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WHAT IS RESEARCH & DEVELOPMENT (R&D)?
The Promotion of Investment Act 1986 defines R&D as any systematic or intensive study undertaken in the field of science or technology with the object of using the study results for the production or improvement of materials, devices, products, produce or processes. R&D as well as technological innovations is essential in the Malaysian government’s strategy of sustainable development and knowledge-based economy. Recognizing these factors, the government has accorded a high priority to the scientific and the technological development of the country.
Under the current market trend of trade liberalization and globalization, companies face increased competition for products and services due to lower entry barriers. This borderless world has induced hyper competition which will make the less competitive SMEs fail. To become a significant player in this modern era, SMEs need to undergo a paradigm shift. SMEs need to be developed and nurtured into an efficient and globally competitive supporting sector, which is capable of producing high value-added critical parts and components for other leading industrial sectors, not just a purely export orientated producer.
SCIENCE, TECHNOLOGY AND INNOVATION (STI) DEVELOPMENT THRUSTS
The Government is fully committed towards enhancing the nation’s competency in R&D, science and technology and ability to innovate. Under the 9th Malaysia Plan (9MP, 2006-2010), the Government will place greater emphasis on capacity building and strengthening the National Innovation System (NIS) to build upon leading-edge technologies and know-how.
The thrust for STI development during the 9MP period will be to contribute towards innovation-led growth as well as enhance productivity and competitiveness for wealth creation and social well-being. Efforts will be intensified towards mastering and harnessing S&T for widespread applications in generating knowledge, innovation and growth. In this regard, concerted efforts will be undertaken to implement the following strategies:
• strengthening the NIS to contribute more effectively towards the development and diffusion of new technologies to enhance productivity, competitiveness and growth;
• enhancing S&T human capital as a principal source of innovation and competitive advantage;
• promoting technopreneurship to enhance national innovative capacity and increasing the number of S&T-based companies;
• enhancing technological capability and capacity of SMEs to meet the challenges of globalisation and increasing competition;
• prioritising and consolidating R&D and commercialisation initiatives to ensure more effective resource allocation and increase the rate of commercialisation of R&D and returns to investment;
• focusing on targeted R&D to generate new sources of growth;
• promoting standardisation and quality assurance for competitiveness and consumer well-being;
• increasing STI awareness to contribute towards nurturing a culture of creativity and innovation; and
• improving international linkages in STI development to tap global knowledge.
GOVERNMENT SUPPORT FOR R&D
Malaysian SMEs are very fortunate to have the full support of the government in all aspects of their operations, including R&D. The facilitation and support from the government and the continuous initiatives from SMEs themselves to improve their productivity through continuous R&D in products, services and processes will enhance their competitiveness.
The Ministry of Science, Technology and Innovation (MOSTI) is in charge of managing the fund and the implementation of S&T research and development programmes in Malaysia. Other private agencies such as Malaysian Technology Development Corporation (MTDC), Multimedia Development Corporation (MDeC) and SIRIM Berhad also provide assistance.
1) The Ministry of Science, Technology and Innovation (MOSTI)
In line with the National Science & Technology (S&T) Policy, a number of programmes are administered by MOSTI’s S&T Division to encourage SMEs to strengthen their technology base and improve their products.
a) eContent Fund
The objectives of eContent Fund are to spur the development of the local ICT content industry for domestic and export market and also to develop a more resilient and competitive local content industry. The focus areas for content development under the 9MP are animation, games, e-learning, culture and heritage, e-commerce, simulation and virtual reality. These contents should be able to run on multiple platforms such as 3G/mobile phone, Internet, and other media such as PDA and TV, etc.
The grant is awarded to local companies and Malaysian teams only. Two categories of companies are eligible to apply, namely micro-enterprises and medium scale enterprises. The scope of funding is limited to content development only. However, a maximum of 20% of total cost is allowed for procurement of infrastructure such as hardware, software, etc. Applicants are categorized into three groups, namely teams (comprising two individuals), micro-enterprises and medium scale enterprises. The maximum grant amount for teams is RM90,000, micro-enterprises get RM500,000 and medium scale enterprises qualify for RM6 million.
