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Malaysia has grown tremendously over the past few decades because of its transformation from being predominantly agriculture-based in the 1970s to being manufacturing-based and modern services-based in the mid-1980s and 1990s, respectively. These achievements are attributable to the 10 Malaysia Plans covering 1966-1970 through 2011-2015. Presently, Malaysia is in the midst of a transformation phase to become an innovation-driven country in the fast-changing global environment. Therefore, understanding sources of growth patterns is indeed important to ensure that Malaysia’s development is on the right path. Thus, this paper emphasises the importance of innovation and its framework, which comprises three components: technological innovation, financial innovation and electricity sector (TFE). Furthermore, this study aims to highlight the innovation policies and strategy choices in Malaysia. It is apparent that well-planned strategies and relevant policies must be supported by all institutions and parties. It is hoped that a clear picture of innovation issues, policies and strategies can shed light on the progress of innovation in Malaysia.
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AbstractMalaysia has grown tremendously over the past
few decades because of its transformation from being
predominantly agriculture-based in the 1970s to being
manufacturing-based and modern services-based in the
mid-1980s and 1990s, respectively. These achievements are
attributable to the 10 Malaysia Plans covering 1966-1970
through 2011-2015. Presently, Malaysia is in the midst of a
transformation phase to become an innovation-driven country
in the fast-changing global environment. Therefore,
understanding sources of growth patterns is indeed important
to ensure that Malaysia’s development is on the right path.
Thus, this paper emphasises the importance of innovation and
its framework, which comprises three components:
technological innovation, financial innovation and electricity
sector (TFE). Furthermore, this study aims to highlight the
innovation policies and strategy choices in Malaysia. It is
apparent that well-planned strategies and relevant policies must
be supported by all institutions and parties. It is hoped that a
clear picture of innovation issues, policies and strategies can
shed light on the progress of innovation in Malaysia.
Index Terms—Electricity consumption, financial innovation,
innovation factors, technological innovation.
I. INTRODUCTION
The need to understand sources of growth has become
imperative to explain world economic growth patterns [1].
Growth can be attributable to fundamental forces like
increases in the factors of production, improvements in
efficiency of allocating the factors of production and the rate
of innovation [2]. Innovation consists of any kind of creation
or diffusion of new products and any significant contribution
to the production process or method [3], [4]. It also provides
new businesses, new productions, new opportunities and new
jobs. In addition, it is more productive, more resistant, more
flexible and more adaptable to change, which may put off
diminishing returns [5], [6] and at the same time enable
support for a higher living standard [7]. Thus, innovation can
allow countries to grow consistently at a sustained rate.
Recently, there has been growing awareness among all
countries and policy makers, including Malaysia, regarding
innovation, as it is the key driver of long-term economic
growth [8]-[10]. The rising concerns about innovation issues
have focused on the question of instability of a country’s
growth trend and how this indicator of innovation can sustain
the growth trend for the long term. Past studies [11]-[15]
have revealed a significant nexus between innovation and
economic growth which confirms that innovation is of key
importance for sustainable growth. The growing interest in
innovation is the result of economies experiencing the limits
of traditional input factors (capital and labour) to uphold
productivity and growth in the long run [16]. It is important
to understand that innovation, productivity and efficiency are
related to each other. Innovation raises productivity through
new or improved processes, technologies and business
models [17], whilst productivity refers to total factor
productivity (TFP) (producing more output), which is
determined by efficiency in producing the product (with less
input) [18].
Innovation has broad meaning, perspective and
measurement and the definition of innovation has changed
impressively over time [3], [19], [20]. Innovation is the most
difficult part of the growth model in terms of measurement
and materialisation [10]. The idea of innovation encompasses
not only technology innovation, but also services and
infrastructure such as financial sectors and electricity. These
support systems (financial sector and electricity) provide an
efficient foundation and are included in an integrated
platform [21]. According to [1], an adequate description of
the economic system must cover resources, energy flows and
money flows. Reference [22] stated that financial sector
development plays an important role to promote and support
technological innovation and economic development in the
country. The key ideas of financial innovation are to establish
efficient institutions, operate self-sufficiently, be more
flexible and support customer needs [21]. Furthermore, [23]
suggested that the government should focus on electricity
infrastructure and encourage technology innovation to ensure
a sufficient electricity supply for the country’s development.
Therefore, these indicators (i.e. technological innovation,
financial innovation and electricity) are discussed in detail
(see Section III).
In this fast-changing global environment, appropriate
policies are important to ensure improvement of innovation
and sustain long-term economic growth [24]. Thus, these
issues have become an important agenda of policy makers in
both developed countries [25], [26] and developing countries
[27]-[30]. Therefore, a need exists to promote and strengthen
development in developing countries through innovation.
The extant literature has suggested that the rate of innovation
has lagged behind in several developing countries [31]-[34].
Furthermore, [35] argued that developing countries should
encourage innovation by developing technological, social
Highlighting Innovation Policies and Sustainable Growth
in Malaysia
Hussain Ali Bekhet and Nurul Wahilah Abdul Latif
International
Journal of Innovation, Management and Technology, Vol. 8, No. 3, June 2017
228
doi: 10.18178/ijimt.2017.8.3.734
Manuscript received March 1, 2017; revised May 30, 2017.
Hussain Ali Bekhet is with Graduate Business School, College of
Graduate Studies, Universiti Tenaga Nasional (UNITEN), Kajang 43000
Malaysia (tel.: 603-89287326; fax: 603-89212064; e-mail:
Profhussain@uniten.edu.my).
Nurul Wahilah Abdul Latif is with College of Graduate Studies,
Universiti Tenaga Nasional (UNITEN), Kajang 43000 Malaysia (e-mail:
nurulwahilah@uniten.edu.my).
and financial innovation.
A country that has either advanced technology or the
capability to produce innovative products or high absorption
capabilities [10], [36], [37] has an advantage. Based on
Global Innovation Index (GII) rankings, Switzerland,
Sweden, the United Kingdom (UK), the United States (US),
Finland and Singapore are ranked as the most innovative
countries in the world [38]. This achievement is attributable
to continuous investment and effort towards innovation
quality.
Fig. 1. No. of patent applications (‘000) GII the most innovative countries
[39].
Fig. 1 shows that the number of patents of five leading GII
countries grew at a moderate rate due to enhancement in
innovation quality in these countries. The number of patents
grew at a moderate pace of 3%, 2%, 2%, 2% and 1% for
Finland, Sweden, Switzerland, the US and the UK,
respectively, for the 1985-2014 period.
Fig. 2. No. of patent applications (‘000) Korea, Japan, China, Singapore
and Malaysia [39].
Meanwhile, Asia Pacific countries have improved their
competitiveness in recent years and emerged as the fastest
growing region [38]. Singapore leads the GII ranking in the
region at 6th, followed by the Republic of Korea (11th),
Hong Kong (China) (14th) and Japan (16th). Accordingly,
the ranking among upper middle-income economies is led by
China (25th), followed by Malaysia (35th) and Thailand
(52nd). Fig. 2 shows that China’s number of patents grew at
the fast rate of 20% per year from 1987 to 2014, followed by
Korea (19%), Singapore (14%), Malaysia (14%) and Japan
(3%) during the same period. Furthermore, China leads the
middle-income countries in terms of innovation quality (17th
place). China’s progress reflects the effort the country has
made in innovation performance enhancement, especially in
quality of universities, number of scientific publications and
international patent filings [38].
