Innovation Matters: Time to hit the refresh button

This article first appeared in Enterprise, The Edge Malaysia Weekly, on June 11, 2018 - June 17, 2018.
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Malaysia set forth a national agenda for the formation of a knowledge-based economy. Subsequently, many policies were formulated, many organisations were created and large investments were made to ensure that this would become a living reality. Regardless of these activities, the big question is whether we have actually succeeded in turning Malaysia into a knowledge-based economy, considering the effort and resources expended.

A comprehensive and pragmatic assessment of the national innovation ecosystem is needed. However, a quick look at the existing Malaysian innovation landscape reveals many factors that have crippled the system and, surprisingly, the same factors have been consistently disregarded. It is time to take a serious look at some of the pressing issues and address them to refine and reform the local innovation landscape.

A national innovation strategy must be formulated carefully to suit the subtleties of a country’s culture, economy, talent pool, research capability and ability to invest in innovation in the long run. It undoubtedly involves vigilant evaluation, strategic planning, structured implementation and efficient execution of a sound national strategy to underpin innovation.

That is because national innovation ecosystems differ by country and are very much influenced by culture, effective policy and research strategies. They require a systematic approach, in which policy consensus must be built on a clear understanding of how the nation’s innovation ecosystem functions. Many of these elements are still missing in the Malaysian innovation landscape and need to be addressed as a matter of urgency.

First, it is undebatable that a national framework for intellectual property (IP) development and protection forms the backbone of an innovation-driven economy. The scenario in Malaysia has been less than optimistic on this front.

The widespread awareness of the importance of intellectual property protection is still lacking, especially among Malaysian SMEs. SMEs that are innovative and understand the importance of IP protection struggle to protect their IP rights in the face of the high costs incurred. The lack of a systematic approach and an organisation to take the lead in helping industry as well as academia in the valuation of IP rights have crippled many industry-academia technology transfer deals.

Statistics made available on the Intellectual Property Corporation of Malaysia (MyIPO) website (www.myipo.gov.my/en/statistic) reveal that Malaysian citizens actually own a mere 11% of all patent applications filed from 1986 (since the inception of MyIPO) to August 2016 (latest available data) with a staggering 89% of all applications lodged by foreign applicants. The data also indicates that 93% of the foreign applicants received patent grants while only 7% were grants for Malaysian applicants. The above is a clear indication that sensible strategies have neither been designed nor implemented to improve the protection of the nation’s intellectual capital.

It also indicates that the existing intellectual capital in the country is currently owned by foreign entities/owners. On the university front, a key decline in filing new patent applications is seen due to significant budget cuts imposed on universities and public research institutes, indicating the unwillingness of policymakers to prioritise investment in the continued development of the national intellectual capital. Thus, Malaysia needs to develop new frontiers, new strategies, a coherent policy framework and an enhanced support system for IP development and protection.

Second, collaboration is an essential element in formulating a sensible national innovation strategy. This constitutes inter-collaboration between the elements of the quadruple helix — government, academia, industry and the people — as well as intra-collaboration within the entities/members themselves. However, the scenario has been somewhat different, at least in the public sector. Many entities that were formed to support innovation have chosen to work in isolation and not in collaboration.

Any effort made by an organisation to create synergy through collaboration has been treated as “You are treading on my toes” or “This is my mandate, so don’t step in”. Moving forward, such bureaucracies and mentalities should not be entertained. We need to build a streamlined innovation support system where all parties work in coherence and collaboration.

Those entities that resist such efforts should be removed from the system and entities that encourage collaboration should be rewarded. A somewhat sterile and a structured ecosystem can be developed over a period of time where existing organisations are reformed and streamlined with one another to support academia and industry to innovate.

What has taken place is quite the opposite — organisations have been formed on an ongoing ad-hoc basis, with no streamlining of roles or purposes, and this has led to much wastage of public funds while confusing industry players and the people in general.

Entities have been formed to support innovation under ministries that have no relevance to innovation nor industry development. There has been no umbrella approach to addressing the needs of the Malaysian innovation ecosystem and this very gap has led to the disassociation of organisations that should have worked together for shared national interests and goals.

Third, skills are of paramount importance. Innovation cannot and will not happen without access to the right talent pool. What we often see is quite the contrary. Many organisations have failed to identify the appropriate leaders with the right experience, knowledge and background to lead national innovation initiatives.

Innovation has been coined globally as “open” innovation in recent times. It means that we should be looking for knowledge, expertise and skills beyond the boundaries of our organisations as well as beyond the shores of the country if these skills need to be brought from elsewhere and then diffused into the system over a period of time. The mammoth task of leading national innovation initiatives should not fall into the hands of those who do not understand innovation and who do not have the relevant experience, knowledge and background in driving innovation.

Such manifestations will only lead to the failure of national initiatives and result in much wastage of public assets. Leaders of innovative organisations as well as those who are to drive national innovation initiatives need to be identified based on their relevant professional skills and experience as well as their ability to lead successfully with no other qualifying criteria.

These leaders must be experienced in technology transfer, commercialisation, understanding and refining policies and contribute to formulating new policies, IP management and innovation strategy to successfully execute initiatives on a national scale.

Fourth, we need to identify metrics and measurements of innovation success and implement sound monitoring and evaluation frameworks to measure the impact of innovation at the national level.

As it stands, many agencies have failed to keep track of the outputs, outcomes and impact of their billion-ringgit initiatives over time. What is even worse is that such failed initiatives have been consistently supported without proper review and assessment of their impact (or the lack of it) for extended periods of time.

However, the implementation of metrics and measurements alone is not sufficient. The caretakers of national initiatives must be sufficiently skilled to re-innovate, redefine and reform their initiatives for improving efficiency and effectiveness of the initiatives. Without such skilled involvement, most initiatives will bear no fruit for the resources expended in the name of national service.

The list goes on. In addition to the above, embracing openness, introducing incentives, improving the national R&D capital and refining national policies, including labour, trade and tax policies, come into play. The government, academia, industry and the people need to work closely in collaboration and coherence to create a vibrant innovation-led economy. It is an amalgamation as well as a streamlining of all these elements that will create a well-orchestrated innovation ecosystem that will bring much fruit in the medium to long term.

Finally, the expression of the above observations is not to demean what we have achieved in the space of innovation. Rather, it is to point out that we can do far better and for this, we need to address some serious issues and gaps in the existing innovation ecosystem. Strategically streamlined policies, organisations and initiatives with the right leadership for each organisation could well result in a lean innovation model for the country.

The country may have other priorities right now, but let’s not put the matter of innovation on the backburner. It is time to hit the refresh button.


Dr Viraj Perera is CEO of national technology commercialisation platform PlaTCOM Ventures Sdn Bhd