Institute of Statistics. However, the Malaysian R&D indicators published in the WCY 2012 are estimated data, based on extrapolations of previous values. Hence, most of the charts in this chapter show two different numbers to represent Malaysia’s R&D indicators, the first being indicators from the National R&D survey 2012 (marked as MALAYSIA*), and the second being estimated figures from the IMD World Competitiveness Yearbook 2012 (marked as MALAYSIA**).

7.1 GROSS EXPENDITURE ON R&D ACROSS COUNTRIES

The gross expenditure on R&D (GERD) is used as an indicator of a country’s R&D activities. It is based on the expectation that the higher a country’s R&D expenditure is, the greater are its R&D activities.

19

20

21

19

20

21

41Summary Report

As highlighted in Figure 7.1, global R&D expenditure is concentrated in mainly two countries, the U.S. and Japan. China, in third place, is estimated to have spent a fourth of the amount spent by the USA, while Germany, France, the United Kingdom, Korea, and Canada follow closely behind. Malaysia’s GERD of USD3.1 billion as obtained from the National R&D survey 2012 places her between the Czech Republic (32) and South Africa (33), although her GERD as estimated by the WCY ranks her in the 34th place.

Malaysia’s GERD, estimated at USD3.1 billion, is much smaller than those of advanced economies as well as those of the Newly Industrializing Economies (NIE) in the East Asian region such as South Korea (USD38.0 billion), Taiwan (USD12.5 billion), and Singapore (USD4.8 billion). In the South East Asian region, it is larger than those of Thailand (USD0.63 billion), Indonesia (USD0.21 billion) and the Philippines (USD0.17 billion), but second to that of Singapore. It should be emphasized that this comparison is intended to show the global distribution of R&D and not a country’s research intensity, as GERD does not take into account the size of the economy and the size of the population. This is reflected by the skewed distribution of global GERD towards that of the U.S., Japan, and China, where the GERD is affected by the size of its population and economy, as further highlighted in Section 7.2.

. Figure 7.1: GERD in Selected Countries (USD Million)

Source: The IMD World Competitiveness Yearbook (2012). Note: MALAYSIA* is the GERD taken from the National R&D survey 2012 while MALAYSIA** is the GERD estimated by WCY. The numbers in parenthesis show the rank of the countries when compared according to their GERD.

401,576 (1) 169,047 (2)

104,318 (3) 92,458 (4)

57,789 (5) 39,858 (6) 37,935 (7)

28,366 (8) 25,878 (9) 24,891 (10) 23,994 (11)

15,707 (14) 14,015 (17) 12,480 (18) 9,567 (20) 7,075 (25) 6,167 (26) 4,759 (27) 3,703 (29) 3,091 (32) 3,079 2,547 (33) 1,885 (34) 1,836 (35) 1,714 (37) 1,527 (38) 627 (45) 268 (53) 220 (55) 209 (56) 166 (57)

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000

USA (2009)JAPAN (2009)

CHINA MAINLAND (2010)GERMANY (2010)

FRANCE (2010)UNITED KINGDOM (2010)

KOREA (2010)CANADA (2010)

ITALY (2010)BRAZIL (2010)

AUSTRALIA (2008)SWEDEN (2010)

INDIA (2010)TAIWAN (2010)

ISRAEL (2010)NORWAY (2010)

TURKEY (2010)SINGAPORE (2010)

IRELAND (2010)CZECH REPUBLIC (2010)

MALAYSIA (2011)*SOUTH AFRICA (2008)

MALAYSIA (2010)**GREECE (2007)

HONG KONG (2010)NEW ZEALAND (2009)

THAILAND (2009)JORDAN (2010)

QATAR (2007)INDONESIA (2010)

PHILIPPINES (2009)

GERD (USD Million)

42Summary Report

7.2 R&D INTENSITY: GERD PER GDP

To make GERD figures comparable across countries, measures of R&D intensity are used. This approach provides a means of adjusting for the differences in the sizes of national economies. One of these measures is the GERD per GDP.