In Malaysia, innovation has been encouraged by the
government since the 5th Malaysia Plan (MP; 1986-1990).
The recent 11th MP (2016-2020) discusses the interest in
innovation from the Malaysian government, policy makers,
institutions, researchers and academicians [17]. In 2000,
Malaysia’s gross expenditure on research and development
(GERD) was 0.5% and increased to 1.26% by 2014 [40]. In
2016, Malaysia was ranked 35th out of 128 countries by GII.
Korea and China had allocated a greater amount of gross
domestic product (GDP) to research and development than
Malaysia.
Fig. 3. The R&D intensity for Korea, China and Malaysia [39], [40].
Korea’s GERD increased from 2.18% in 2000 to 4.29% in
2014, whilst China’s GERD improved from 0.9% in 2000 to
2% in 2014 (Fig. 3). GERD grew at the fast rate of 12% per
year for Malaysia, as compared to Korea (10%). This means
that Malaysia as a developing country has ample
opportunities to shift paradigm in terms of innovation to
accelerate sustainable growth. In Malaysia, progressive
transformation is aiming to focus on innovation growth and
moving towards vision 2020.
References [20], [41], [42] highlighted the rising
innovation concerns in Malaysia, such as the innovation rate
lagging behind and even innovations being slow to
materialise and heavily dependent on technology transfer
from other countries. Reference [43] suggested that the best
alternative approach for the country to keep growing is to
continuously expand innovation. This is because innovation
in the form of ideas creates value, which provides
opportunities of new jobs, production and techniques, among
other benefits [44]. Therefore, even though innovation has a
broad perspective and is difficult to measure, it is by far the
best solution for the country to achieve sustainable growth
[10]. Fig. 4 shows that the Malaysian economy is still reliant
on capital and labour instead of multifactor inputs, which
contributed about 70% of GDP growth. It also shows that the
growth rate of capital was 2.4% and 2.6% in the 7th MP
(1996-2000) and 10th MP (2011-2015), respectively. The
growth rate of labour was 1.2% in the 7th MP and dropped
about 0.1% to 1.1% in the 10th MP; it is targeted to reduce
further to 0.9% in the 11th MP. These inputs (capital and
labour) are necessary for production, but multifactor
productivity (MFP) such as technological innovation is rather
important to ensure that the country will achieve sustainable
growth. This is because the use of capital and labour, even
though increasing, did at one point reach diminishing returns
in production [45].
International Journal of Innovation, Management and Technology, Vol. 8, No. 3, June 2017
229
Fig. 4. Malaysia’s sources of growth, (2010=100) [17].
The 11th MP is targeted to increase MFP, whilst reducing
capital and labour as compared to previous Malaysia Plans
(Fig. 4). MFP to GDP growth is targeted to increase to 40%,
whereas capital and labour are likely to drop to 44% and 16%,
respectively. The Malaysian government has emphasised
multifactor productivity input up to 2.3% in the 11th MP,
with clear outcomes at all levels (national, industry and
enterprise) [17]. Therefore, it is a great challenge for the
government to formulate suitable strategies to uplift the
innovation rate and further to ensure the effectiveness of
innovation implementation.
Based on the above discussion, this study aims to provide
insights into innovation progress and the importance of the
innovation rate to attain sustainable growth in Malaysia.
Furthermore, it reviews Malaysia’s development,
technological progress, financial development and electricity
consumption. This study also aims to highlight the
technological innovation, financial innovation and electricity
consumption policies and strategies adopted in Malaysia.
The rest of the paper is organised as follows. Section II
reviews Malaysia’s development, technological progress,
financial development and electricity consumption. Section
III discusses the policies of technology innovation, financial
innovation and electricity consumption in Malaysia and,
finally, policy implications and conclusions are presented in
Section IV.
II. OVERVIEW OF MALAYSIA ECONOMY
A. Malaysia Development
Malaysia has experienced tremendous achievements for
the last few decades despite several challenges. The
country’s economy has transformed from an agriculture- and
mining-based economy in the 1970s to being
manufacturing-based and later to modern services in the
mid-1980s and 1990s, respectively [46]-[49]. This
remarkable achievement is due to consecutively planned
government policies and strategies [1st MP (1966-1970) to
11th MP (2016-2020), and much further, to the New
Economic Policy (NEP) [1971-1990], National Development
Policy (NDP) [1991-2000], National Vision Policy (NVP)
[2001-2010] and National Transformation Policy (NTP)
[2011-2020] [50] supported by the New Economic Policy
(NEM), Economic Transformation Programme (ETP) and
Government Transformation Programme (GTP), as well as
the Malaysian National Development Strategy (MyNDS).
The Malaysian economy experienced a stable GDP growth
rate of 5.8% per year from 1980 to 2015 (Fig. 5). This was
due to higher domestic demand and private sector
expenditures during the period and GDP is targeted to grow
to 5%-6% during the 11th MP (2016-2020). In addition, the
Malaysian economy experienced a tremendous transition
development process from a low-income country in the
1970s to a high middle-income country in 1992, but this has
remained deliberate since 1997 due to Asian financial crisis
(AFC) [1997-1998] [51].
Meanwhile, the growth rate of Malaysia’s population has
been 2.3% per annum since 1980. Its population rose from 14
million people in 1980 to 30.5 million people in 2015 (Fig. 5).
This likely shows that population growth in the country is
associated with the GDP growth trend, which is targeted to
reach 32.4 million in next five years [52]. In general, rapid
economic growth must be accompanied by growing
populations, which, in turn, increase the supply of workers
and consumers [53].
Fig. 5. Time trend of GDP and population for the (1980-2015) period [54].
It is essential to have well-structured and efficient
infrastructure to drive economic development [55]. In
Malaysia, domestic investment has increased tremendously
at an average annual growth rate of 7% per year for
1990-2014 (Fig. 6). Large investments have been made in
transport, digital and energy infrastructure due to rising
demand from the society and all sectors [17]. Necessary
infrastructure, like roads, railways, water and electricity, was
expanded to reach all communities. Currently, the
government is in the midst of planning a strategic
development framework (SDF) for the high-speed rail (HSR)
project linking Kuala Lumpur and Singapore [56]; this
project outlines the direction of socio-economic
development.
Fig. 6. Domestic investment and Malaysia labour force for the (1990-2014)
period [52].
Meanwhile, labour (human capital) plays a significant role
in absorbing knowledge and technology know-how to boost
economic growth [57], [58]. Malaysia’s labour force has
steadily increased from 7 million in 1990 to approximately 14
million in 2015 [52] with an average annual growth rate of
3% between 1990 and 2014 (Fig. 6). Capital and labour share
the same growth trend, but the labour growth trend is more
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230
stable than the capital trend during economic shocks.
Furthermore, [17] recognised that skilled workers, who
include managers, professionals, technicians and associate
professionals, accounted for 28% of total employment in
Malaysia; this group is targeted to account for up to 35% for
the next five years to become high-value-added industries
towards vision 2020.
According to [59], [60], trade openness and foreign direct
investment (FDI) provide strong impetus for economic
development. Both facilitate technology transfer, provide
access to foreign markets and stimulate innovations.
