Upgrading Malaysia’s Rubber Manufacturing: Trajectories and Challenges

Changing Resource-Based Manufacturing Industry: The Case of the Rubber Industry in Malaysia and Thailand

“…Rapid industrialization and urbanization in Southeast Asia since the 1990s, as well as the economic growth of China and India, boosted the demand for rubber in the manufacturing of tires and other industrial goods. From the late 20th century, moreover, awareness of the risks of HIV/AIDS, SARS, and avian influenza, as well as advances in medical technologies, raised the demand for medical examination gloves and condoms (Kano 2014;Kawano 2017). The world's NR consumption increased from 5.4 million tons in 1993, to 8.7 million tons in 2005, to 12.15 million tons in 2015 (IRSG various years).…”

“…Both firms initially acquired basic knowledge and technology from the MRB. At the intermediate stage, they gained from public assistance in the provision of technologies of practical use (Kawano 2017). However, at the highest upgrading stage, Top Glove and Kossan relied on their own efforts to develop human resources and in-house R&D and to formulate business strategies to secure niche markets in the developing countries or low-income countries not targeted by multinational pharmaceutical companies.…”

“…Top Glove and Kossan departed from the "catching up" strategy central to the East Asian development model; their business strategies combined catching up and reaching down to create original development styles. Their development paths indicate alternative ways of acquiring and creating the technological and managerial capacity to innovate (Kawano 2017).…”

Responses to the Middle-Income Trap in China, Malaysia, and Thailand

“…In addition, the percentages of R&D expenditure against nominal GDP are stagnant-1.03% in 2010 and 1.30% in 2015, lower by far than those of China (see Table 2.1). As Kawano introduced interesting examples of local private firms' activities in the natural rubber industry, Malaysia has begun to promote notable innovation in resource-based industries (Kawano 2017). However, carefully examining these case studies, we recognize that local private firms (Top Glove and Kossan) have mainly developed niche products, such as medical surgical gloves, with the improvement of imported technology rather than new products with new production technology.…”

Globalization and the Emerging State: Past Advance and Future Challenges

“…One way out of this impasse involves building and strengthening downstream processing industries. The oil palm industry and the rubber industry in Malaysia, and the food processing industries in Thailand, are successful cases in this respect (Rasiah 2006;Oikawa 2015;Kawano 2017;Suehiro 2017;Intarakumnerd 2017). However, as the case of Chile shows, the development of resource processing industries may face limitations unless the benefits of their development spill over into more technologically advanced sectors.…”