Malaysia’s GERD per GDP for 2011 is 1.07%. This means that the gross expenditure on R&D accounted for 1.07% of Malaysia’s GDP. The country with the highest GERD/GDP is Israel, at 4.41%, while Finland, Korea, Japan, Sweden and Denmark all have GERD/GDP of above 3.0% (Figure 7.2). Among the advanced economies as listed by the WCY, Brazil, Hungary and Russia are the closest to Malaysia, with a GERD per GDP of 1.16%, while the average for the OECD countries stands at 2.3% in 2009. Closer to Malaysia, Singapore recorded a GERD per GDP of 2.09%, twice that of Malaysia, while the GERD/GDP recorded by Thailand, the Philippines and Indonesia is below 0.3%.

Figure 7.2: GERD per GDP (%)

4.41 (1) 3.88 (2)

3.74 (3) 3.40 (4)

3.36 (5) 3.06 (6)

2.99 (7) 2.90 (8) 2.88 (9)

2.82 (10) 2.28 (14)

2.09 (17) 1.82 (19) 1.80 (20) 1.77 (22) 1.76 (23)

1.32 (30) 1.26 (31)

1.16 (32) 1.16 (33) 1.16 (34)

1.07 1.01 (35)

0.85 (38) 0.84 (39)

0.79 (41) 0.79 (42) 0.76 (43)

0.28 (52) 0.24 (53)

0.10 (56) 0.03 (57)

0.00 1.00 2.00 3.00 4.00 5.00

ISRAEL (2010)FINLAND (2010)

KOREA (2010)SWEDEN (2010)

JAPAN (2009)DENMARK (2010)

SWITZERLAND (2008)TAIWAN (2010)

USA (2009)GERMANY (2010)

AUSTRALIA (2008)SINGAPORE (2010)

NETHERLANDS (2010)CANADA (2010)

CHINA MAINLAND (2010)UNITED KINGDOM (2010)

NEW ZEALAND (2009)ITALY (2010)

BRAZIL (2010)HUNGARY (2010)

RUSSIA (2010)MALAYSIA (2011)*

JORDAN (2010)INDIA (2010)

TURKEY (2010)LITHUANIA (2010)

MALAYSIA(2010)**HONG KONG (2010)

QATAR (2007)THAILAND (2009)

PHILIPPINES (2009)INDONESIA (2010)

GERD/GDP (%)

Source: The IMD World Competitiveness Yearbook (2012).Note: MALAYSIA* is the GERD per GDP taken from the National R&D survey 2012 while MALAYSIA** is the GERD/GDP estimated by WCY. The numbers in parenthesis show the rank of the countries when compared according to their GERD/GDP.

43Summary Report

"R & D expenditure" - Statistics Explained (2013/3/3) <http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/R_%26_D_expenditure>OECD (2011), “Business R&D”, in OECD Science, Technology and Industry Scoreboard 2011, OECD Publishing.

It should be mentioned that many of the advanced European countries have not reached the target for R&D intensity set by the European Union (EU). The 2002 Lisbon strategy had set for the EU an objective of devoting 3% of its GDP to R&D activities by 2010, but the 3% target was not reached. It was subsequently re-articulated and maintained in the Europe 2020 Strategy adopted in 2010, and now forms one of five key targets to be achieved by EU Member States by the year 2020 .

7.3 BUSINESS EXPENDITURE ON R&D

The New Economic Model (NEM) aims to transform Malaysia into a high-income advanced nation with inclusiveness and sustainability by 2020. The model emphasizes the need for a competitive and investor-friendly market (NEAC), and the role of the business sector as the catalyst for growth, as its R&D is the most closely linked to the creation of new products and production techniques, as well as to a country’s innovation efforts.