Malaysia has a good performance in trade openness (i.e.
export and import). Malaysia’s exports and imports have
grown strongly, both at the rate of 12% for the 1970 to 2015
period (Fig. 7). In 2014, export and import are approximately
RM771 billion and RM676 billion, respectively, and are
estimated to increase up to RM875 billion and RM784 billion,
respectively, in 2020 [17].
Fig. 7. Time trend of export, import and inward FDI for the (1970-2015)
period [52], [61].
Furthermore, the Malaysian government has developed an
important and strategic strategy to accelerate economic
growth by attracting FDI throughout the period. Trade and
liberalisation of FDI were important strategies behind
Malaysia’s successful achievement throughout these years.
These strategies improved the manufacturing sector,
specifically the electronic and electrical sectors [62]. The
inflow of FDI from other countries benefited Malaysia as it
brought better technology know-how [63]. Also, Fig. 7
shows that FDI grew at a moderate rate of 5% per year during
1970 to 2015. FDI remained an important source of
investment as [17] recorded that the total amount of FDI
inflow in Malaysia was RM35 billion in 2015. In addition,
the government launched the ETP with the aim of attracting
investment into Malaysia.
B. Technological Progress
Innovation has a variety of proxy measurements. Among
the commonly used parameters are patents and research and
development, which represent output and input indicators,
respectively [11], [64], [65]. Patents are considered an
informative indicator to show technological efforts of the
country [20]. In view of the significant role of patents in
promoting innovation, the Intellectual Property Cooperation
of Malaysia (MyIPO) was established in 2003 [66]. Fig. 8
shows that total number of patent applications grew steadily
at 14% per year during 1988-2014. Overall, it shows that the
patent indicator has been in an upward trend since 1988 in
Malaysia. In addition, scientific and technical journal articles
(STJAs) and trademark applications can represent
technological innovation as well. STJA shows how human
capital can engage the knowledge gained to create value and
innovation, make a profit and thus make the economy more
competitive. Fig. 8 shows that scientific and technical journal
articles and trademark applications grew moderately at an
average rate of 19% and 6%, respectively, during 1986 to
2014. The scientific and technical journal articles and
trademark applications show an upward trend throughout the
above period.
Fig. 8. Number of patents, trademark applications and scientific and
technical journal articles for the (1986-2014) period [7], [61].
According to [67], the GERD anticipated by the
government has a significant impact on long-term economic
growth. The higher the GERD anticipated from the
government, the greater the investment in new ideas,
innovation and invention, which indeed will benefit the
country. However, innovation involves the expenditure of
time and money and the imposition of risk to achieve the
awaited breakthrough which has a significant positive impact
on TFP [68]. The research and development (R&D) intensity
is the percentage of gross expenditures for research and
development to gross domestic product (GERD/GDP). Fig. 9
shows the gross GERD/GDP, which grew at 13.5% per year
for 1992-2014. In 2014, it was increased to 1.26%, as
compared to 2000, when it was at only 0.5% [41]. Thus, one
can see an upward trend of the GERD/GDP proxy moving
slowly during the aforesaid period.
Fig. 9. The R&D intensity [40].
C. Financial Development
The financial sector acts as an intermediary for the flow of
funds in the economy. The efficiency of the financial sector is
essential to ease capital accumulation, offers saving and
investment mobility [69], [70] and helps to finance tangible
and intangible investments, thus enabling innovation [22].
Lack of credit availability may affect the resource allocation
and further reduce investment [71]-[74]. As innovation needs
a significant amount of investment, financial innovation is
indeed important to enable the fast transaction needed. This
study considers M2 [narrow money (M1), savings deposits,
small denomination time deposits], M3 (M2 plus large time
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231
deposits) and domestic credit to private data to represent the
banking sector, whilst market capitalisation (MC) and stock
traded (ST) represent the stock market to measure financial
development [75]. The money supply in the economy is
proxied by money and quasi-money (M2) and the volume of
the financial sector is indicated by M3. Fig. 10 shows that the
broad money of M2 and M3 grew steadily at 10.6% and 8.6%,
respectively, for the 1997-2015 period.
Fig. 10. Broad money, M2 & M3 for the (1980-2015) period [76].
Domestic credit to private sector (DCPS) is loans and
non-equity securities provided to the private sector by
financial institutions. The private sectors have the
opportunity to develop and grow by using facilities provided
by financial institutions, which indeed has an impact on the
economy of the country as a whole. In Malaysia, the DCPS
has grown steadily at 8% per year (Fig. 11) and shows
significant movement for the (1981-2015) period.
Fig. 11. Domestic credit to private sector, Market capitalization & Stock
traded for the (1981-2015) period [61], [39].
Meanwhile, MC is the total market value of a company’s
outstanding shares, which shows the size of the company. An
understanding of company size is important to investors to
derive a basic determinant of various characteristics of the
company, including risk. Fig. 11 shows that MC has an
upward trend throughout the years, growing gradually at 9%,
whilst ST grew at 12% for the 1981-2015 (period). Also, ST
illustrates profitability in the stock markets in Malaysia [75].
Developing countries such as Malaysia need a strong and
deepening financial sector to increase productivity and
sustain economic growth [76]. Reference [77] highlighted
that the advancement of the financial sector is essential in
Malaysia to attract investment. Thus, analysing the financial
innovation contribution over the long run is crucial to sustain
long-term economic growth.
D. Electricity Sector
The electricity sector has developed considerably in the
last few decades [78], [79]. This rapid growth is due to the
nation’s economic activities, especially the industrial and
commercial sectors [80].
Fig. 12. Time trend of electricity consumption and electricity generation
(ktoe, ‘000) & GDP (2005=100) for the (1980-2015) period [80].
Upward trends in economic growth, population and
lifestyle in Malaysia have a significant impact on electricity
consumption as well [81], [82]. Past research has frequently
discussed the importance of electricity as compared to other
forms of energy because electricity involves cleaner and safer
energy sources [83]-[86].
Fig. 13. Time trend of final electricity consumption (ktoe) by sectors for the
(2006-2015) period [54].
In Malaysia, to date, 97.6% of all sectors and communities
have access to electricity [17]. Electricity consumption (EC),
electricity generation (EG) and GDP follow the same
direction in path movement (Fig. 12), which is likely to
continue in the future. The EC grew steadily at 8.4%, whilst
EG and GDP grew gradually at 8.1% and 5.8%, respectively,
for the 1980-2015 period.
Fig. 13. Time trend of final electricity consumption (ktoe) by sectors for the
(2006-2015) period [54].
To date, the industrial sector has been the biggest
electricity user, consuming about 4,809 ktoe (refer to Fig. 13).
The second biggest electricity user has been the commercial
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232
sector, at around 3,466 ktoe, followed by the residential
sector at 2,262 ktoe, the agriculture sector at 32 ktoe and the
transportation sector at 21 ktoe [54]. The growth rate in
electricity demand and supply must be manageable in terms
of sustainability, affordability and alternative electricity
resources like renewable energy (RE) technologies to ensure
the competitiveness of the Malaysian economy in the future
[87], [88]. In this regard, sound energy policies must be
supported by clear implementation and proper strategies to
achieve continuous sustainable development in Malaysia.