Contact details:
eContent Fund Secretariat
Ministry of Science, Technology and Innovation
Level 5, Block C5, Parcel C
Federal Government Administrative Centre
62662 Putrajaya, Malaysia
Tel: 603-8885 8025 Fax: 603-8888 4238
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Website: www.mosti.gov.my
b) TechnoFund
TechnoFund is a grant scheme to develop products and technologies for the pre-commercialization stage, in five technology clusters - Biotechnology, Information and Communication Technology (ICT), Industry, Sea to Space, and S&T Core. The scope of the TechnoFund includes the development of commercial-ready prototypes, pilot plant and incubation activities to address the funding gap of pre-commercialization activities. These technologies must have the commercial potential to create new businesses and generate economic wealth for Malaysia.
There are two types of funding; pre-commercialization (Type A) and intellectual property (IP) acquisition (Type B). The maximum amount of funding is the lower of total project cost or RM5 million, based on merit of the case and reasonable justification. For projects with IP acquisition (Type B), maximum funding is the lower of total acquisition cost or RM2 million. The total project cost should not exceed RM5 million based on merit of the case and reasonable justification.
Contact details:
TechnoFund Secretariat
Fund Management Unit
Strategic Planning Section
Ministry of Science, Technology and Innovation (MOSTI)
Level 3, Block C5, Complex C
Federal Government Administrative Centre
62662 Putrajaya, Malaysia
Tel (Hotline): 03-8885 8848 / 8851
Fax: 03-8889 2994
Website: www.mosti.gov.my
Other funds offered by MOSTI include the ScienceFund and InnoFund.
2) Malaysian Technology Development Corporation (MTDC)
MTDC was set up in 1992 under the directions of MOSTI to spearhead the development of technology businesses in Malaysia. Its initial role was to concentrate on the promotion and commercialization of local research and to invest in new ventures that can bring in new technologies from abroad.
From those investment activities, MTDC has evolved to become a venture capital outfit and has been the leading venture capitalist in the country. MTDC has since evolved to become an integrated venture capital solutions provider. Today, MTDC is the only one-stop agency where financing can be sourced from; all the way from laboratory ideas to full commercialization of such ideas.
Two of the funds administered by MTDC to speed up the marketing and production of commercially viable R&D results are as follows:
a) Commercialization of R&D Fund (CRDF)
The purpose of CRDF is to provide financial support to universities, RIs and eligible companies to undertake full commercialization of indigenous technology and R&D results, thus enhancing the national competitiveness and capability of the Malaysian industrial sector. Basically the fund is divided into four groups – CRDF 1 and CRDF 2 are meant for universities and RIs; CRDF 3 and CRDF 4(a),(b) and(c) are for SMEs, large corporations and public listed companies.
b) Technology Acquisition Fund (TAF)
Established to facilitate the acquisition of strategic and relevant technology by the Malaysian Industrial Sector, it provides partial grant to further promote efforts by the private sector to acquire new technology and to enhance their technology level and production processes. TAF is targeted towards Malaysian incorporated manufacturing companies (SMEs and large corporations). Public listed companies or their subsidiaries are not eligible to apply.
Contact details:
CRDF / TAF
Government-Industry Technology Services (GITS) Department
Malaysian Technology Development Corporation (MTDC)
Level 8 & 9, Menara Yayasan Tun Razak
Jalan Bukit Bintang
55100 Kuala Lumpur, Malaysia.
Tel: 603-2172 6000 Fax: 603-2163 7549
E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Website: www.mtdc.com.my
3) Multimedia Super Corridor (MSC) Malaysia R&D Grant Scheme (MGS)
Since its inception in 1996, the MSC Malaysia has been the catalyst to attract international renowned ICT companies to undertake research, develop new multimedia technologies and applications, and export from this base. This thriving dynamic ICT hub in our own backyard is the ideal platform for domestic ICT SMEs to transform themselves into world class companies. The Multimedia Development Corporation (MDeC) is entrusted to manage the MGS and oversee the progress and completion of funded projects.