The importance of the business sector’s involvement in R&D is manifested in the advanced economies’ BERD per GERD, which shows the share of business-sector R&D relative to the total R&D expenditure. In 2011, Malaysia recorded a BERD of 56.67% of her GERD, several percentages smaller than the BERD/GERD shares of many advanced economies, which ranged between 60% and 80% (Figure 7.3).

22

23

23

22

Figure 7.3: BERD per GERD

Source: The IMD World Competitiveness Yearbook (2012). Note: MALAYSIA* is the BERD per GERD taken from the National R&D survey 2012 while MALAYSIA** is the GERD/GDP estimated by WCY.

79.8

1

75.7

6

74.8

73.4

2

71.5

4

70.4

5

70.3

2

69.6

3

68.7

5

67.3

60.9

3

60.8

3

60.5

1

57.2

3

56.6

7

55.5

4

51.2

5

50.6

7

47.3

9

43.2

9

42.5

5

41.4

5

37.9

6

28.5

9

3.64

0

10

20

30

40

50

60

70

80

90

BERD

/GER

D (%

)

44Summary Report


BERD per GDP, on the other hand, shows the R&D intensity of the business sector. Specifically, it shows the percentage of the GDP that is spent on R&D by the business sector. Malaysia’s BERD per GDP in 2011 is 0.61 (Figure 7.4); which is quite low when compared to that of developed East Asian countries such as Singapore (1.27), South Korea (2.8), and Taiwan (2.08). The world’s highest performer of business R&D is Israel (3.52), followed by South Korea (2.8), Finland (2.7). The U.S., however, has a BERD per GDP of only 2.03%, far smaller than Israel’s, even though the U.S. BERD for 2010 (USD282,393 million) is the highest globally .24

24

Figure 7.4: BERD per GDP (%)

Source: The IMD World Competitiveness Yearbook (2012). Note: MALAYSIA* is the BERD per GDP taken from the National R&D survey 2012 while MALAYSIA** is the BERD/GDP estimated by WCY. The numbers in parenthesis show the rank of the countries when compared according to their BERD/GDP.

3.52 (1)

2.80 (2)

2.70 (3)

2.54 (4)

2.34 (5)

2.20 (6)

2.08 (7)

2.08 (8)

2.03 (9)

1.90 (10)

1.33 (15)

1.30 (17)

1.27 (18)

1.07 (21)

0.67 (31)

0.61

0.56 (32)

0.55 (33)

0.55 (34)

0.51 (35)

0.33 (38)

0.17 (46)

0.09 (50)

0.05 (52)

0.04 (53)

0.01 (55)

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00

ISRAEL (2010)

KOREA (2010)

FINLAND (2010)

JAPAN (2009)

SWEDEN (2010)

SWITZERLAND (2008)

DENMARK (2010)

TAIWAN (2010)

USA (2009)

GERMANY (2010)

AUSTRALIA (2009)

CHINA MAINLAND (2010)

SINGAPORE (2010)

UNITED KINGDOM (2010)

ITALY (2010)

MALAYSIA (2011)*

MALAYSIA (2010)**

BRAZIL (2010)

NEW ZEALAND (2009)

SOUTH AFRICA (2009)

HONG KONG (2010)

INDIA (2010)

THAILAND (2009)

PHILIPPINES (2008)

INDONESIA (2008)

QATAR (2007)

BERD/GDP (%)

45Summary Report

22 "R & D expenditure" - Statistics Explained (2013/3/3) <http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/R_%26_D_expenditure>23 OECD (2011), “Business R&D”, in OECD Science, Technology and Industry Scoreboard 2011, OECD Publishing.

Given Malaysia’s relatively small share of BERD relative to the GERD, the New Economic Model’s aim of having the business sector as the nation’s primary driver for long-term economic growth may not fully materialize unless serious efforts are made to push for greater R&D in the private sector. To this end, the move of shifting incubators towards the private sector, stipulated under the 10th Malaysia Plan, is deemed a good step in increasing R&D in the private sector.