III. MALAYSIAN INNOVATION POLICIES AND ELECTRICITY
CONSUMPTION
A. Technological Innovation Policies
In Malaysia, the issues of the innovation rate lagging
behind, innovations being slow to materialise and sustainable
growth have led to rising concerns about technological
innovation [20], [41], [42]. In Malaysia, the policy makers
have formulated and introduced various technological
innovation strategies and policies to ensure the effectiveness
of technological innovation. In the mid-1980s, the
government’s efforts to enhance the country’s science and
technology were started. In general, technological innovation
policies are grouped into two major policies: National
Science, Technology and Innovation Policy 1 (NSTIP1) and
National Science, Technology and Innovation Policy 2
(NSTIP2).
In 1986, Malaysia formulated the first NSTIP1 with the
purpose of outlining a framework for science and technology
development. The aim was to ensure the continuous
achievement of science and technology development. The
policy was incorporated into the 5th Malaysia Plan
(1986-1990) [89]. In 1987, implementation of the
Intensification of Research in Priority Areas (IRPA) strategy
and mechanisms were initiated with the aim to ensure the
quality of R&D activities in the public sector. Furthermore,
the National Council for Scientific Research and
Development (NCSRD) was re-formed and a Cabinet
Committee on Science and Technology (S&T) was
established. In 1990, the National Action Plan for Industrial
Technology Development (APITD) was intended to
overcome the weaknesses Malaysia faced related to national
industrial development capability to move forward [90]. The
main objectives were to strengthen the role of science and
technology, technology capabilities of local industries and
Malaysian society as a whole. The APITD provides various
strategies and programmes to enhance the adopting process
of technologies and market-driven R&D. In the plan period,
the government launched the Industrial Technical Assistant
Fund (ITAF) to provide funds specifically to the technical
industry with the aim of enhancing product development and
encouraging private sector involvement in research and
technology development. Nevertheless, during the NSTIP1
and APTID periods, the Malaysian government faced a
significant challenge in terms of incapability to
commercialise R&D and lack of techno-entrepreneurs.
Furthermore, the important issues of scientific and
technological capabilities were further addressed under the
5th Malaysia Plan to ensure continuous improvement and
close monitoring by the government. Under the 6th MP
(1991-1995), further development of S&T were made by
providing basic infrastructure, including incentives and
supporting services, among others. During this phase,
automated manufacturing technology (AMT) was identified
as one of the key technology areas. AMT is the application of
advanced techniques of management, technical methods and
methodologies to enhance the quality, speed and flexibility of
the manufacturing environment. Among others are
computer-aided design (CAD), computer-aided
manufacturing (CAM) and computerised numerical control
(CNC). In 1992, the Malaysian Technology Development
Corporation (MTDC) was established as a joint
public-private technology venture capital company to
facilitate the commercialisation of public research findings
[91]. Meanwhile, the Malaysian Industry-Government Group
for High Technology (MIGHT) organises sector- and
technology-specific interest groups to study technology
developments and identify business opportunities.
Under the 7th MP (1996-2000), the NCSRD, under the
chairmanship of the chief secretary to the government, was
re-formed and restructured. In 1996, the Malaysian
government announced the industrial technology policy
incentive for the establishment of a multimedia super
corridor (MSC), which was a special development zone,
intended to attract investments in multimedia software
development. The area included the new federal
administrative centre at Putrajaya, the new Kuala Lumpur
International Airport at Sepang and a new high-tech city,
Cyberjaya. In the period plan, three new schemes were
funded to enhance private sector R&D. These schemes
included the Industrial Research and Development Grant
Scheme (IGS), MSC Research and Development Grant
Scheme (MGS) and Demonstrator Applications Grant
Scheme (DAGS). Furthermore, all the budgetary allocation
was centralised at the Ministry of Science, Technology and
Environment (MOSTE) to ensure coordination in R&D
activities and optimum utilisation of research resources. In
1999, the Malaysia-Massachusetts Institute of Technology
(MIT) Biotechnology Partnership Programme (MMBPP)
was launched to build a foundation for development of a
sustainable biotechnology industry. The aim is to develop
high-value-added palm oil products and herbal-based natural
products. During this phase, the National Technology
Mapping Programme 1 was initiated to identify long-term
technology development targets. In 1997, the
Commercialisation of Research and Development Fund
(CRDF) was launched with an allocation of RM100 million.
Under the 8th MP (2001-2005), the S&T development
focused on productivity-driven growth and competitiveness
of the economy. The National Technology Mapping
Programme Phase II was commenced to increase the
domestic capabilities, international and domestic
benchmarking by reviewing Malaysia’s technology level and
future directions. In 2003, the MyIPO was established,
raising the need to strengthen the patent registration and
management system. During this period, technology
incubation was highlighted to create and nurture the new
technology-based enterprises. In this regard, technology
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233
incubator programmes were implemented by the Scientific
and Industrial Research Institute of Malaysia (SIRIM)
Berhad, Technology Park Malaysia (TPM), MTDC,
Multimedia Development Corporation (MDC), Kulim
Hi-Tech Park and several institutions of higher education,
such as Universiti Sains Malaysia (USM) and Universiti
Technology Malaysia (UTM), to commercialise their R&D
output.
Under the 9th MP (2006-2010), the Biotechnology R&D
Grant Scheme was introduced. The Scientific Advancement
Grant Allocation (SAGA) was introduced as well to enable
promising researchers at institutions of higher education to
work on basic research for capacity building and knowledge
advancement in fundamental sciences. Furthermore, the
Technology Acquisition Fund (TAF) was introduced to
provide assistance to companies to acquire strategic foreign
technologies for further value creation. The Malaysia
Intellectual Property Association’s (MIPA’s) role, which is
under the Ministry of Domestic Trade and Consumer Affairs
(MDTCA), was administered by the Patents Act 1983, Trade
Marks Act 1976 and Copyright Act 1987 [20]. In 2006,
Malaysia joined the Patent Cooperation Treaty (PCT) and
become a party to the Nice Agreement and Vienna
Agreement to improve the legal commitments for intellectual
property (IP). Malaysia also amended the Trade Marks Act
1976 to meet the international standard. In 2007, the National
Intellectual Property Policy (NIPP) was launched to harness
IP as a new source of economic growth. In 2007, the
government announced the National Innovation Model to
promote an innovation culture and environment for the
people.
Under the 10th MP (2011-2015), the Malaysian
government announced the NSTIP2 agenda for 2013-2020 to
overcome NSTIP1 problems and to redesign the structure.
NSTIP2 provides strategic guidelines for science, technology
and innovation (STI) policy and investment for Malaysia’s
transition to become an innovation economy by 2020. The
objectives are (1) to increase R&D spending to at least 1.5%
of GDP by year 2020 and (2) to achieve a competent work
force of at least 60 researchers, scientists and engineers
(RSEs) per 10,000 in the labour force. The government
afterwards announced the Science for Action to implement
the NSTIP2 under the 11th Plan (2016-2020) as one of the
key strategic thrusts of Malaysia. The NSTIP2 accentuates
the links between the public and private sectors, developing
indigenous technology and product development capabilities
among local firms.
