Industry Focus: Education and social innovation high on new AIM CEO’s agenda

This article first appeared in Enterprise, The Edge Malaysia Weekly, on September 11, 2017 - September 17, 2017.

Some hybrid species have the potential of producing 35,000 nuts per hectare a year as opposed to the Malayan Tall, which produces 7,000

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A week into his role as CEO of Agensi Inovasi Malaysia (AIM), Naser Jaafar was already being bombarded with questions. Was he going to follow in the footsteps of his predecessors and carry out existing programmes? Or was he going to introduce new initiatives? And these were some of the less tetchy ones.

He had expected the queries and had ready answers, he tells Enterprise in his maiden interview since taking the helm from Datuk Mark Rozario. “I told them that I firmly believe innovation is a marathon and that it is a collective effort, which is also what AIM is about. We are here to ensure that the strategies and initiatives we have worked on take a life of their own and carry on long after we cease to exist,” says Naser.

AIM’s initiatives have always been about team effort, he adds. “So, I intend to see all of them through regardless of who initiated them. Along the way, if there are new things that we want to explore, we will do it while being mindful of our resources and timeline.”

Naser had been the agency’s chief operating officer since 2012 before he was handpicked to succeed Rozario, who stepped down in July.  AIM was tasked to boost the country’s innovation ecosystem.

Prior to joining AIM, Naser was a corporate banker at Bank of America for 22 years. In an industry as regulated as banking, taking high risks was not in his DNA and investing in experimental innovation and inexperienced start-ups were downright unfathomable. As a result, his role as head of wealth creation and equity investments at AIM required him to unlearn a lot of what he had been taught.

“I still took up the job. I was required to make equity investments in Malaysian start-ups and the best in innovation out there, as well as help innovations by universities to go to the market for commercialisation, either by arranging a licensing agreement with private investors or giving them the tools they need. I felt that I knew how to do the job because as a banker I knew how to analyse credit and structure loans,” Naser recalls.

But on his first day on the job, AIM’s first CEO Datuk Dr Kamaljit Singh told him that the first thing he had to do was throw out all of his banking experience. “He said it was totally irrelevant because if I used my experience as a banker, I would never be able to do any deals. Bankers need collateral and want guarantors, cash flow and more. But if you are a young start-up, you have nothing but ideas and passion,” says Naser.

Although he struggled to fit in at first, he felt liberated in his new role and gained insight into a world he otherwise would not have known. Today, he faces a bigger and more significant responsibility, which is to ensure that all of AIM’s initiatives persevere long after the agency’s dissolution in 2020.

AIM was established in 2008 with a budget of RM70 million. Later, the government would pump in RM37 million for various initiatives.

Naser is unfazed by the mammoth task of ensuring that innovation is entrenched in both the private and public sectors. AIM started with an emphasis on 13 initiatives, most of which are in progress and moving at a steady pace, he says.

Some of AIM’s prominent initiatives are the investments made by its venture capital arm, Innocorp Ventures Sdn Bhd, in companies like iGene Sdn Bhd (an advanced medical informatics firm) and Bioven International Sdn Bhd (a biotechnology firm), which is currently conducting clinical trials on vaccines to treat lung cancer.

Two of the agency’s initiatives — the Genosis programme and Social Innovation — are progressing into the next phase while its plans to spur the coconut plantation industry have received the nod from its governing council. It also aims to roll out the next phase of programmes by the Genovasi Foundation, which is part of AIM’s initial strategy — “Cultivating a thinking culture” — aimed at inculcating critical and creative thinking. “Education is where we started our journey because we believe that innovation starts with our children,” says Naser.

To expand the reach of its initiative and implement higher-order thinking skills under the strategy, AIM launched the Genosis programme in July. The agency and the Ministry of Education are developing a curriculum for the programme that incorporates the skills taught in AIM’s various schemes such as i-Think, the International Baccalaureate Middle Years Programme and Genovasi Foundation.

The idea behind iThink — a system developed in the UK — was to empower schools by instilling higher-order thinking skills to build a future workforce that is critical, creative, independent and entrepreneurial. It was introduced in 10 pilot schools with 10,500 students in 2012. The number of students trained has since increased to more than four million, says Naser.

Meanwhile, the IB initiative — educational programmes developed by the educational foundation of the same name, which is headquartered in Geneva, Switzerland — focuses on developing intellectual, personal, emotional and social skills in children for academic success. IB was rolled out in 10 pilot schools in 2013 and eight of them have since been certified and recognised as IB World Schools.

Genovasi Foundation is the only design thinking school in Malaysia aimed at encouraging innovation. “We are positioning the foundation to be the accreditation agency that oversees the Genosis programme. We created this programme because if we continue to rely on certifications from bodies such as IB, it will be costly and we will have limited reach. If we want to roll it out to all the schools in the country, it is better if we come up with our own set of practices based on everything we have learnt from the initiatives,” says Naser.

The Genosis programme will be run in 10 pilot schools in Selangor and Negeri Sembilan starting from next year.

 

THE GAME CHANGER

Another crucial initiative that Naser is stewarding comes under the “Innovation for and by society” strategy. Last year, AIM started on its plan to advance the social innovation agenda by leveraging public-private partnerships to better address social issues.