7.4 HUMAN RESOURCE DEVELOPMENT IN R&D

Malaysia’s economic growth was driven predominantly by factor accumulation; especially of low skilled workers. However this model is not sustainable, and is inconsistent with the economic structure of most advanced economies. A transformational shift is needed for Malaysia to be among the advanced economies. Malaysia needs to build her competency in S&T and R&D, and improve on her ability to innovate; and firms need to move up the value chain and be involved in higher valued-added activities. The stock of researchers is an indicator of Malaysia’s competency in R&D, and provides a benchmark with regard to the possibility of moving up the value chain, as it is the researchers, those who are at the frontiers of technology, who will lead innovation and the transformation of the economy. Indeed, the Ninth Malaysia Plan had set the target of 50 research-ers for every 10,000 members of the labour force by 2010.

7.4.1 Headcount of Researchers

In 2011, the number of researchers in Malaysia is estimated at 73,752. The country with the largest number of researchers is Japan, with 889,341 researchers (Figure 7.5). However, it should be mentioned that the headcount of researchers is a function of the size of the economy and the size of the population; hence countries with large populations will tend to have more researchers.

23

Figure 7.5: Headcount of Researchers

Source: UNESCO Institute of Statistics (www.uis.unesco.org) Notes: Statistic for Malaysia is taken from National R&D survey 2012. There were no data available for the U.S.

889

,341

484

,566

385

,489

368

,915

345

,912

295

,696

231

,910

124

,796

73,

752

67,

245

59,

341

55,

858

55,

797

54,

505

52,

568

43,

418

41,

143

34,

387

24,

049

21,

393

4,8

72

4,1

34

1,2

71

0100,000200,000300,000400,000500,000600,000700,000800,000900,000

1,000,000

Head

coun

t

46Summary Report

Source: OECD Science, Technology and Industry Scoreboard 2011

7.4.2 Researchers per 10,000 Labour Force

Researchers per 10,000 labour force (Figure 7.6) compares the proportion of researchers in the labour force across countries, and is an indicator of researcher intensity. In this regard, Iceland is leading other countries with a capacity of 223.6 researchers per 10,000 labour force. In the case of Malaysia in 2011, 58.2 out of 10,000 labour force are researchers. Even though this topped the target set by the Ninth Malaysia Plan, it is still smaller than the proportion of researchers in other advanced economies such as South Korea and Singapore, with 142.5 and 127.4 researchers per 10,000 labour force respectively, and the OECD average of 76.0 researchers per 10,000 labour force .

7.4.3 Full Time Equivalence (FTE) of Research Personnel

A nation’s workforce must adequately respond to the needs of the productive sectors in the economy. By this token, qualified researchers are of paramount importance for quality R&D, but having qualified researchers alone is not sufficient for R&D activities, and is not the only factor that determines the success and quality of R&D. Researchers require support from technicians and administrative personnel to assist in R&D activities. The FTE of research personnel indicates the amount of time in a year that they have undertaken for R&D activities.

25

25

Figure 7.6: Researchers per 10,000 Labour Force

Source: UNESCO Institute for Statistics (www.uis.unesco.org) Notes: Statistic for Malaysia is taken from the National R&D survey 2012. There were no data available for the U.S.

223.

6

207.

2

171.

8

147.

2

142.

8

142.

5

136.

9

134.

9

127.

4

125.

5

117.

8

114.

2

102.

5

87.8

84.4

82.8

82.3

61.0

60.3

59.3

58.2

47.1

36.6

22.8

3.5

0.0

50.0

100.0

150.0

200.0

250.0

Rese

arch

ers p

er 1

0,00

0 La

bour

For

ce

47Summary Report


Researcher intensity, however, is measured using FTE per 1,000 people. Iceland, with a research personnel FTE of 11.77 per 1,000 people, ranks the highest, while Malaysia’s research personnel FTE per 1,000 people of 1.98 (Figure 7.7) would have placed her between Poland and Mainland China. China, the country with the greatest number of research personnel, has a research personnel FTE per 1,000 people that is less than Malaysia, at 1.90, even though her total FTE is the highest globally at 2,553,800 . For the advanced economies, the minimum research personnel FTE per 1,000 people is about 3.