Under the 11th Malaysia Plan (2016-2020), the
government introduced the National Transformation Policy
(NTP), which aims to translate innovation into wealth, where
integrated research, development, commercialisation and
innovation (R&D&C&I) initiatives generate high returns on
investment throughout the years and stimulate productivity
growth as well. Thus, the government intensified R&D&C&I
initiatives to gain long-term advantage. A number of
specialised agencies were established to drive innovation
programmes, such as Agensi Inovasi Malaysia (AIM),
National Science and Research Council (NSRC), Yayasan
Inovasi Malaysia (YIM) and higher order thinking skills
(HOTS) for schools and tertiary institutions to inculcate a
thinking culture. A centralised repository of IP called
Khazanah Harta Intelek Malaysia was created to catalyse
commercialisation in Malaysia. Intermediaries such as
PlaTCOM Ventures Sdn. Bhd. (PlaTCOM) and Steinbeis
Malaysia Foundation (Steinbes) were set up to enhance
collaboration and provide advisory services between
researchers and companies [92].
In the plan period, the government has highlighted the
importance of skilled workers by enabling industry-led
technical and vocational education training (TVET), with a
target that since 60% of the 1.5 million jobs will require
TVET-related skills, the annual intake of TVET must
increase from 164,000 in 2013 to 225,000 in 2020. An
effective and efficient TVET sector is where supply meets
demand in terms of quality, where industry and TVET
providers must collaborate across the entire value chain,
streamlining the system and providing a variety of
programmes through it.
Malaysia has made continuous effort in technological
innovation since the 5th MP. Diverse policy and strategy
were undertaken during the transformation period in the
mid-1990s onwards to accelerate innovation progress and
sustainable growth. Many ministries have been involved
throughout this innovation build-up, and many institutions,
parties and programmes have been appointed and arranged
during this period through the present.
B. Financial Innovation Policies
The financial sector plays an important role in the
mobilisation and allocation of funds to support the growth
and development of the economy. In this current era, fast and
easy transaction services are indeed important to ensure
customer satisfaction and attract potential customers. The
Bank Negara Malaysia governor [93] suggested that the
current era is all about the ‘new real economy’, which is
likely to be characterised by digital technology innovation
with an unprecedented scale, scope and speed. However,
financial innovation policy discussions are rather limited in
the case of Malaysia.
Under the 5th MP (1986-1990), most of the banking and
financial institutions were computerised to better serve their
customers. An online book-entry system for government
papers and Cagamas bonds and an online interbank funds
transfer system were also introduced. Financial sector
procedures to harness electronic technology to speed up and
increase the efficiency of payments and information transfer
were implemented as well. Furthermore, the Society of
Worldwide Interbank Financial Telecommunication
(SWIFT), an international financial telecommunication
system, was also introduced and cheque clearing throughout
the country was expedited with the launching of systems
called SPAN 1 and SPAN II. The automated teller machine
(ATM) network has been expanded rapidly, which permits
cash withdrawals, fund transfers, payment of utility bills and
electronic fund transfers at the point of sale (EFTPOS). In the
plan period, to modernise and streamline the laws relating to
the conduct of banking and financial activities, the Banking
and Financial Institution Act (BAFIA) 1989 was enacted.
The government made serious efforts to develop the Kuala
Lumpur Stock Exchange (KLSE) into a sophisticated
International Journal of Innovation, Management and Technology, Vol. 8, No. 3, June 2017
234
international stock exchange. In 1986, the Corporatisation
Policy was introduced to strengthen the capital base of the
stockbroking companies and enhance the level of
professionalism in the securities industries. In 1987, the
Advanced Warning and Surveillance Unit (AWAS) were
formed with the objective to alert KLSE of stockbroking
houses and public listed companies which face problems. To
keep up with its modernisation efforts, the Semi-automated
Trading System (SCORE) was introduced to fully replace the
traditional system. Furthermore, a fixed delivery and
settlement system was also introduced to enhance the
efficiency of clearing and settlement functions. In addition,
another factor that can be described as an innovation product
that links to the financial sector is venture capital (VC). VC is
type of external financing other than loans, equity and bond
financing. VC plays an important role by providing financing
in the early stage of start-up companies, when they may have
difficulty getting loans from banks. In the 1980s, the
Malaysian VC industry started with a fund size of RM13.8
million. Several factors have influenced the development of
the VC industry in Malaysia, including limited funding, risk
aversion of the VCs, cyclical industry and difficulty of the
VC to exit the industry. These factors, to some extent, have
contributed to the slow growth of the industry.
Under the 6th MP (1991-1995), the BAFIA was refined to
support the government’s efforts to foster a modern, efficient
and safe and sound banking system. In 1994, the National
Payments System Council (NPSC) was established to
coordinate the overall development of a comprehensive and
efficient national payments system and to provide direction
in developing an efficient payments system in Malaysia.
During the plan period, a major task was the integration of
the various ATM networks into a single shared national ATM
network to facilitate implementation of the general interbank
recurring order (GIRO) payments system. To further develop
the KLSE, the Central Depository System (CDS) was
introduced for scrip-less trading to create a more efficient and
transparent clearing and settlement system. All the main
board and second board counters were placed under CDS,
which enabled the KLSE to handle a significantly larger
volume of trading. During this period, the rating of all
corporate bonds by Rating Agency Malaysia (RAM) was
made compulsory for the private debt securities (PDS)
market where corporations with good credit standing can
obtain greater access to funds at more competitive rates than
in the debt market, thus contributing to the overall efficiency
of the financial sector.
In 1997, under the 7th MP (1996-2000), the Bond
Information and Dissemination System (BIDS) was launched
as part of the effort to develop the secondary market for
bonds. This system facilitated the efficient pricing of new
issues, improved liquidity and widened the market.
Furthermore, the Malaysian Exchange of Securities Dealing
and Automated Quotation (MESDAQ) was launched.
MESDAQ provides an avenue for high-growth and
technology companies’ access to public funds and venture
capitalisation [94]. In 1999, MSC Venture One was
established to provide venture capital financing to innovative
and emerging information and communication technology
(ICT) and multimedia companies. Also, the Real Time
Electronics Transfer of Funds and Securities (RENTAS) was
launched to improve the overall efficiency of the large
payment system with respect to reducing interbank
settlement risk. During this period, effort has been made to
increase the efficiency of the banking sector through the use
of IT and the development of a reliable payment system. The
implementation of network-based or Internet-based payment
systems was begun in the late 1990s whilst the introduction
of mobile-based payment systems began in the mid-2000s.
Under the 8th MP (2001-2005), in November 2003, the
Payment System Act 2003 (PSA) was authorised to set out a
comprehensive legal and regulatory oversight framework to
govern the payment system. The aim of the PSA is to ensure
the safety, soundness and efficiency of the payment systems
infrastructure and to safeguard the public interest. During this
period, several MESDAQ listing requirements for
high-growth and technology companies were liberalised,
including the requirement that 70% of the listing proceeds be
used in Malaysia. In 2005, the first exchange-traded fund, the
ASEAN Bond Fund Index, was listed on Bursa Malaysia as
an initiative to improve issuance efficiency and product
innovation. Furthermore, the Capital Market Development
Fund was established to uphold growth and encourage
innovation in the capital market.
