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Slide 1 - ..:: National Biotechnology Division ::..



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  • Source: Mittelstädt, A. and F. Cerri (2008), "Fostering Entrepreneurship for Innovation", OECD Science, Technology and Industry Working Papers, 2008/5, OECD publishing, © OECD. doi:10.1787/227624785873Why is Innovative SMEs important to transform the economy? See next slide which shows the composition of SMEs in high-income countries. 99.2% of registered companies in Malaysia are SMEs, 78.4% are Micro.
  • In order to become an innovation-led economy and a high-income economy, we need to identify and certify our innovative SMEs and companies so that we can foster and support genuine innovative SMEs because new innovative products and services are high-risk, long returns and SMEs and start-ups usually have little market access, and difficult to get no collateral financing. Once they are certified, innovative SMEs are given access to financing (soft loans – in OECD and Korea, innovative SMEs pay 2% deduction in interest rates), priority for government grants (in Korea, innovative companies can claim back 75% of R&D expenditure funded by the companies’ own funds), priority for government procurement of goods (in Korea, 7% of government goods are purchased from Innovative SMEs), Technology Assurance Purchasing program that guarantees purchase for the initial 3 years of new technologies developed by Innovative SMEs for large national top-down projects (e.g. High Speed Broadband HSBB). The procurement support programs provide market track-record for innovative SMEs to market to the global market. This is NOT an import substitution approach because the goal is to provide track-record to export/market to global customers.
  • (Two Optional slides – slides 17 and 18) - can hide.
  • GRI –Government Research Institute and government Centres of ExcellenceThe business ecosystem must be created via government policies


  • 1. The National Biotechnology Seminar 2010
    Positioning Biotechnology in the New Economic Model
    Zakri Abdul Hamid
    Science Advisor to the Government
    24 MAY 2010
  • 2. Malaysia at a Crossroads
    Source: EPU
  • 3. Malaysia is rich in Biodiversity
    • Malaysia is one of the 17
    mega-diverse countries identified
    by the United Nations
    Environment Programme (UNEP)
    as harbouring the majority of
    the earth’s species, which may have immense benefits for the future generations.
    • Malaysia is well-endowed with
    natural resources in agriculture,
    forestry and minerals
    • Biotechnology is the new economic engine for sustainable development
    • 4. By 2020, the government envisages this sector will employ up to 160,000
    people and will contribute to 5 % of the Nation’s GDP
    • The sector is expected to generate RM248 billion in revenue by 2020.
  • National Mission 2006-2020
    • Increase productivity and competitiveness in agriculture, manufacturing and services sectors through Intensive Research &Development & Commercialisation(RDC)
    • 5. Generate new sources of wealth in technology and knowledge-intensive sectors
    • Promote knowledge and innovation as key determinants of Malaysia’s success as a KBE
    • 6. Enhance innovation system that encourages top quality R&D and its commercialisation
    Source: Malaysia National Mission
  • 7. Malaysia 2020: High Income Advanced Economy
    The term is used to describe countries that have a high level of development according to some criteria that are:
    Income per capita; countries with high gross domestic product (GDP) per capita i.e USD15K per capita;
    Industrialization; countries in which the tertiary and quaternary sectors of industry dominate where the quaternary sector of the economy is an extension of the three-sector hypothesis of industry principally concerns the following services: information generation, information sharing, consultation, education and research and development while the tertiary sector of the economy also known as the service sector or the service industry; the others being the secondary sector (approximately manufacturing) and the primary sector (extraction such as mining, agriculture and fishing);
    Human Development Index; which combines with an economic measure, national income, with other measures, indices for life expectancy and education has become prominent. This criterion would define developed countries as those with a very high (HDI) rating i.e 0.9; Happiness Index? (Bhutan); Human Wellbeing? (Rakyat Sejahtera); Sustainability? Inclusiveness (1Malaysia)?
    Source: various – IMF, world bank, etc
  • 8. Foundation of Growth
    Basic Requirements
    Efficiency Enhancers
    Innovation Factors
    Higher education & Training
    Market efficiency
    Technological readiness
    Health & Primary education
    Innovation Factors
    Business sophistication
    Source: World Economic Forum
  • 9. Global Challenges vs Sustained Social & Economic Opportunity
    Insufficient access and quality of education
    Local Innovation
    Jobs & Opportunities
    Lack of capacity for innovation and development
    Connections Communities Partnerships
    Obstacles to employment and entrepreneurship
    Source: Microsoft Corporation
  • 10. Technology Leadership is Fundamental
    Innovation That Matters is the Differentiator
    Innovation is the intersection of invention and insight, leading to the creation of social and economic value.