Figure 7.7: FTE of R&D Personnel per Capita (FTE per 1,000 people)

Source: The IMD World Competitiveness Yearbook (2012). Note: MALAYSIA* is the FTE per 1,000 people taken from the National R&D survey 2012 while MALAYSIA** is the FTE per 1,000 people estimated by the WCY. The numbers in parenthesis show the rank of the countries when compared according to their FTE per 1,000 People.

11.77 (1)

10.42 (2)

9.74 (3)

9.61 (4)

9.10 (5)

8.26 (6)

8.06 (7)

7.37 (8)

7.29 (9)

7.25 (10)

6.89 (12)

6.78 (13)

6.74 (14)

6.58 (15)

6.31 (17)

5.14 (22)

3.64 (28)

3.43 (30)

2.28 (35)

2.19 (36)

2.14 (37)

1.98

1.90 (38)

1.39 (40)

1.31 (41)

1.12 (43)

0.86 (45)

0.78 (46)

0.75 (47)

0.19 (51)

0.18 (52)

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00

ICELAND (2009)

FINLAND (2010)

LUXEMBOURG (2010)

DENMARK (2010)

TAIWAN (2010)

SWEDEN (2010)

SWITZERLAND (2008)

NORWAY (2010)

SINGAPORE (2010)

CANADA (2008)

JAPAN (2009)

KOREA (2010)

GERMANY (2010)

NEW ZEALAND (2009)

AUSTRALIA (2008)

UNITED KINGDOM (2010)

ITALY (2010)

HONG KONG (2010)

CROATIA (2010)

BULGARIA (2010)

POLAND (2010)

MALAYSIA (2011)*

CHINA MAINLAND (2010)

BRAZIL (2010)

QATAR (2007)

TURKEY (2010)

THAILAND (2009)

MALAYSIA (2010) **

CHILE (2008)

PHILIPPINES (2009)

INDONESIA (2009)

FTE per 1,000 People

26

26

48Summary Report

European Commission. (2008) Mapping the Maze: Getting More Women to the Top in Research. Luxembourg: Office for Official Publications of the European Communities.

7.4.4 Female Researchers

As shown in Figure 7.8, the percentage of female researchers in many of the advanced Western European nations is smaller than that of their Eastern European counterparts. The data parallel the findings of the European Commission (2008), which found that only 15% of full professors in European universities are women and that women are under-represented in decision-making scientific boards in almost all European countries . In contrast, Malaysia recorded a percentage of 48.7% female relative to male researchers, which is far better than the situation in many advanced economies, including Denmark (31.9%), Finland (31.4%), Singapore (28.5%), Germany (24.9%), South Korea (16.7%), and Japan (13.6%).

7.5 CONCLUSION

The distribution of R&D activities at the global level is concentrated in three regions: North America, Europe and East Asia. In the South East Asian region, Malaysia is a distant second to Singa-pore, and in the East Asian region, Malaysia is behind the world’s leading economies such as South Korea, Japan, and Taiwan in almost all of the R&D measures. In order to achieve the goals of Vision 2020, Malaysia’s R&D activities need to be at par with those of advanced economies. Hence, Malaysia’s targets for all measures of R&D should be set high enough such that they will elevate her to a position that is at par or at least comparable with that of advanced economies, specifically in terms of R&D performance and economic achievement.

27

Figure 7.8: Percentage of Female Researchers Relative to Male Personnel

Source: UNESCO Institute of Statistics (www.uis.unesco.org) Notes: Statistic for Malaysia is taken from National R&D survey 2012. There are no data available for the U.S.