Under the 9th MP (2006-2010), Bank Negara Malaysia
(BNM) implemented the National Electronic Cheque
Information Clearing System (eSPICK) to replace the
previous cheque-clearing system to enhance the efficiency of
the payment system by reducing the daily wait to receive
funds from the cheque deposit process. Types of payment
systems introduced include the large value payments system
(SIPS) and retail payment system [95].
Under the 10th MP (2011-2015), the Mudharabah
Innovation Fund (MIF) was set up to provide risk capital to
government venture companies. The government was
allocated RM500 million to increase access to funding for
innovative start-ups. The fund offers an enhanced
risk-of-return profile to investors and attracts greater private
risk capital [17]. Meanwhile, the Business Growth Fund
(BGF) of RM150 million was established to bridge the
financing gap between the early stage of commercialisation
and venture capital financing for high-tech products. The aim
is to help these companies until they generate sufficient
commercial value to attract other forms of financing. BNM,
together with the private sector, has launched a series of
initiatives to move towards e-payment as it is cheaper than
paper-based transactions.
C. Electricity Policies
The Malaysian government has introduced various energy
policies and programmes to ensure sustainable energy
development. In 1949, the Central Electricity Board was
formed by the government for electricity generation,
transmission and distribution and then renamed as the
National Electricity Board in 1965. In 1975, the National
Petroleum Policy was formulated to initiate the efficient use
of the resource for industrial development and at the same
time ensure that the nation exercises majority control in the
management and operation of the industry. The major energy
policy, formulated in 1979, was called the National Energy
International Journal of Innovation, Management and Technology, Vol. 8, No. 3, June 2017
235
Policy 1979. This policy highlights the three long-term
energy objectives and strategies of supply, utilisation and
environment [96].
In 1980 and 1981, the National Depletion Policy and the
Four Fuel Diversification Policy (4FDP) were introduced to
ensure the reliability and security of the energy supply. The
aim was to reduce the country’s over-dependence on oil as
the main energy resource and to use an optimal mix of oil, gas
hydropower and coal in the supply of electricity [79], [97].
The implementation of these policies resulted in a reduction
in dependence on oil for the electricity sector whilst the
shares of natural gas and coal increased in the electricity
generation fuel mix. In 1990, the Electricity Supply Act was
formulated to establish the state-owned utility Tenaga
Nasional Berhad (TNB) to be peninsular Malaysia’s national
electricity provider [98].
In 2001, the Five-Fuels Strategy Policy (5FSP) was
introduced under the 8th MP (2001-2005) to highlight
potential renewable energy (RE) resources for electricity
generation (i.e. biomass, biogas, municipal waste, solar and
mini hydro). The Small Renewable Energy Power
Programme (SREP) was introduced in 2001 to support
implementation of the Five-Fuel Policy (5FP). Meanwhile,
the Renewable Energy Act was introduced in 2010 to uphold
RE projects. The act provides for the establishment and
implementation of Feed-in-Tariff (FiT) systems [99].
Furthermore, a few additional policies were introduced to
strengthen the initiatives of energy efficiency (EE) and
renewable energy (RE), including the National Green
Technology Policy (2009) and the National Policy on
Climate Change (2010) [100]. The National Green
Technology Policy has five objectives and only one is related
to the energy sector, which is to reduce energy consumption
while increasing economic growth. Meanwhile, the National
Policy on Climate Change put forward the role of energy
efficiency in both the demand and supply sectors. The EE
initiatives have been undertaken in three sectors (i.e. industry,
commercial and residential). In the industry sector, the
Efficient Management of Electrical Energy Regulations 2008
were introduced under the Electricity Supply Act. Any
installation which consumes more than 3 million units (kWh)
of electricity over a period of six months will get the benefit
of efficient utilisation of energy in the installation.
In the commercial sector, the government has taken a
pre-emptive approach to promote EE through green building,
such as the Low Energy Office (LEO), Ministry of Energy,
Green Technology and Water in 2004 and the Green Energy
Office (GEO) of Malaysia Green Technology Corporation
(MGTC) in 2008. To encourage the construction of green
buildings in Malaysia, the Green Building Index (GBI) has
been introduced for all types of building. Meanwhile, star
labelling was introduced for the residential sector in 2002 as
a part of the EE initiatives [50], where household appliances
are labelled from the most efficient (5 stars) to the least
efficient (1 star).
IV. POLICY IMPLICATIONS AND CONCLUSIONS
Malaysia is in a transformation period of becoming a
high-value, knowledge-based economy and
innovation-driven country to achieve sustainable growth.
Malaysia has continuously undertaken appropriate actions,
formulating policies and programmes to highlight the
importance of science and technology innovation in Malaysia.
The initiative can be observed since the launching of NSTIP1
in 1986, more obviously in the mid-1990s and further during
the transformation period towards vision 2020. The
government has raised the issue of the innovation rate
lagging behind and innovations being slow to materialise in
regards to achieving sustainable growth [17], [20], [41], [42].
Malaysia faces several challenges that need to be highlighted
and considered to increase innovation progress and
capability.
Reference [17] recorded that Malaysia’s productivity
lagged behind due to the low contribution of MFP and
showed that MFP real growth was 1.6% for both the 10th MP
and 11th MP, whilst it was just 1.3% in the 9th MP.
Reference [17] documented that Malaysia’s GERD is
considered quite small at about 1.26% in 2014 and targeted to
increase up to 2.3% in the 11th MP. Furthermore, Malaysia
had a labour force of about 14 million in 2015; however,
skilled workers accounted for only 28% of total employment.
This is targeted to reach up to 35% for the next five years so
as to become high-value-added industries. Reference [46]
revealed that due to the lack of indigenous firms exporting
their own products, Malaysia’s industrialisation is limited to
final producer goods, with the majority of manufacturing
industries being foreign owned.
Many initiatives have been undertaken by the Malaysian
government, but little has been achieved. Hence, an urgent
need exists for the Malaysian government to take further
actions by collaborating with global players [20]. Malaysia
should take advantage of external opportunities such as those
offered by the Association of Southeast Asian Nations
(ASEAN) Economic Community (AEC) and China’s “one
belt one road” (OBOR) plans that may benefit Malaysia as
new impetus to achieve sustainable growth and development
[101]. Accordingly, government efforts to create a strategic
development framework (SDF) for the high-speed rail (HSR)
project, linking Kuala Lumpur and Singapore is a first step
towards this collaboration.
Furthermore, the implementation of these initiatives must
be checked thoroughly, so that it reaches all the parties in the
economy. The tremendous improvement in South Korean
innovation is due to the appropriate role played by the South
Korean government as an architect of the economy, which
made a strategic decision to guide. Thus far, the
implementations of any decisions are based on the needs of
the industry [102]. It is clear that innovation processes must
be supported by a complex set of social institutions with a
mix of policies and strategies initiated [10], [92]. Thus, the
government plays an important role to monitor the
synchronisation and smoothness of all ministries, institutions,
parties and the policy mix and strategies throughout this
process. Thus, the innovation process may reflect significant
progress, slowly yet surely.
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International Journal of Innovation, Management and Technology, Vol. 8, No. 3, June 2017
238
applied economics. He is currently a professor at the
Graduate Business
University Tenaga Nasional (UNITEN), Malaysia. He
earned his PhD in input-output methods from the
University of Keele, England, UK, in 1991. He taught
at Baghdad University from April 1991 to May 2003,
Al-Zyatoonh University, Jordan from September 2003
to December 2007 and joined UNITEN in July 2008
up to date.