    Constant migration further along the value chain such as toward source of technology (frontier) or nearer to consumer (integration), invention / innovation would flourish.
  • 11. If Malaysia wants to become a High-Income Country, we must increase % of Innovative SMEs (average 10% in OECD countries) and Firms collaborating in Innovative Activities (OECD Report, 12 Jan 2009)
  • 12. Strategic Plan to Develop Innovative Local Companiesthat would Expand and Lead in the Global Market
    Development of Global Innovative Companies
    Source: MIGHT
  • 13. Key Issues Inhibiting Progress in Designing Own Products / IPs and Transfer of Design to Malaysia
    Source: MIGHT Innovation Audit (Semiconductor & Electronics, Oct 2008)
  • 14. Enhance the current broadbased programmes, while focusing supports to meet the specific needs of selected industrial sectors
    Broadbase Approach
    Broadbased support programmes (e.g., eContent Fund)
    Nanotech, Biotech, ICT
    Cross cutting technologies
    Energy, Water, Food
    Security technologies
    Focused assistance
    Focused assistance
    Focused assistance
    Focused assistance
    Agro. Downstream
    Islamic Finance
    Medical Tourism
    E&E Components
    Deepening Approach
    Focus Areas/Sectors
    Source: MIGHT
  • 15. Convergence Drives New Innovation
    (Technology Deepening and Integration)
    Any Time,
    Any Where, Any Device
    Source: Intel Corporation
  • 16. Scaling Into Moore’s Law
    (Technology Deepening and Integration)
    • Essence of Moore’s law: “Innovate & Integrate”
    • 17. Driving to nanoscale
    • 18. Innovations to overcome scaling limits
    • 19. Innovation and integration of materials and processes to assure functions
    • 20. Example: Introduction of low stress packaging materials to support strained silicon and low-K ILD
    Source: Intel Corporation
  • 21. Today And Tomorrow
    The environment is much more complex …
    • Large number of diverse applications
    • 22. Driving segmentation in use conditions, product design, performance requirements and materials sensitivities
    • 23. Technology must enable:
    • 24. High Speed Signaling
    • 25. Variety of Power Delivery and Removal solutions
    • 26. Interconnect Scaling
    • 27. Wide range of Form Factors
    • 28. Complex Silicon/Package Integration
    Source: Intel Corporation
  • 29. Time For Action
    Points to Consider
    Innovation creates new value
    Partnerships among government, industry, academia and labor are essential
    Take ownership of change
  • 30. CSR Elements
  • 31. CSR Paradigm
  • 32. Are current patterns of resource use sustainable?
    Implications of climate change
    Energy utilization
    Water resources
    Food production
    Ocean health
  • 33. 21st Century Malaysia
    Market driver
    I N N O V A T I O N
    I N N O V A T I O N
    Green Technology
    & capacity
    Business ecosystem
  • 34. National Transformation
    • The Government is committed to transform Malaysia into a competitive, knowledge-based,
    innovative and eco-efficient economy.
    • Strong innovative performance is the way to go forward to achieve this
    • 35. It is important for both the public and private decision makers to take stock and realise
    the importance of investment in productivity, technology and innovation as a
    driver of growth and competitiveness.