50.9

48.7

48.5

47.6

46.4

42.5

42.4

41.0

39.5

38.1

37.9

37.1

35.8

35.7

35.2

33.8

32.2

31.9

31.4

28.5

28.1

26.9

25.9

24.9

16.7

13.6

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Lith

uani

a (2

009)

Mal

aysia

(201

1)

Kaza

khst

an (2

009)

Bulg

aria

(200

9)

Croa

tia (2

009)

Esto

nia

(200

9)

Slov

akia

(201

0)

Icel

and

(200

9)

Pola

nd (2

009)

Spai

n (2

009)

Uni

ted

King

dom

(200

9)

Kuw

ait (

2009

)

Turk

ey (2

010)

Slov

enia

(200

9)

Nor

way

(200

9)

Italy

(200

9)

Chin

a (2

009)

Denm

ark

(200

9)

Finl

and

(200

9)

Sing

apor

e (2

009)

Czec

h Re

publ

ic (2

010)

Fran

ce (2

009)

Net

herla

nds (

2009

)

Germ

any

(200

9)

Sout

h Ko

rea

(201

0)

Japa

n (2

009)

Perc

enta

ge (%

)

27

ICT (38.3%)












CHAPTER 8:

CONCLUSION

49Summary Report

26 The IMD World Competitiveness Yearbook (2012)

CHAPTER 8: CONCLUSION

8.0 INTRODUCTION

Malaysia’s gross expenditure on R&D has steadily increased since 2000. A sharp increase in GERD is particularly notable between 2006 and 2009, reaching close to an estimated RM 7.2 billion in 2009; an increase of 97.4% over that of 2006. In 2011, total R&D spending was estimated at RM9.4 billion. Malaysia’s research intensity (GERD/GDP) has also charted a consistent increase since 2004. Indeed, GERD/GDP rose from 0.63% in 2004 to 0.79% in 2008 and further to 1.01% in 2009, meeting the target of 1.0 set in the RMKe-10 to be achieved by 2015. Our research intensity continued to improve, and in 2010 and 2011, Malaysia recorded a GERD/GDP of 1.07%. Although this is an improvement over previous GERD/GDP values, it is still low when compared to that of a developed South East Asian country such as Singapore (1.27) and developed East Asian countries such as South Korea (2.8) and Taiwan (2.08).

From 2000 to 2011, the business sector has been the largest performer of R&D in Malaysia, accounting for more than 60% of the GERD since 2000—with the exception of 2000 (57.9%) and 2011 (56.7%). However, Malaysia’s BERD per GDP—which shows the percentage of the GDP that is spent on R&D by the business sector—is considered low when compared to that of other countries during the same period. Malaysia’s BERD/GDP in 2011 is 0.61.

The number of research personnel has also increased markedly since 2006. 2011 recorded the highest headcount (96,961) for R&D personnel, which includes researchers, technicians, and support staff. The highest number of researchers (73,752) was also recorded in 2011, with an estimated 58.2 researchers per 10,000 labour force, topping the target set by the Ninth Malaysia Plan of 50 researchers per 10,000 labour force by 2010.

The trends also show a marked increase in researchers with Masters and PhDs. The headcount of researchers with PhDs increased from 7,001 in 2006 to 33,272 in 2011, close to 47% of the total number of researchers; while those with masters degrees increased from 5,337 in 2006 to 24,691 in 2011.

Female participation in R&D has also steadily increased over the years. In 2008, women accounted for 40.9% of Malaysia’s researchers, while in 2009, 50.9% were women, the highest recorded since 2000, outnumbering their male counterparts by a small margin. Female researcher participation declined only slightly in 2010 and 2011 to 48.8% and 48.7% respectively. The percentage of female relative to male researchers is much higher than that of many advanced economies such as Denmark (31.9%), Finland (31.4%), Singapore (28.5%), Germany (24.9%), South Korea (16.7%), and Japan (13.6%).

