INDUSTRY ACADEMIA LINKAGE PROGRAMS (MALAYSIA) Mr. Mohd Izham Abdullah Senior Manager, SMIDEC APEC SME Innovation Center Lexington Hotel Seoul, Korea
Table of Contents Overview - SMEs In Malaysia SME Innovation Policies and Strategies Advancement of Technology Emerging Technologies Capacity Building The Way Forward
OVERVIEW SMEs In Malaysia
DEFINITION OF SMEs MANUFACTURING, MANUFACTURING RELATED SERVICES AND AGRO-BASED INDUSTRY Companies in the manufacturing, manufacturing related services and agro-based industries with annual sales turnover not exceeding RM25 million (USD6.6 mil) OR full time employees not exceeding 150
DEFINITION OF SMEs ( cont d) SERVICES, PRIMARY AGRICULTURE AND INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) Companies in the services, primary agriculture and Information & Communication Technology (ICT) sectors with annual sales turnover not exceeding RM5 million(usd1.3mill) OR full time employees not exceeding 50
Detailed definition of SMEs by Size Category Micro-enterprise Small enterprise Medium Enterprise Manufacturing, Manufacturing- Related Services and Agro-based industries Sales turnover of less than RM250,000 (USD65,800) OR full time employees less than 5 Sales turnover between RM250,000 (USD 65,800) and less than RM10 million (USD2.6 mill) OR full time employees between 5 and 50 Sales turnover between RM10 million (USD2.6) and RM25 million (USD6.6 mill) OR full time employees between 51 and 150 Services, Primary Agriculture and Information & Communication Technology (ICT) Sales turnover of less than RM200,000 (USD52,600) OR full time employees less than 5 Sales turnover between RM200,000 (USD52,600) and less than RM1 million (USD263,000) OR full time employees between 5 and 19 Sales turnover between RM1million (USD263,000) and RM5 million (USD1.3 mill) OR full time employees between 20 and 50
DISTRIBUTION OF SMEs BY SIZE IN THE MANUFACTURING SECTOR
DISTRIBUTION OF SMEs BY SIZE IN THE SERVICES SECTOR Source : Department of Statistics, Census 2000
SME Innovation
DRIVING SMEs GROWTH THROUGH INNOVATION Innovation : - a new way of doing things - gives a new spin to old ideas - technology competitiveness Innovation in : - product - business - process To support innovation : - latest technology and equipment - dedicated team - patenting Mechanism of innovation - reverse engineering - creation of mentors
CURRENT USAGE OF TECHNOLOGIES Status of Malaysian companies: Upgrading of machineries & equipments in the last 2 years 60% Improvement of products & processes - 40% Dependence on obsolete/old technology 70% Low expenditure of R&D activities 0.7% of GDP Majority MNCs involved in high technology production & exports Source : Malaysian Productivity & Investment Survey (PICS)
SMEs INVOLVEMENT IN R&D Expenditure in R&D by the Private Sector Total Expenditure - RM 1,633.1 million Current Expenditure - RM 932.7 million - Labour Cost - RM 248.9 million - Operating Cost - RM 683.8 million - Capital Expenditure - RM 700.3 million Human Resources Total Number of Research Personnel (Headcount) - 5,177 (Source : Mastic Report, 2004/2005)
INNOVATION READINESS Key drivers of Innovation (Adaptation & Creation) Manufacturing(%) Services(%) R&D Activities 20 12 Firm-firm Linkages 37 41 Industry University 10 14 Firm Research Institutions 21 17 Firm Government Agencies 23 15 Source : Malaysian Productivity & Investment Survey (PICS)
Indonesia Sweden Finland Japan USA Switzerland South Korea Germany Denmark Singapore Netherlands United Kingdom Canada Norway Australia New Zealand China Ireland India Malaysia Thailand Phillipines 4,50 4,00 3,50 3,00 2,50 2,00 1,50 1,00 0,50 0,00 TOTAL R& D EXPENDITURE BY SELECTED COUNTRIES % in GDP 1995 2002 Country
SME PERFORMANCE REPORT 8 th Malaysia Plan (2001-2005 ) on Science, Technology & Innovation Expenditure RM 3.3 billion 9 th Malaysia Plan (2006-2010) on Science, Technology & Innovation Allocation RM 5.2 billion 2003 (%) 2004 (%) Undertook process improvements 59 60.6 New product development 44 38.1 Innovation in technology 22 19.4 Products patented 3 4.5
TOTAL R&D EXPENDITURE 3000 2500 Total R&D Expenditure, 1992-2002 0.69 % in GDP 0.7 0.6 RM million 2000 1500 1000 500 0.37 0.34 0.22 0.39 0.49 0.5 0.4 0.3 0.2 0 Yr 1992 Yr 1994 Yr 1996 Yr 1998 Yr 2000 Yr 2002 Year 0.1
POLICIES & STRATEGIES
ENCOURAGING INNOVATION The Second Science and Technology Policy (STEP 2) : To strengthen S&T; To spur greater technological development; To promote a more innovation-led economic growth.