The MGS was set up with a total allocation of RM110 million to support vibrant R&D initiatives by local companies leading to innovative ICT/multimedia products that possess significant commercial potential. This will increase the creation of Intellectual Property (IP), enabling companies to gain international recognition.
Eligibility includes companies with MSC status and are at least 51% Malaysian-owned. Priority is given to proposals that lead to the development of R&D products and services across the multimedia value chain and the MSC Flagship Applications. Past and current recipients of any government R&D grants need not apply.
The amount approved under the MGS is dependent on the merits in each application and will not exceed 50% of the approved total project cost or RM1.2 million, whichever is lower, with a funding period of up to one year only. A non refundable processing fee of RM5,000 is payable upon submission of the final application documents.
Contact details:
Multimedia Development Corporation Sdn Bhd
Technology Policy and Research
2360 Persiaran APEC
63000 Cyberjaya
Selangor D.E., Malaysia.
Tel: 603-8315 3000 Fax: 603-8318 8786
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Website: www.msc.com.my
4) Standards and Industrial Research Institute of Malaysia (SIRIM) Berhad
SIRIM Bhd, wholly-owned by the Malaysian government, is Malaysia’s largest provider of technical and quality services. Since its corporatization in 1996, SIRIM has become more market-orientated. It is focus on discovering and developing new technologies to enable industries to move up the value chain and aimed to expand from simply using technology to solve technical problems to discovering technology that will help industries to reinvent their products and business. With over 800 researches and experts at its disposal, SIRIM is given the mandate to assist SMEs in improving their operations.
Services provided by SIRIM in research and technology division include contract research, product development, technology transfer, process optimization incubation, materials research, skills development and consultancy.
Listed below are the facilities for R&D under SIRIM:
• Advanced Manufacturing Technology Centre
The centre provides a wide range of services to the industries through its three programmes: Electronics and Intelligent System Development Programme, Industrial Automation and Robotics Programme, and National CAD/CAM Programme.
• Environment & Bioprocess Technology Centre
The core focus of the centre is Bioprocess and Chemical Engineering, Environmental Engineering, Energy and Cosmeceuticals. It compliments AMREC by focusing on the process technology aspects of material technology.
• Techno-Economy and Commercialization Centre (TECC)
The Techno-Economy and Commercialization Centre (TECC) provides specialized solutions to catalyze the commercialization of technologies to promote the transfer of technologies and nurture the development of technology enterprises.
• Advanced Materials Research Centre (AMREC)
As the national advanced materials research entity, AMREC has the strategic role as the nucleus of development on advanced materials technology that is to explore the potential use of local commodities for higher value added applications, investigating the use of alternative new materials to reduce material consumption and cost and also to source for environmentally-friendly substitutes for safer and more comfortable living environment.
• National Centre For Machinery And Tooling Technology
The National Centre for Machinery and Tooling Technology is a state-of-the-art industrial support centre that provides end-to-end machinery and tooling solution. Located in Rasa Industrial Park, Hulu Selangor, the Centre provides customized solutions in commercial manufacturing processes in the area of design, prototyping and fabrication of machinery and equipment, as well as parts and components, molds and dies and jigs and fixtures. The Centre’s establishment is one of the government’s long-term strategies and action plan to turn Malaysia into an industrialized nation by the year 2020.
Contact details:
SIRIM Berhad
No. 1, Persiaran Dato’ Menteri
Seksyen 2, Peti Surat 7035
40911 Shah Alam
Selangor D.E., Malaysia.
Tel: 603-5544 6000 Fax: 603-5510 8095
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Website: www.sirim.my
CONCLUSION
With customers becoming more knowledgeable and educated, the demand for sophistication will rise and this will put increase pressure on research and development. Companies lagging behind in R&D will find it hard to sustain their business, and even face elimination if the situation deteriorates. To avoid finding themselves left out of this contemporary market, SMEs need to be able to leverage on new knowledge and innovative technologies to stay competitive with higher value added products and services. The R&D grants and incentives offered by both the public and private sector in Malaysia are immensely helpful in building resilient, sustainable and dynamic SMEs.
