Research, Development and Innovation in Malaysia: Elements of an Effective Growth Model

Abstract

The purpose of this paper is to examine the relationship between research and development activities in Malaysia and the country's economic growth record. In particular, the paper lays out the changes in the growth model Malaysia adopted to make the transformation from an agriculture-based to a technology-based economy, thereby moving up the value chain. Notwithstanding data sparsity, this paper makes an effort to quantitatively examine the relationship between research and development and innovation activities in Malaysia by running simple linear regressions and multiple regressions to capture the impact of these variables on the GDP per capita variations. The paper notes that Malaysia has managed to achieve significant progress in its development efforts and in transforming its economy from an agrarian-based economy into a more diversified economy with a greater role for knowledge intensive activities, research and development, and innovation. Concluding that R&D and science and technology indicators have been associated with economic development indicators, the study proposes that further research be conducted to gauge the role of public sector intervention as well as the business sector R&D and innovative activities separately, and preferably at the sectoral level, where data would probably be more available than at the national level.

Innovation and economic performance in MENA region

“…For example, scores on international tests is low, especially in math and science. In addition, education does not graduate students with qualified skills (Pissarides, 2015 [7]; Achoui, 2009). There is a scarcity of local graduates in technical and vocational training programs, and especially in resource-rich countries, domestic workers are less inclined to take jobs in the private sector.…”

“…Many empirical studies investigated the relationship between innovation and economic performance at the regional, country and firm levels. Generally, there is a kind of consensus in the literature on the positive impact of R&D and innovation on economic performance (Nadiri, 1993;Griliches, 1992Griliches, , 2000Jones and Williams, 1998;Okubo et al, 2006;Maza et al, 2013;Wang and Wu, 2015;Akoum, 2016). However, some studies doubted about the robustness of this positive relationship between R&D and economic growth (Scherer, 1999;Braunerhjelm, 2011;Pessoa, 2010;Ejermo et al, 2011;Westmore, 2013), especially in developing countries, arguing to the low level of development of these countries.…”

The Influence of Soft Skills on Employability: A Case Study on Technology Industry Sector in Malaysia

“…The economy of Malaysia has shifted from relying on the agricultural system and exports of raw materials to a diversified economy that includes the export of high-precision electronics. This is due to the adoption of research and development in Malaysia which played a major role in pushing forward a knowledge-based economy (Akoum, 2016). The technology industry sector is the future of manufacturing, where conventional models are making the way for greater technology adoption for efficiency and flexibility towards sustaining competitiveness in labour market (Ministry of International Trade and Industry [MITI], 2018).…”

Integrated Model To Analyze FDI Role In Success of Commercialization of High-Tech Innovations in Asia

“…Economic entity with high levels of innovation will be more independent in the market and more aggressive towards competition (Igor, 2005), this is because they are more productive in developing new products or making significant improvements to existing products by conducting R&D activities. Look at how Malaysia is no longer dependent on exports of its natural resources but has switched to the exports of high tech by conducting R&D activities (Akoum, 2016).…”