    • For a knowledge based economy , STI has to be strengthened and placed at the pinnacle of the
    all planning and policy development so as to ensure competitiveness and rise as a innovative
    high- income nation
    • Several target specific sectors called the National Key Economic Activities have been identified,
    which include tourism, oil and gas sector, agriculture, Islamic financing and agro-business
    • The Biotechnology Sector can play an important role in some of the sectors identified
  • National Transformation
    Vision 2020 is not possible without economic, social and government transformation
    To move the country forward the Government has crafted a framework to drive the
    Figure 1 – The Four Pillars of National Transformation
    Vision 2020
    Smooth Development of
    Government’s Development
    New Economic Model-
    A high Income ,
    inclusive and
    sustainable Nation
    Preservation and Enhancement of Unity in Diversity
    Effective delivery of Government services
    6 National Key Result Areas (NKRAs)
    8 Strategic Reform Initiatives (SRIs)
    March 2010
    10th Malaysia Plan
    People First
    Performance Now
    April 2009
    Government Transformation Programme
    Economic Transformation Programme
    Growth Targets & Expenditure Allocation
    January 2010
    JUNE 2010
    Source: NEM
  • 36. New Approach to Growth
    Key thrusts on how to reposition the economy for the future
    NEM places emphasis on :
    • Growth through Productivity focusing on innovative processes and cutting-edge technology,
    supported by private investments and talent
    • Private sector-led growth by promotingcompetition across and within sectors to revive
    private investment and market dynamism and adopting internationally accepted standards
    • Localised autonomy in decision-making by empowering state and local authorities
    to develop and support growth initiatives, and encourage competition between localities
    • Cluster and corridor based economic activities byconcentration of business activities for
    economies of scale, agglomeration and better provision of supporting services
    • Favour technologically capable industries and firms through grant incentives to support
    innovation and risk-taking to enable entrepreneurial spirit to develop higher value added
    products and services
    • Retain and attract skilled professionals by embracing talent, both local and foreign,
    needed to spur an innovative, high value added economy
  • 37. The New Economic Model (NEM)
    • A Radical Change is needed - Sustainable over long-term
    - Reach everyone in the country
    - Enable Malaysia to reach high income status
    • Characteristics of Malaysia in 2020
    - Market led
    - Well Governed
    - Regionally Integrated
    - Entrepreneurial
    - Innovative
    • How Are We Going to Do it?
    - To be Achieved through an
    Economic Transformation Programme (ETP)
    - The ETP will be driven by
    8 Strategic Reform Initiatives (SRIs)
    - The NEM will be a catalyst to unleash
    Malaysia’s Growth Potential
  • 38. Aspirations of a united and advanced nation in line with the 1Malaysia concept
    The Goals of the NEM
    Goals of the New Economic Model
    High Income
    Important Enablers of the NEM
    • Unwavering Political Will and Leadership
    • 39. Preparing the Rakyat for Change
    Targets US$15,000 - 20,000
    per capita by 2020
    Quality of Life
    Meets present needs without compromising future generations
    Enables all communities to fully benefit from the wealth of the country
    Source NEM
  • 40. The Strategic Reform Initiatives (SRIs)
    All the 8 SRIs have cross-cutting impact over all sectors to
    address the economic downward spiral
    Source: NEM
  • 41. SRI 1
    SRI 2
    Biotechnology in The NEM
    Energising Private Sector
    Developing Quality Workforce
    The Private Sector needs to step up and assume a greater role in the
    nation’s transformation
    • Biotechnology has to target the R & D to produce high value added products
    • 42. Biotechnology can promote SME growth by encouraging them and giving incentives for them to take up the R & D outputs
    • 43. Create stronger links between SMEs and universities / higher learning institutions / research institutions
    • 44. Through R & D and knowledge transfer, create networks designed to stimulate innovation in the economy
    Developing a quality workforce and reducing dependency on foreign labour
    • Encourage R & D collaboration between institutes of higher learning and the
    Biotech industry
    • Enhance Biotechnology in the Education System
    • 45. Stimulate more R & D based Biotechnology courses in Institutes of Higher Learning
    • 46. Augment Biotechnology curriculum with entrepreneurship, creativity and innovation programmes
    • 47. Biotech Research Institutes should align to conduct basic research to feed into industry needs and form closer partnership with them at a very early stage
    • 48. Prioritization of Biotech R & D to meet the immediate and future needs of the country
  • SRI 6
    Building the Knowledge Base and Infrastructure
    Biotechnology in The NEM
    Economic Transformation through Innovation
    • Transformation of the Agriculture and Industrial sectors through continuous
    Innovation of significant technological advancement like Biotechnology
    • Access to specialised skills needed to drive the Biotechnology sector
    • 49. Protection of IP rights
    • 50. Fostering R & D links between institutions of higher learning and private sector
    • 51. Align Biotech R & D to national growth objectives
    • 52. Biotech R & D funding through an open access system through competition
    • 53. KPIs for Universities based on commercialisation
    • 54. Biotechnology Research Powerhouse and centre of excellence run on a
    commercial basis
    • Biotechnology and the National Innovation Model
    • 55. Promoting basic research in Biotechnology with perceived significant
    potential impact on economic development
    • Reward for excellence in Biotech Research
    • 56. R & D in Biotech be made attractive to business enterprises
    • 57. Incentives for International l Networking in Biotechnology
    • 58. Strengthen the role of Universities as research institutes
    • 59. Establish strong Biotech research teams
    • 60. Increase emphasis on research training of young scientists in internationally
    competitive environments
  • 61. SRI 7
    Enhancing Sources of Growth
    Biotechnology in The NEM
    Malaysia must build on its strategic location together with advantages arising from its rich biodiversity
    • Focus on palm oil-related downstream industries to develop indigenous technology and innovation or acquire technology to meet new market demands
    • 62. Climate change mitigation using Biotechnology
    • 63. Alternative energy generation through Biotechnology
    • 64. Develop industries that support sustainable development such as use of traditional plants and herbs for modern applications developed through Biotechnology
    Preserving our natural non-renewable resources and safeguarding the
    interest of future generations by managing it with strategic policies
    • Embrace Green technology
    • 65. Increase downstream activities on high value added products
    • 66. Utilizing biotechnology in various ways to reduce or mitigate carbon emission
    • 67. Biotechnology to reduce pollution
    SRI 8
    of Growth
  • 68. The Way Forward
    Scientific understanding of Plants will burgeon over the next 20 years
    The period to 2020 and the decades beyond will be an unprecedented time for
    knowledge creation about the structure and function of plants.
