November 19, 2009 15:36 PM

Malaysia Could Take 5 To 10 Years For An Innovation Hotspot

PUTRAJAYA, Nov 19 (Bernama) -- It could take five to 10 years to create an innovation hotspot in Malaysia, says a world economic expert.

An Economic Advisor of the World Bank Institute, Dr Shahid Yusuf, said an innovation hotspot was an important aspect in producing high-tech products that could contribute to the country's economic growth.

"International statistics hardly notice any research and patent on innovation from Malaysia," he said during the National Economic Advisory Council (NEAC) Talk at the Putrajaya International Convention Centre.

He said universities, research institutes, research culture on innovation activities in Malaysia were still weak at the moment.

Strong political commitment, raising the quality of education, creating one or two elite universities, generous research funding and a culture open to new ideas and highly supportive of technological change are the important factors that will contribute to a successful innovation hotspot, he said.

Dr Shahid defined innovation hotspot as an urban area rich with technological findings and has the entrepreneurship to convert some of these into commercial innovations.

"Some say you need a concentration of "nuts" in one area to produce things that can be commercialised worldwide," he said in jest.

In climbing the technological ladder, he said, Malaysia required outgrowing technology dependency and increasing the role of home grown technology and home grown firms.

"FDI (foreign direct investment) can help but thus far spillovers have been weak," he said.

He said Malaysia could also focus her innovation in resource based and medium-tech products in which the country has a comparative advantage such as palm oil and rubber.

In facing the current global economic recession, Dr Shahid said Malaysia had three options.

One, it could passively adjust to lower trend rates of growth of between three and four per cent per annum that are primarily domestic demand-led.

Or it could aggressively sharpen the current comparative advantage in manufactures and promote the current mix of exports.

It could then again also actively pursue a strategy of diversification into high-tech products and services with better export and productivity prospects, he suggested.

The setting up of the innovation hotspot will be important if the country is looking into the third option, he said.

"Moderately high growth rates are unlikely with an inward looking, consumption and services led strategy," said Dr Shahid, adding that this was based on the reduced demand expected from the West.

On Tuesday, Prime Minister Datuk Seri Najib Tun Razak said the National Innovation Centre (MyNIC) would be launched in the first quarter of next year in developing further the country's science and technological capabilites.

He had said that the centre would cut accross the fields including biotechnology, information communication technologies (ICT), animation and agriculture.

The emphasis of MyNIC should be on the development of intellectual capital and content, the prime minister had said.

-- BERNAMA

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