He has already published more than 90 papers in peer-reviewed articles
and five text books in mathematical economics, econometrics, quantitative
and research interests include the mathematical economics models,
econometrics, and input-output analysis. Other research interests include the
cost benefit analysis, development models, time series analysis, and energy
economics.
N. W. A. Latif is a lecturer at College of Business
Management & Accounting (COBA), in University
Tenaga Nasional
(UNITEN), Malaysia. She is
currently pursuing a PhD in business management
specializing in economics of innovation and energy
economics.
International Journal of Innovation, Management and Technology, Vol. 8, No. 3, June 2017
239
... Technological innovation is defined as the development of new products or services, new fresh materials, new or enhanced processes, or new business models that create differentiated products or services and, at the same time, new and more numerous markets Bekhet and Latif, 2017). Therefore, technological innovation varies by production processes, from old, obsolete, and stagnant to modern and dynamic process options, that make products more competitive and allow firms to introduce products into more markets, including through internet of things (IoT) channels. ...
... The long-run gross domestic product-employment elasticity indicates inelastic responsiveness, where a 1% rise in employment promotes economic growth to a fair degree of 0.26%, ceteris paribus. This is consistent with Dogan (2015) in the case of Turkey and shows that employment via human capital plays an important role in terms of knowledge transmission and technology know-how to fuel economic growth (Bekhet and Latif, 2017). Human capital and learning capability are vital factors of economic development that are responsible for a country's absorptive capacities (Bekhet and Latif, 2018), domestic technological innovation (Kondratiuk-Nierodzińska, 2016), and regional development (Bengoa et al., 2017). ...
... Such progress is also the solution for the country to avoid the development trap. Malaysia has been initiating its technological innovation plans since the mid-1980s, progressing well in the mid-1990s and during the transformation period of becoming an innovation-driven country (Bekhet and Latif, 2017). Since that time, various plans, policies, and budgets have been tabled. ...
Article
Technological innovation is a dynamic growth factor to achieve sustainable development. This study aims to explore the long- and short-run relationship between technological innovation and Malaysia’s sustainable growth from 1980 to 2015. Augmented Cobb-Douglas production function is used to scale the technological innovation and economic growth link. The F-bounds test and VECM Granger causality are employed. The dynamic relationships among the gross domestic product, capital, employment, electricity consumption, technological innovation, technological innovation squared and governance institution quality variables; and the nonlinear relationship between technological innovation and economic growth are studied. The study confirms the existence of long-run relationship among the variables and the link between technological innovation and economic growth has an inverted U-shape. Also, technological innovation, technological innovation squared, and governance institution quality Granger-cause economic growth in the long and short run, together with capital, employment and electricity consumption. Therefore, continuous plans and policies are very much needed to drive technological innovation evolution in Malaysia, so the tide is slowly turning.
... Technological innovation is defined as the development of new products or services, new fresh materials, new or enhanced processes, or new business models that create differentiated products or services and, at the same time, new and more numerous markets Bekhet and Latif, 2017). Therefore, technological innovation varies by production processes, from old, obsolete, and stagnant to modern and dynamic process options, that make products more competitive and allow firms to introduce products into more markets, including through internet of things (IoT) channels. ...
... The long-run gross domestic product-employment elasticity indicates inelastic responsiveness, where a 1% rise in employment promotes economic growth to a fair degree of 0.26%, ceteris paribus. This is consistent with Dogan (2015) in the case of Turkey and shows that employment via human capital plays an important role in terms of knowledge transmission and technology know-how to fuel economic growth (Bekhet and Latif, 2017). Human capital and learning capability are vital factors of economic development that are responsible for a country's absorptive capacities (Bekhet and Latif, 2018), domestic technological innovation (Kondratiuk-Nierodzińska, 2016), and regional development (Bengoa et al., 2017). ...
... Such progress is also the solution for the country to avoid the development trap. Malaysia has been initiating its technological innovation plans since the mid-1980s, progressing well in the mid-1990s and during the transformation period of becoming an innovation-driven country (Bekhet and Latif, 2017). Since that time, various plans, policies, and budgets have been tabled. ...
Article
Technological innovation is a dynamic growth factor to achieve sustainable development. This study aims to explore the long- and short-run relationship between technological innovation and Malaysia's sustainable growth from 1980 to 2015. Augmented Cobb-Douglas production function is used to scale the technological innovation and economic growth link. The F-bounds test and VECM Granger causality are employed. The dynamic relationships among the gross domestic product, capital, employment, electricity consumption, technological innovation, technological innovation squared and governance institution quality variables; and the nonlinear relationship between technological innovation and economic growth are studied. The study confirms the existence of long-run relationship among the variables and the link between technological innovation and economic growth has an inverted U-shape. Also, technological innovation, technological innovation squared, and governance institution quality Granger-cause economic growth in the long and short run, together with capital, employment and electricity consumption. Therefore, continuous plans and policies are very much needed to drive technological innovation evolution in Malaysia, so the tide is slowly turning.
... Sustainability issues have been discussed since the Brundtland Report [1], with the aim to attempt sustainable long-term growth and development (social, economic, and environmental) while safeguarding future generations. In general, increases in the factors of production, improvements in efficiency in allocating the factors of production, and the rate of innovation are the major forces of growth [2,3]. Heavily depending on traditional production functions such as capital and labor to sustain economic growth and continued dependence on it in the long term is not an option. ...
... The current 11th MP [20] highlights technological innovation as an important agenda for the Malaysian government [20]. Bekhet and Latif [2] point out that the Malaysian economy still relies on capital and labor instead of multifactor productivity (MFP), which is contributing about 70% of GDP growth. Furthermore, MFP has been stagnant in terms of real growth; while, the share of MFP in growth decelerated in the 9th MP [29] and 10th MP [28]. ...
... Well-structured and efficient infrastructure drives economic performance [2] because of its large multiplier effect, particularly in developing countries [36,37]. According to the Global Infrastructure Investment Index (GIII), Malaysia ranks fifth in terms of its attractiveness for infrastructure investment in Asia [38]. ...
Article
Technological innovation integrated with strategic policies is vital for sustainable growth. This study aims to highlight the importance of technological innovation and governance institution quality on Malaysia's sustainable growth from 1985 through 2015. The dynamic relationships among gross domestic product, capital, employment, electricity consumption, technological innovation, governance institution quality, and the interaction of technological innovation and governance institution quality are examined. The augmented production function, F-bound, dynamic ordinary least squares, and Granger causality tests are utilized. The results confirm the dynamic relationship among the above variables. In the long run, unidirectional causality runs from governance institution quality and technological innovation-governance institution quality toward Malaysia's financial development. However, in the short run, there is bidirectional causality between financial development and economic growth. The interaction between technological innovation and governance institution quality has a significant positive impact on Malaysia's economy in the long run. Also, capital, employment, and electricity consumption have a positive significant impact on economic growth in the long run. These three variables are vital growth inputs and should be accompanied by technological innovation and governance institution quality. Well-planned and relevant policies can boost technological progress in Malaysia, slowly yet surely.