    This knowledge will provide mankind with new opportunities throughout the 21st Century
    Use of plants for energy and industrial materials in a sustainable manner
    The non-food crop sector can be used as a source of renewable replacement market for existing energy market and industrial materials.
    Sustainable biofuels production will be an increasingly critical component of the nation’s security in the coming century:
    • expanding the nation’s energy supplies,
    • 69. reducing dependence on petroleum,
    • 70. cutting greenhouse gas emissions,
    • 71. creating economic opportunities in rural regions
    • 72. enable the nation’s economy to achieve the objectives of the NEM
    • 73. improve land use efficiency
    • 74. enhance soil sequestration of CO2.
  • The Way Forward
    Industrial biotechnology has tremendous potential to transform energy production and
    lead to more sustainable industrial processes. It can play a significant role in reducing
    greenhouse gases, the use of fossil fuels and raw materials, leading to cleaner and
    greener industries
    The various industrial applications of biotechnology have a number of things in common, both in terms of improved output and reduce greenhouse gas emissions and encourage cleaner and more sustainable energy resources.
    They can deliver some or all of the following benefits:
    • Reduce water use and traditional chemicals
    • 75. Reduce use of energy, and thus lower levels of CO2 emissions.
    • 76. Increase the use of renewable resources, whether as chemical feed stocks or
    fuels. Growing rather than extracting will reduce the use of fossil fuels and be
    • Biotechnological processes, because they are precisely targeted, can be used to
    make new materials and higher quality materials more cost effectively, with
    less waste.
    • Bio-based industries can also give a major boost to Malaysian agriculture by
    sourcing high-value raw materials from farmers, providing new alternatives for agricultural land use and using agricultural waste to build value: a clear contribution towards a sustainable rural economy.
  • 77. The Way Forward
    Climate Change and Biotechnology: Solutions through Innovation
    • The clean tech revolution spurred by the recent climate negotiations will require scientific and technological innovation, investment from the public and the private sector, and robust enabling environments
    • 78. Biotechnology can provide the tools needed to mitigate and/or adapt to the effects of climate change and to effectively steward the environment
    Biotechnology has the potential to
    • increase food supplies,
    • 79. reduce pesticide damage to the environment,
    • 80. conserve natural resources,
    • 81. create alternative fuels from renewable sources without compromising the environment,
    • 82. increase farm income.
    • 83. develop healthcare products that can provide support to those coping with the effects of climate change
    • 84. Produce innovative seeds and agricultural products that will enhance food production and lessen the impact of agriculture on the environment, including the reduction of greenhouse gases.
    • 85. Produce new crop varieties that help reduce the risk of crop loss and enable more environmentally sustainable practices
  • Summary
    • Continuous evaluation on the impact of policies, programs, physical financial incentives,
    and the funding system in achieving the desired outcomes of economic change.
    • Management of grants and funding programs for innovation and R & D be consolidated
    and managed by a Single Agent Management
    • All players should work together in a integrated fashion to avoid multiplication of
    programs in order to maximise public sector delivery system and innovation
    • Strategies to attract knowledge so that R & D can be ore market driven and outputs be
    more innovative and contribute to the value chain
    • Major institutional and cultural change in the R&D governance model
    • 86. A strong commitment to implement economic change and willingness to take bold
  • 87. The National Biotechnology Seminar 2010
    Thank You
    Zakri Abdul Hamid
    Science Advisor to the Government
    24 May 2010