The concept is simple: to shift the design and delivery of social change away from a top-down government-centric approach to a whole-society approach. The target segments are those trapped in deep poverty and forgotten members of society.

“We developed the proof-of-concept based on the RM3 million that was allocated to AIM last year. What we have done is identify seven broad categories of social issues that need to be addressed and the cost of addressing the issues. They are falling prey to abuse, committing crimes, engaging in vice, facing obstacles to employment, education and healthcare and  dealing with adverse living conditions,” says Naser.

“We identified 40 specific issues within the seven categories and invited what we refer to as social purpose organisations (SPOs) to send in proposals for the government to evaluate so that it can provide funding for their social intervention.”

The idea was to establish a more sustainable and innovative financing model, where the government only pays based on the impact results, he says. “For example, there are currently 50 cases of unwanted teenage pregnancies a month and they cost the government at least RM3 million to deal with the issue. Not many realise that there are multiple organisations involved in such cases, not to mention the cost of enforcement, healthcare and baby hatches.

“So, we have identified the outlay and invited SPOs to pitch their ideas on intervention programmes and how much it would cost them to tackle the problem. If the SPOs say it would cost them RM2 million to tackle the problem of unwanted teenage pregnancies, that is already RM1 million less than what the government already spends.”

Naser says AIM will be working with impact investors, such as multinational companies, that are already spending millions on their corporate social responsibility (CSR) programmes. “We then talk to them about the financial assistance required. This is not very different from spending money on CSR campaigns, so we ask them to use the money to invest in these interventions. If the results are achieved within the pre-agreed time frame, the government will pay the impact investors and they can use the money to fund other social projects.”

This should free up taxpayers’ money that can be used for other programmes. By blending charitable impact with investment discipline, one can cause behavioural changes in donation-dependent non-profit organisations, says Naser.

“Money that is seen as an investment causes a change in mindset because I now have to keep tabs on how much I disperse and report on the social return on investment. The SPOs are already very passionate about what they do. So now, they are just being held to a higher standard,” he adds.

“We have also developed a template for the SPOs to measure their success. This makes the process more standardised and harmonised and shows whether you have lived up to your objectives.”  

 

REVITALISING THE COCONUT PLANTATION INDUSTRY

Having had a fair bit of success in getting the National Biomass Strategy (NBS) 2020 and the National Graphene Action Plan (NGAP) 2020 going, AIM is looking to reinvigorate the coconut plantation industry, which took a backseat after oil palm became the country’s top-yielding crop.

As AIM’s mandate also involves stimulating innovation in Malaysia’s strategic sectors, including plantations, Naser says the time is ripe for the coconut plantation industry to make a comeback as consumption and use of the crop continue to rise.

“Malaysia has been blessed. We started with plantations, oil and gas, manufacturing and now the services industry. But what’s next? We don’t want to wake up one day and find the price of crude oil below US$20 per barrel,” he says, referring to the surge in production and plunge in global demand for crude oil in 2014/15 that caused prices to tumble and the country’s export revenues to fall.

Such events are not limited to the oil and gas sector, Naser points out. An adverse report on oil palm cultivation from the European Union, for example, could wipe out the country’s export earnings in the blink of an eye.

The NBS, which aims to capitalise on Malaysia’s strong palm oil industry and upcycle its biomass waste, was launched with the objective of achieving a gross national income of RM30 billion and jobs for 66,000 people by 2020. Some of the ongoing initiatives are the Sabah Biomass Industry Development Action Plan, Sarawak Biomass Industry Development Action Plan, Brooke Renewables 2G Bioethanol Plant and Biomass Joint Venture Cluster.

Similarly, having spotted the potential in an unusual new material called graphene, AIM and NanoMalaysia Bhd (a Ministry of Science, Technology and Innovation incorporated-company) drew up NGAP in 2013 to explore the uses of graphene in five key areas — rubber additives, plastic additives, ultra capacitors and conductive inks, and nanofluids.  

The carbon-based nanomaterial discovered by Andre Geim, who won a Nobel Prize in Physics for it, is a transparent and flexible conductor that holds immense potential for local manufacturers to access and penetrate new markets in the country and globally.

Alongside these strategic sectors, the revival of the coconut plantation industry would enhance Malaysia’s economic position further, says Naser. “Everyone drinks coconut water now and it is not limited to that. Malaysia was one the fifth largest coconut producers in the world, but it dropped to No 10 in 2015.

“That is because the majority of our coconut crop is the Malayan Tall variety, which is only able to produce about 7,000 nuts per hectare a year. But other varieties, some of which are hybrids, have the potential of producing 35,000 nuts per hectare a year. That is a high productivity increase ... and coconut trees can live up to 50 years, as opposed to oil palm trees that have a lifespan of 20 years.”

This can be further improved with advances in farming techniques such as precision farming, he says. “I don’t think Malaysia will phase out oil palm — or rubber for the matter — in favour of coconuts, but we can find a balance because if you are too dependent on one commodity, the effect on the economy is immense if the price suddenly drops. So, we need to harmonise all our key crops.”

Thus, under his watch, AIM will spend time and effort beefing up the coconut plantation industry.

The effects of these initiatives will only be felt long after AIM’s mandate ceases in three years, which is why it is important for Naser to ensure that the foundations are strong and built to last.