ENCOURAGING INNOVATION S&T R&D HRD Creativity & Innovation Adequate Financing
INNOVATION & CREATIVITY SMEs direction: ODM OEM OBM Through innovation and R&D activities
STRENGTHEN LINKAGES Government/Funding Universities/ Researchers Technology Databank Industry Commercialisation
Academia Industry Consultative Council In 2005, MITI has set up an Academia Industry Consultative Council A special mechanism and forum to gather industry and academia To jointly provide input and formulate strategies for capacity building for the nation trade and industry sectors Under the Industrial Master Plan 3 (IMP3), SMIDEC will establish & focus four cornered platforms for academia, industry, Government and also financers.
EMERGING TECHNOLOGIES
EMERGING TECHNOLOGIES SMEs to acquire new and emerging technologies; Technology transfer from MNCs; Undertake feasibility studies for technology based industry; SMEs to integrate ICT into business processes; and MNCs and LSIs move towards global outsourcing.
EMERGING TECHNOLOGIES Economically viable for commercial adoption; Potential to enhance competitiveness; Compliance with international requirement; and Capacity to adopt and adapt technologies.
EMERGING TECHNOLOGIES Biotechnology Nanotechnology Radio Frequency Identification (RFID) Wireless Technology Micro-Electro-Mechanical System Photonics Laser Technology Fuel Cell Technology
CHALLENGES
CHALLENGES Minimising costs of acquiring enabling technology; Enhance knowledge and awareness of technologies; Improve knowledge management in the complex system processes; Convergence of technology; and Skilled manpower to support and manage ICT skills shortage & mismatch.
CAPACITY BUILDING
QUALITY HUMAN CAPITAL Stimulate creativity and innovativeness in business; Continued support in both technical and soft skills; and Inculcate entrepreneurship among top management of SMEs.
QUALITY HUMAN CAPITAL Emplacement of university trainees at business premises or factories; Programmes for SMEs in strategic business planning and new business models; and Provide greater assistance to SMEs to enhance their technological capabilities.
QUALITY HUMAN CAPITAL Improving access to knowledge on ICT and other enabling technologies; and Enhance awareness on Intellectual Property (IP) to promote R&D and technological collaboration.
SKILLS UPGRADING PROGRAMME To enhance the skills and capabilities in technical and managerial levels including information technology and industrial design. - PUSPATRI - NPC - MINT - GMI - MFI - NSSDC - KISMEC - TATI - MISDC - PESDC - PSDC (Penang) - SIRIM - SHRDC - PSDC (Pahang) - NIOSH - SSTC - PPKS - TPM - IKRAM - IGM - BIP - UTM 50% grant on training fees
SME EXPERT ADVISORY PANEL SEAP programme is implemented through the emplacement of industrial experts at the factory sites of SMEs to solve SME s specific problems. The Programme is to assist SMEs to upgrade their technological capability, to achieve efficiency and to increase productivity.
SME EXPERT ADVISORY PANEL ( contd) Expertise available in areas of: Productivity and Quality Improvement; Production Control; Business System Management and Analysis; International Standards e.g. HACCP,GMP; Production Process Improvement and Maintenance; Industrial Engineering; Product Development and Design; and ICT Adoption.
SME ADVISORY SERVICES Provides advisory services and consultation to SMEs through: Business Clinics Virtual SME Information Centre http : //www.smidec.gov.my Toll Free Line : 1-800-18-1801
THE WAY FORWARD
THE WAY FORWARD Role of industry associations in promoting of ICT and enabling technologies; To improve co-ordination and collaboration between: - Government Research Institutes (GRIs); - Science and Technology Parks (S&T Parks); and - Institutions of Higher Learning (IHLs). Enhanced HRM: - Conducive employment & environment - Productivity - linked wage system.
Paradigm Shift of SMEs CURRENT Goal Price Focus Production Oriented Production Driven Cost Oriented Efficient Machine Based Local, National Vs FUTURE Vision Value Chain Analysis Total Quality Oriented Customer Driven Speed Oriented Innovative Information Based Global
THANK YOU 701D, Level 7, Tower D, Uptown 5, No.5, Jalan SS21/39 Damansara Utama 47400 Petaling Jaya SELANGOR, MALAYSIA Tel. No. 603 7628 7400 Fax No.: 603-7660 1919 Tol Free: 1800-18-1801 Email : info@smidec.gov.my www.smidec.gov.my