50Summary Report

Pelan Strategik Pengajian Tinggi Negara Fasa 2 (2010 - 2015): http://jpt.mohe.gov.my/DASAR/bab-psptn/Bab3.pdf

8.1 THE WAY FORWARD

The marked increases in the various measures of R&D, i.e. GERD, GERD/GDP, headcount of researchers and research personnel, and researcher intensity, point to the fact that Malaysia is making steady progress in R&D. In addition, there is also an increase in the number of researchers, as reflected in the substantial increase in those with PhD and Masters degrees, as well as in the participation of women in R&D, amounting to about 50% of the total number of researchers.

However, these achievements, though notable, are not sufficient to allow us to reach the goal of being a high-income nation by 2020 as emphasised in the NEM and the 10th Malaysia plan. To achieve this goal, we need to invest sufficiently in R&D as this will lead to greater economic growth. Our researcher intensity of 58.2 researchers per 10,000 labour force is still below that of many advanced economies such as Singapore (127.4), Germany (114.2), and France (102.5), and the OECD average of 76 researchers per 10,000; while our GERD/GDP of 1.07% is also below that of advanced economies and the OECD average of 2.3% and the EU target of 3.0%. While it may not be possible nor appropriate to try to achieve, by 2020, the target of spending 3.0% of our GDP on R&D as set by the EU for their member countries, it is important, nevertheless, that we set for ourselves new targets as international cross-sectional time series data have shown that a country’s R&D intensity is strongly correlated with its productivity.

In this regard, we should aim to achieve a GERD/GDP of at least close to the OECD average of 2.3%. Given our past performance in R&D, and our present GERD/GDP of 1.07%, it is perhaps reasonable to set the target of achieving a GERD/GDP of 2.0% by 2020.

With regard to the number of researchers, we propose a target of 70 researchers per labour force, close to the OECD average of 76; given our present headcount of 58.2 researchers per 10,000 labour force. We also propose a target of 60,000 researchers with PhDs by 2023 following the Ministry of Higher Education’s (MOHE) target. This is a target that is likely to be achieved, as MOHE has already put in place the mechanism to achieve this target in their National Higher Education Strategic Plan Phase 2 (2010 - 2015) .

In addition to developing our research and researcher intensity, there is also a need to improve our Business Expenditure on R&D (BERD) as it plays a significant role in propelling developed nations well ahead of less developed nations. BERD in developed countries range from 60% to 80%; with 70% being the OECD average. We suggest aiming for a BERD/GERD of at least 70%, following the OECD average. Given Malaysia’s relatively small share of BERD relative to her GERD, the New Economic Model’s aim of having the business sector as the nation’s primary driver for long-term economic growth may be hampered unless Malaysia makes serious efforts to push for greater, stronger, more diverse, and more resilient R&D. To this end, the shifting of economic incubators towards the private or business sector, articulated in the 10th Malaysia Plan, can be considered as a smart economic move for increasing Malaysia’s performance in R&D. However, it should also be emphasised that the role of the government is to facilitate R&D, and not to provide the bulk of the investment for business R&D, which should come from its own funds. Thus, a close synergy of business and government supported R&D is what Malaysia needs to galvanize national development and sustain long-term economic growth.

