Sunday 10 Dec 2023
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This article first appeared in Forum, The Edge Malaysia Weekly on March 13, 2023 - March 19, 2023

Technological innovation involving the creation of new or improved products and processes has been the focus of innovation, with investments being channelled to help tech-based businesses to grow and thrive.

Success in technological innovation has resulted from the growth of innovation clusters such as Silicon Valley in the US, supported by innovations in financing, including angel and venture capital financing and, recently, crowdfunding too.

Traditional innovation is based on a linear model, emerging from the supply side and then progressing to demand-driven improvements: this defines the path of innovation. The supply side proceeds from the lab or research unit through commercialisation to the market and the demand side proceeds from the market or users and is channelled to the lab or research unit. The present innovation model developed for Malaysia is a linear, demand-driven model.

This prescription was evident in Innovation Nation, a book by John Kao, reported to be originally written to inform the 2008 US presidential primary agenda, which highlighted Silicon Valley as a successful productive ecosystem. This model is being replicated across the globe, resulting in the creation of innovation centres in places as diverse as Shanghai, Singapore, Denmark and Ireland.

Kao highlighted the critical importance of talent and education for innovation to flourish and proposed integrating game culture into education curricula. He also advocated marketing the importance of education so that becoming an innovator in the US would be as compelling as becoming a movie or sports star.

In 2007, the Technology Administration of the US Department of Commerce commissioned a study titled “Innovation Vital Signs Project”, undertaken by the Alliance for Science and Technology Research for America (Astra). Among its goals are the development of an innovation framework that provides a foundation for understanding the processes and interrelationships of the innovation ecosystem. It also promotes the need for the nation to aggressively engage in a government-wide effort to develop innovation metrics that look beyond innovation inputs and towards outcomes as well as innovation processes.

It draws attention to the urgent need to shift from the preoccupation with innovation metrics such as the ratio of research and development (R&D) expenditure to gross domestic product (GDP), number of researchers and others to also accord priority to innovation outputs and innovation processes.

As a case in point, Kao cited the experiences of a number of countries that have invested similar amounts of R&D budgets in relation to their GDP and had a similar number of scientists per 10,000 population. However, their outputs differ largely due to the difference in their innovation processes, which link innovation outputs to innovation inputs.

In 2008, the UK published a white paper themed “Innovation Nation”, setting the aim of making Britain the best country in the world to run an innovative business, third-sector organisation or public service.

This white paper aimed to build an innovation nation where innovation thrives at all levels: among individuals, communities, cities and regions. The paper highlighted that although innovation is primarily driven by the private sector, innovation in public sector areas such as education, healthcare and transport are of paramount importance to deliver better public services and to train and nurture more talents. Thus, investments in innovation in the public sector are equally critical.

Ranking of nations for innovation

The Global Innovation Index (GII), introduced by INSEAD in 2007 in association with Cornell University and the World Intellectual Property Organization (WIPO), offers a framework for measuring innovation, covering seven main categories, including five for innovation input and two for innovation output.

GII’s 2022 issue presents the latest global innovation ranking of 132 economies based on 81 indicators, with Switzerland, Sweden, the US and the UK leading the top 10 countries.

WIPO highlights that some economies are very efficient at converting innovation inputs into outputs. Among the high-income nations, Switzerland (No 1) produces considerably higher levels of outputs than other higher-income economies such as the US (No 2), Sweden (No 3) and Singapore (No 7) at comparable levels of innovation inputs. Germany (No 8) produces the same level of outputs as the US and the Netherlands (No 5) at lower levels of innovation inputs.

In 2022, Malaysia was ranked No 36 out of 132 countries in the GII ranking, maintaining the same position as in 2021, but dropping three positions from 2020. For the innovation input sub-index, Malaysia was ranked No 35 and for the innovation output sub-index it was ranked No 37.

Malaysia’s innovation efficiency rank fell from No 52 in 2013 to No 72 in 2014. And most recently, the country’s innovation efficiency rank fell from No 34 in 2021 to No 37 in 2022.

Although Malaysia’s ranking on innovation inputs, which record the impact of increasing inputs, such as R&D spending and number of researchers, improved in 2022, at No 35 from No 36 in 2021. However, the nation’s innovation output fell to No 37 in 2022 from No 34 in 2021, suggesting some inefficiency in translating inputs into outputs (including patents, publications and citations).

Thus, urgent focus must be given to improving the innovation process that impacts and contributes to innovation output.

Recommendations for Malaysia

The following are some recommendations for the government in its pursuit to achieve the status of an innovation nation:

1. Malaysia’s present linear innovation model, which is essentially technological innovation, must be restructured to capture the realities of today and turned into an innovation lifecycle

2. It was reported that the National Science Council (NSC) has agreed for the (then) Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC) and the Ministry of Economy to work together to identify focus areas of science, technology, innovation and economics (STIE) to be implemented under the 12th Malaysia Plan, beginning from the first quarter.

In the country’s quest to shift to an innovation-led economy, as well as enhance its competitiveness and address issues in public services — including education, health, transport, energy and food security — it is critical to recognise that innovation is not just science and technology but covers more areas and fields, including public sector innovation. Thus, in addition to the Ministry of Science, Technology and Innovation (Mosti, previously MESTECC) and the Ministry of Economic Affairs, other rele­vant ministries, including but not limited to the Ministry of Education, Ministry of Health, Ministry of Transport, Ministry of Energy and Ministry of Agriculture, should be invited to discuss and identify focus areas to promote innovation and for Malaysia’s economic plan.

3. The NSC should be rebranded as the National Innovation Council (NIC) to cover a comprehensive range of sectors that are key to promoting innovation, not limiting its scope to science and technology.

4.  This NIC should be under the Prime Minister’s Department, with its secretariat placed in this department or supported by Mosti, chaired by the prime minister and co-chaired by an industry innovation maverick, with members comprising ministers from relevant ministries, selected policymakers and innovation experts and professionals.

5. Since innovation in financing is key to support innovation, a sub-group under innovation financing can be formed under the NIC to be accorded attention by the Prime Minister’s Group of Advisers on Finance led by Petroliam Nasional Bhd adviser Tan Sri Hassan Marican.

6. As the well-being of the rakyat and their quality of life is paramount, priority must also be accorded to social innovation. Ministries responsible for these functions can form a social innovation sub-group under the NIC.

7. Malaysia’s STIE policy should be shortened to just innovation policy to leave no ministry or relevant sectors out of Malaysia’s national innovation game plan.

8. Review international best practices to identify an innovation model as the National Innovation Model, not limited to science and technology but covering a wider spectrum of sectors and fields.

9.  It is imperative for the government, in partnership with other stakeholders, to invest in and promote the innovation process to strive to optimise innovation output which, ultimately, will increase the nation’s innovation efficiency.

10. As innovation in the public sector is fundamental, an innovation lab for the public sector could be introduced to provide space for the government to gather key participants for discussions and views to experiment and develop models, procedures and processes for enhancing public sector innovation.

11. Mosti could consider rebranding as MOST, leaving the “I” to be incorporated in all ministries to invest in and to promote innovation across the board.

Sheriffah Noor Khamseah Al-Idid Syed Ahmad Idid is an innovation and nuclear advocate

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