... It started in 1986 with the announcement by the government on the first National Science and Technology Policy 1 (NSTIP 1) to outline a framework for achieving the growth of Science, Technology, and innovation development. In 1990, an Industrial Technology Development Action Plan has been developed to address NSTIP 1 vulnerabilities (Bekhet & Latif, 2017). ...
... Nevertheless, some of the issues in the past initiatives, including the diffusions of technology, investment from the private sector to R&D and technological innovation, commercializing of products and services, and monitoring and evaluation issues have not been enforced (Rasiah & Chandran, 2015). Throughout its agenda for 2013 until 2020, many ministries showed participation and many organizations, groups, and initiatives have been created and organized (Bekhet & Latif, 2017). ...
Article
Full-text available
Scholars have given increased attention to seek for a solution to improve firms’ performance. The literature demonstrated that technology innovation is considered the most powerful means of firms’ performance for modern companies. Empirical findings showed, however, that the relationship between technological innovation and firms’ performance continues to be inconclusive as it has a negative, positive or no impact on firms’ performance. In order to address such gap, this paper proposes a theoretical framework to describe the moderating effect of directors’ network on technological innovation and firms’ performance. It shows that the effectiveness of business innovation can be enhanced through direct or indirect use of each network of directors. The firm still neglects the significant capacity of the board of directors' network in a firm. In short, the crucial discussion found in this paper will lead to improving the information on innovation, networking and organizational studies as well as act as a reference to study in other countries. This study is a promising field. The business will benefit from a large social network of directors. Thus, the company is proposing to fully utilize the function of directors’ network to leverage the innovation activities and firm’s performance.
... This finding is consistent with the findings from Ahmed et al. (2016) and Sezgin et al. (2017). In Malaysia, the citizens are aware of and acquired some basic information about innovation (Bekhet, 2017). Jung et al. (2012) highlighted that younger and more educated consumers tend to express higher levels of awareness, interest and intention to adopt the technology. ...
Purpose This study aims to examine the possible factors affecting Malaysians’ intention to adopt new technology such as home health-care robots (HHRs) based on the extended unified theory of acceptance and use of technology (UTAUT) model. The variable price, awareness and alternative attractiveness were added since HHRs is a new technology in Malaysia. Design/methodology/approach This study collected the self-administered questionnaire from 316 respondents who are currently taking care of elderly or disabled people at home. The UTAUT variables, price and awareness were the predictors, and the intention to adopt HHRs was the independent variable, with alternative attractiveness as the moderator. The partial least squares structural equation modeling was used for analysis of the measurement model and the structural model of this study. Findings The results show that performance expectancy, social influence, facilitating conditions, price and awareness significantly and positively affect Malaysians’ intention to adopt HHRs. Alternative attractiveness moderates the relationship between price and intention to adopt HHRs. Research limitations/implications The findings provide insights to marketers, managers and policymakers in identifying the right strategies to promote HHRs and thus, solving the problem of scarcity in caretakers for elderly and disabled people. Originality/value This study adds value to the current literature by integrating price and awareness constructs with the UTAUT model. This study also examines the moderating effect of alternative attractiveness on the intention to adopt HHRs, which is still limited but significant for developing nations.
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The pharmaceutical business of Malaysia has been encountering dynamic development throughout the years. Sales and advertising need obligations of pharmaceutical organizations to spread the product information and materials through a precise regulatory pathway of advancing the sales of products. The pharmaceutical manufacturing hub in Malaysia is under the supervision of the Ministry of Health (MoH) of Malaysia. An execution of various laws and the establishment of regulating authorities have been done to govern the pharmaceutical business and protecting the community. While the laws are executed, the legislature or related specialists should watch out for the present medicinal issues to pass judgment on the viability of the current laws in overseeing the pharmaceutical sales and advertisement. The public should be exposed to the advertisements which help the consumers to settle on level-headed choices on the utilization of medications without confounding, misdirecting and beguiling cases. However, such activities are commendable if they are following the enactment and rules provided by the respective authority.
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The current paper examines the long-run and short-run equilibrium relationships between FDI inflows and employment in Malaysian manufacturing and services sectors using ARDL approach for the 1972-2011 period. It employs ADF and PP tests to detect the stationary levels of above variables. Also, it utilizes the bounds F-statistics test to identify the co-integration among variables. Results of ARDL approach indicate the presence of significant long-run and short-run equilibrium relationships between FDI inflows and employment in manufacturing and services sectors. The paper’s findings are of particular interest and importance to Malaysian policy makers towards increasing FDI inflows and employment in manufacturing and services sectors.
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This paper reviews the recent economic situation in Malaysia and examines the prospects for future economic growth. The Malaysian economy continues to perform well, although there are risks and uncertainties. There is evidence that economic growth has started to slow recently in response to the falling oil price and low investor confidence. The ringgit appreciated against the U.S. dollar through to mid-2014, but has subsequently depreciated. The budget deficit has declined in recent years, reflecting fiscal reform and the introduction of the Good and Service Tax (GST). While we express concern about the risks associated with declining commodity prices and uncertainties over capital flows, we conclude that the prospects for continued economic growth in Malaysia are relatively good. In the short-term cheaper crude oil price imports and major public infrastructure investment projects will spur growth. In the longer-term, we emphasize the role of investment in education in moving up the value-added chain into higher value added manufacturing. We also stress that the government must play a key role in restoring investor confidence and reducing ethnic and religion tension, if Malaysia is continue to exhibit strong growth in the longer term.
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The main objective of this paper is to give a comprehensive review of non-renewable energy and renewable energy utilization in Malaysia, including hydropower, solar photovoltaic, biomass and biogas technologies. Malaysia mainly depends on non-renewable energy (natural gas, coal and crude oil) for electricity generation. Therefore, this paper provides a comprehensive review of the energy sector and discusses diversification of electricity generation as a strategy for providing sustainable energy in Malaysia. Energy policies and strategies to protect the non-renewable energy utilization also are highlighted, focusing in the different sources of energy available for high and sustained economic growth. Emphasis is also placed on a discussion of the role of renewable energy as an alternative source for the increase of electricity supply security. It is now evident that to achieve sustainable development through renewable energy, energy policies and strategies have to be well designed and supported by the government, industries (firms), and individual or community participation. The hope is to create a positive impact on sustainable development through renewable sources for current and future generations.
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Malaysia has achieved remarkable economic growth since 1957, moving toward modernization from a predominantly agriculture base to manufacturing and—now—modern services. The development policies (i.e., New Economic Policy [1970–1990], the National Development Policy [1990–2000], and Vision 2020) have been recognized as the most important drivers of this transformation. The transformation of the economic structure has moved along with rapid gross domestic product (GDP) growth, urbanization growth, and greater demand for energy from mainly fossil fuel resources, which in turn, increase CO2 emissions. Malaysia faced a great challenge to bring down the CO2 emissions without compromising economic development. Solid policies and a strategy to reduce dependencies on fossil fuel resources and reduce CO2 emissions are needed in order to achieve sustainable development. This study provides an overview of the Malaysian economic, energy, and environmental situation, and explores the existing policies and strategies related to energy and the environment. The significance is to grasp a clear picture on what types of policies and strategies Malaysia has in hand. In the future, this examination should be extended by drawing a comparison with other developed countries and highlighting several options for sustainable development.
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