28

28

51Summary Report

26 The IMD World Competitiveness Yearbook (2012)

LIST OF IHL

AIMST : AIMST University CURTIN : Universiti Teknologi Curtin Sarawak Malaysia CYBERMED : Kolej Universiti Sains Perubatan CyberJaya KDU : Kolej Damansara Utama KLIUC : Kolej Universiti Infrastruktur Kuala LumpurKUIS : Kolej Universiti Islam Antarabangsa SelangorMMU : Universiti Multimedia MONASH : Universiti Monash Malaysia NOTTINGH : Universiti Nottingham (Malaysia) OUM : Universiti Terbuka Malaysia SEGI : Kolej Universiti SEGi SUNWAY : Kolej Universiti Sunway Universiti Kuala Lumpur SWINBURNE : Universiti Teknologi Swinburne Kampus Sarawak TATI : Kolej Universiti TATITAYLORS : Kolej Taylor's UIAM : Universiti Islam Antarabangsa Malaysia UITM : Universiti Teknologi Mara UKM : Universiti Kebangsaan Malaysia UM : Universiti Malaya UMK : Universiti Malaysia KelantanUMP : Universiti Malaysia PahangUMS : Universiti Malaysia SabahUMT : Universiti Malaysia Terengganu UNIKL : Universiti Pertahanan Nasional MalaysiaUNIMAP : Universiti Malaysia Perlis UNIMAS : Universiti Malaysia Sarawak UNISEL : Universiti Selangor UNISZA : Universiti Sultan Zainal Abidin UNITEN : Universiti Tenaga Nasional UPM : Universiti Putra Malaysia UPNM : Universiti Teknologi Curtin Sarawak MalaysiaUPSI : Universiti Pendidikan Sultan Idris USIM : Universiti Sains Islam Malaysia USM : Universiti Sains Malaysia UTAR : Universiti Tunku Abdul RahmanUTEM : Universiti Teknikal Malaysia UTHM : Universiti Tun Hussein Onn Malaysia UTM : Universiti Teknologi Malaysia UTP : Universiti Teknologi PETRONAS UUM : Universiti Utara Malaysia

Appendix

52Summary Report

28 Pelan Strategik Pengajian Tinggi Negara Fasa 2 (2010 - 2015): http://jpt.mohe.gov.my/DASAR/bab-psptn/Bab3.pdf

LIST OF GRI

ABI : Institut Agro Bioteknologi MalaysiaANM : Agensi Nuklear MalaysiaARSM : Agensi Remote Sensing MalaysiaCRAUN : Craun Research Sdn. BhdCRC : Clinical Research CentreCREAM : Construction Research Institute of MalaysiaCSM : Cyber Security MalaysiaFELCRA : Lembaga Penyatuan dan Pemulihan Tanah PersekutuanFRIM : Institut Penyelidikan Perhutanan MalaysiaIAB : Institut Aminuddin BakiIHSR : Institut Penyelidikan Sistem KesihatanIKIM : Institut Kefahaman Islam MalaysiaIKU : Institut Kesihatan UmumIMR : Institut Penyelidikan PerubatanINTAN : Institut Tadbiran Awam NegaraIPGM : Institut Pendidikan Guru MalaysiaIPHARM : Institut Farmaseutikal & Nutraseutikal MalaysiaIPP : Institut Penyelidikan PerikananJMG : Jabatan Mineral dan Geosains MalaysiaJPS : Jabatan Perhutanan SarawakJPSB : Jabatan Perhutanan SabahJTSB : Jabatan Pertanian SabahJTSK : Jabatan Pertanian SarawakKEMAS : Jabatan Kemajuan MasyarakatLKM : Lembaga Koko MalaysiaMARDI : Institut Penyelidikan dan Kemajuan Pertanian MalaysiaMIB : Institut Bioteknologi MelakaMIMA : Institut Maritim MalaysiaMIROS : Institut Penyelidikan Keselamatan Jalan RayaMOH Dental : Bahagian Kesihatan PergigianMOH Pharmacy : Bahagian Perkhidmatan FarmasiMPB : Lembaga Lada MalaysiaMPOB : Lembaga Minyak Sawit MalaysiaNAHRIM : Institut Penyelidikan Hidraulik Kebangsaan MalaysiaNIOSH : Institut Keselamatan dan Kesihatan Pekerjaan NegaraPPTAP : Pusat Penyelidikan Ternakan Air PayauRISDA : Pihak Berkuasa Kemajuan Pekebun Kecil Perusahaan GetahSBC : Sarawak Biodiversity CentreSTRIDE : Institut Penyelidikan Sains dan Teknologi PertahananVRI : Institut Penyelidikan Veterinar

Appendix

Final Report of R&D Survey 2012

Documents

Transcript of Final Report of R&D Survey 2012