2. Background
• Shift economic activity from technologically
sophisticated to resource‐intensive sectors
• In high value added sectors, productivity
growth has slowed down and unit values of
exported goods have declined relative to
peers
• Related to the slowdown in investment and
productivity growth during the 2000s
9. Shift in GDP to low‐skill resource intensive
sectors
9
2005 2012
Agriculture 8.3 10.1
Oil palm 2.9 4.5
Mining and
quarrying 13.3 10.4
Construction 3.0 3.9
Manufacturing 27.5 24.2
Refined petroleum
products 3.0 4.0
Non-metallic mineral
products 0.7 1.0
Fabricated metal
products 1.0 1.5
OCAM
2.0 0.4
R,T, Comm Eq.
5.5 3.4
Motor vehicles
3.0 2.1
Services 46.8 50.4
Trade 13.8 16.3
Government services 6.6 8.5
Source: BNM
10. Reduction in quality of skilled‐
intensive exports
Electrical Machinery and Equipment
China Germany Indonesia USA Japan Netherlands Korea Thailand Malaysia
Rank
Malaysia
1995 19.9 75.9 54.6 54.3 84.2 67.1 54.2 96.8 47.2 206 / 222
2000 22.4 1428.7 36.7 148.7 70.8 53.0 44.1 401.1 35.8 219 / 235
2007 25.1 103.3 49.2 86.2 72.2 106.1 59.0 38.0 68.3 205 / 234
2011 58.6 85.1 64.4 98.8 111.8 70.9 83.2 75.9 49.3 121 / 236
Precision Instruments
China Germany Indonesia USA Japan Netherlands Korea Thailand Malaysia
Rank
Malaysia
1995 25.1 183.9 177.7 101.1 164.9 181.8 99.7 227.9 270.1 128 / 217
2000 35.1 1298.8 103.1 205.6 236.0 159.3 504.3 112.0 188.6 176 / 226
2007 44.8 280.7 119.7 255.2 219.8 236.6 138.5 122.6 314.3 142 / 230
2011 72.4 402.9 496.6 224.4 499.3 226.2 149.4 364.1 191.7 204 / 231
11. • Many Malaysian companies (SMEs but also large
corporations) have potential to increase
productivity
• Also can expand business to areas with higher
value added and technological sophistication
• Can be more innovative in services/products as
well as production processes
IMPLICATIONS
11
12. • Why don’t they?
• Companies lack technological knowledge necessary to adopt
state of the art production methods
• There is no market for technological knowledge
• Existing solutions, when available, are expensive, generic
• This makes it hard for companies to
– adopt and develop frontier technologies
– offer new products and services
– enter in new geographic markets
– increase efficiency of production methods12
ASSESSMENT OF MAIN IMPEDIMENT
FOR GOALS
13. • Create a knowledge‐friendly ecosystem
– An environment where knowledge is produced
and diffused from those that have it to those that
need it
13
HOW TO OVERCOME THE KNOWLEDGE
SCARCITY?
15. • Conducted in June (9 projects)
• Broad sectoral coverage: pharma, software, biotech,
utility, OCAM
• Budget: 30‐60K
• Findings:
– Malaysian companies try hard to improve their
technology
– Can benefit from external help
– Much research/knowledge is sitting in universities and
research institutes
– Can be used to provide solutions to companies
technological problems
– This is cheap and efficient15
PILOT STUDIES
16. • FOR Malaysia (companies)
• BY Malaysia (researchers)
• IN Malaysia
16
PPRN
17. • Scale Up
• 1000 projects per year
• 3 months ‐ 1 year
• Co‐financed by companies and PPRN
17
NEXT
18. • Companies bring problems/projects
• PPRN presents project to reserachers
that can solve them
• Researchers present proposals
• Company and PPRN jointly decide best
value/money
• Research team executes project
18
HOW DOES IT WORK?
20. • Consultations where companies invite experts to
explore potential for productivity/efficiency
enhancing projects
• Cost is credited towards future projects
• Reduces burden on company of identifying
technological needs
20
COMPANY VISITS
21. The PPRN will NOT consider
i. Purchase off the shelf machinery or software
ii. Subsidies to conduct product evaluation &
product registration‐ (PPRN can assist in creating
the matching in general, but not contribute to the
cost of the evaluation)
iii. Marketing projects
iv. Management consulting
v. Working capital
vi. Application from Non‐Malaysian owned
companies
22. • Co‐financed by company and PPRN
• Each party contribution will depend on social value
of project, IP ownership, duration
• On average, 50‐50
• Some flexibility on the nature of company’s
contribution (in kind)
• Typically, PPRN will pay half of its contribution at
the beginning and half after mid‐term report
22
FINANCING
23. • Determined (ex‐ante) on a case‐by‐case
basis
• Depending on
– Financing
– Whether significant prior work has been
conducted by reserachers
23
IP
24. • All projects are confidential
• All parties sign NDA agreement
• In addition, companies may prefer to release some
critical information only in face‐to‐face meetings with
researchers
• PPRN may accommodate special confidnetiality
demands
24
CONFIDENTIALITY
25. • Applications considered on a continuous basis
• Send e‐mail to
pprn@moe.gov.my
• Application must contain
– Name of Company
– Main activity
– Description of problem/project
APPLICATIONS
25
27. • Mobilize knowledge from those that have it to those that
need it
• Tap on large existing pockets of knowledge
• A new way to bring knowledge to the market
• Solves the matching problem
• Provide incentives to researchers to engage in applied
R&D
• And to focus on the areas/topics where there is more
market demand
• High Value for money
27
VIRTUES OF THE PPRN
