KUALA LUMPUR (Nov 19): While Malaysia's research and development (R&D) spend was steadily increasing up to 2016, it has since been declining, putting the country behind its peers, according to the World Bank's latest report entitled "Assessing the Effectiveness of Public Research Institutions".

The report was prepared based on a survey of 10 public research organisations (PROs) and 16 university research centres.

World Bank senior economist Smita Kuriakose, who co-authored the report, pointed out that R&D expenditure in the country increased to about 1.4% of gross domestic product (GDP) in 2016 from below 0.7% in 2006, but has since declined to slightly below 1% as at 2018.

"Malaysia has fallen short compared with some of its high income aspirational peers," she said during her presentation earlier today.

For comparison, Singapore, China, France and the US' R&D spend in 2020 were more than 2% of their respective GDP, while Germany and Japan's R&D spend were above 3% of GDP.

South Korea led the basket of nations, with an R&D spend of almost 5% of GDP.

World Bank's data also showed that the expenditure by business enterprises was somewhat of a declining trend between 2006 and 2016, while PROs and higher education institutions saw increasing expenditure over the years.

In terms of expenditure by research orientation between 2014 and 2018, the percentage of basic research increased from 16.9% to 39.3% of total expenditure and experimental research increased from 7.5% to 24.5%.

The portion of spending on applied research, on the other hand, declined from 75.5% in 2016 to 36.2% in 2018.

Business enterprises have been spending more on applied research and experimental research as expected, said Kuriakose, while government research institutions and higher education institutes have a larger proportion of basic research.

On research funding, which the economist said is a major factor in determining the strategic focus for research organisations, a large proportion of funding for PROs comes from the government.

University research centres, which also receive government funding, are also seeing a larger proportion of funding coming from the private sector, which she said could be a result of these research centres having to find other sources of funding besides the government.

"This also makes them more geared towards applied and industry research," said Kuriakose.

In terms of autonomy, some PROs were seen to have greater autonomy in terms of their research budgets versus university research centres, with the latter seeing the greatest level of autonomy in terms in setting research objectives.

Meanwhile, she said that monitoring and evaluation are key in seeing how the research can be used and applied.

All of the respondents said their funding is linked to some form of performance measures and is subject to monitoring and evaluation, although some have struggled to have long-term strategic research plans, especially pertaining to investment strategies.

Some organisations also highlighted a lack of consistent funding and uncertainty in long-term goals, which jeopardises research continuity.

On technology transfer, most respondents said that there were incentives in place to encourage this.

"On paper, there is recognition in terms of performance and rewards for research centres, but the kind of support being provided for technology transfer in these PROs is not sometimes in line with what they want to see being prioritised," said Kuriakose.

Looking at the level of commercialisation, although Malaysia is seeing higher levels of collaborative research, she said commercialisation of the research has been low.

Overall, the challenges highlighted by the survey respondents include the growing uncertainty and inconsistency in funding and the lack of effective implementation of incentives, which prioritises academic incentives such as getting published rather than industry-relevant research or commercialisation.

"The implementation of these incentives to further commercialise some research needs to be made more prevalent," said Kuriakose.