Knowledge Cluster Formation as a Science Policy in Malaysia: Lessons Learned

Abstract

Regional science policy aims to create productive knowledge clusters, which are central places within an epistemic landscape of knowledge production and dissemination. These so-called K-clusters are said to have the organisational capability to drive innovations and create new industries. Many governments have used cluster formation as one of their development strategies. This paper looks at Malaysia's path towards a knowledge-based economy and offers some evidence on the current state of knowledge cluster formation in that country. If the formation of a knowledge cluster has been the government policy, what has been the result? Is there an epistemic landscape of knowledge clusters? Has the main knowledge cluster really materialised? Data collected from websites, directories, government publications and expert interviews have enabled us to construct the epistemic landscape of Peninsular Malaysia, and Penang in particular. We identify and describe several knowledge clusters with a high density of knowledge producing institutions and their knowledge workers. An analysis of the knowledge output, measured in terms of scientific publications, patents and trademarks, shows that knowledge clusters have indeed been productive – as predicted by cluster theory – although the internal working of clusters require further explanation.

Multimedia Super Corridor, Malaysia

“…Malaysia's largest KBUD initiative is the MSC project (Evers, 2011;Phelps and Dawood, 2014). It covers an area of about 750 km 2 and is a hub designed to promote multimedia products and services by bringing together the legislative framework and next-generation telecom infrastructure.…”

“…Cyberjaya is planned to accommodate approximately 240,000 residents and a working population of 10,000 foreign knowledge workers. Cyberjaya consists of designated zones for housing, enterprise, open space and greenery, research and government institutions and commerce and businesses (Evers, 2011). The development aims to create a multimedia catalyst center for global R&D and design, with the capacity to be the operational headquarters for multinational firms.…”

“…The former includes five years' exemption from Malaysian income tax, renewable to 10 years, or a 100 per cent investment tax allowance for up to five years on new investments made in MSC knowledge hub cities, duty-free import of multimedia equipment as well as R&D grants for local SMEs. Meanwhile, non-financial incentives are also given and they include unrestricted employment of foreign knowledge workers, freedom of ownership, freedom to source capital globally, intellectual property protection, execution of cyber laws and a healthy physical environment (Evers, 2011).…”

Persistent Developmental Limits to Devising Policy Innovation for Innovation Policies in Emerging Economies

“…industrial clusters in the main regions, a science & technology (S&T) hub "Multimedia Super Corridor (MSC)" was built in 1995, including a subsequent establishment of an information & communication technology (ICT) hub Cyberjaya in 1999(Evers & Gerke, 2015). The MSC has attracted more MNEs to operate in Malaysia(OECD, 2013).…”

“…Yet, a deficient proportion of R&D expense by around a little over 1% of the GDP contributes to the slow increase of R&D activities and a very small number of granted patents.Malaysia has tie-in commercial and industrial linkages to other ASEAN countries, in particular Singapore, in addition to Japan, China, and India. With a strong focus of Malaysian industrial policies on FDI flow and knowledge spillover managed by MNEs through these international linkages(Cherif and Hasanov, 2015), efforts of creating Malaysian owned technology innovations by low absorptive capacity small and medium enterprises (SMEs) are undermined(Hashim, 2012; OECD 2013).Large MNEs in Malaysia do not necessarily lead to an effective way of knowledge and technology transfer to domestic firms(Thiruchelvam, 2011).R&D activities in MNEs are tightly conducted at their headquarters outside Malaysia, which have hindered further knowledge spillover to domestic firms and made the MSC fail to enhance interactions between multiple innovation actors(Evers & Gerke, 2015;Yusof, 2013).Approaching the ultimate achievement year of the Vision 2020 of Malaysia as an industrialist country, private sectors therein have increased their export. However, there have been widening discrepancies compared to their import volumes.The discrepancies might bring less harm directly to Malaysia's development.…”