Assessing The Effectiveness of Public Research Institutions Fostering Knowledge Linkages and Transferring Technology in Malaysia

Public Disclosure Authorized
FINANCE, COMPETITIVENESS AND

INNOVATION GLOBAL PRACTICE
OCTOBER 2020 THE MALAYSIA DEVELOPMENT EXPERIENCE SERIES
Assessing the
Effectiveness of Public
Research Institutions
Fostering Knowledge Linkages and
Transferring Technology in Malaysia

CONNECT WITH US
wbg.org/Malaysia
@WorldBankMalaysia
@WB_AsiaPacific
http://bit.ly/WB_blogsMY
OCTOBER 2020 THE MALAYSIA DEVELOPMENT EXPERIENCE SERIES
Assessing the
Effectiveness of Public
Research Institutions
Fostering Knowledge Linkages and
Transferring Technology in Malaysia
FINANCE, COMPETITIVENESS AND INNOVATION

GLOBAL PRACTICE
© 2020 International Bank for Reconstruction and Development / The World Bank
Sasana Kijang, 2 Jalan Dato Onn, Kuala Lumpur 50480, Malaysia
Some rights reserved.
This work is a product of the staff of The World Bank with external contributions. The findings,
interpretations, and conclusions expressed in this work do not necessarily reflect the views
of The World Bank, its Board of Executive Directors, or the governments they represent. The
World Bank does not guarantee the accuracy of the data included in this work. The boundaries,
colors, denominations, and other information shown on any map in this work do not imply any
judgment on the part of The World Bank concerning the legal status of any territory or the
endorsement or acceptance of such boundaries.
Nothing herein shall constitute or be considered to be a limitation upon or waiver of the

privileges and immunities of The World Bank, all of which are specifically reserved.
Rights and permissions: This work is available under the Creative Commons Attribution
3.0 IGO license (CC BY 3.0 IGO) http://creativecommons.org/licenses/by/3.0/igo. Under the
Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this
work, including for commercial purposes, under the following conditions:
Attribution: Please cite the work as follows: World Bank (2020) ‘Assessing the Effectiveness
of Public Research Institutions: Fostering Knowledge Linkages and Transferring Technology in
Malaysia,’ Washington, DC: The World Bank.
Third-party content: The World Bank does not necessarily own each component of the
content contained within the work. The World Bank therefore does not warrant that the use of
any third-party-owned individual component or part contained in the work will not infringe on
the rights of those third parties. The risk of claims resulting from such infringement rests solely
with you. If you wish to re-use a component of the work, it is your responsibility to determine
whether permission is needed for that re-use and to obtain permission from the copyright
owner. Examples of components can include, but are not limited to, tables, figures, or images.
All queries on rights and licenses should be addressed to World Bank Publications, The World
Bank, 1818 H Street NW, Washington, DC 20433, USA; e-mail: pubrights@worldbank.org.
Table of Contents
Acknowledgements 5
List of Figures 6
List of Boxes 7
List of Acronyms 8
Executive Summary 10
Chapter 1. Introduction and Objective 16

Chapter 2. Conceptual and Methodological Frameworks 18
Conceptual Framework 19
Methodological Framework 21
Chapter 3. Malaysia’s National Innovation Strategy and Policy Context 22
Overview of Malaysia’s National Research and Development Capacity 26
Research Output and Knowledge and Technology Transfer Activities 30
Chapter 4. Assessment of Enabling Factors for Knowledge and Technology Transfer 32
Governance and Performance Monitoring 33
Governance: Institutional Funding and Levels of Autonomy 36
Level of Autonomy through Governance Structures 38
Monitoring, Evaluation and Performance Management 40
Research Capacity, Policy and Technology Transfer 41
Research Policy and Capacity 41
Technology Transfer Policies and Incentives 43
Technology Transfer Support 45
Research Outputs, Knowledge Transfer and Technology Transfer from surveyed PROs and RCs 48
Chapter 5. Challenges and Obstacles to Technology Transfer and Commercialization 54
Chapter 6. Conclusions and Summary 60
Detailed Acknowledgements 66
Annex 1: Regional Survey Instrument and Sampling Frame 68
Annex 2: Snapshot of Main Policies around Science, Technology, R&D and Innovation in Malaysia 70
Annex 3: Revenue Sharing Distribution of Commercialization Activities 73
Annex 4: Questions and Classifications of Challenges and Obstacles Faced by PROs and RCs 74
References 75
Assessing the Effectiveness of Public Research Institutions: Fostering Knowledge Linkages and Transferring Technology in Malaysia 3
4 Assessing the Effectiveness of Public Research Institutions: Fostering Knowledge Linkages and Transferring Technology in Malaysia
Acknowledgements
Assessing the Effectiveness of Public Research Institutions in Fostering
Knowledge Linkages and Transferring Technology in Malaysia was
prepared by a team of the World Bank’s Finance, Competitiveness and
Innovation Global Practice (FCI, GP). The study was written by Smita
Kuriakose (Senior Economist, FCI GP) and Haris Tiew (Consultant, FCI GP)
with inputs from Pluvia Zuniga (Senior Consultant, Maastricht Economic
and Social Research Institute on Innovation and Technology (UNU–MERIT)).
Ruzita Ahmad (Team Assistant, FCI GP) provided valuable logistical support.
Kane Chong designed the report and its cover.
The study is based on the Malaysia specific results of the regional surveys on
public research institutions that were undertaken for the Regional Flagship
Report: “To the Frontier and Beyond: Spurring Innovation in Developing East
Asia” being led by Xavier Cirera (Senior Economist, FCI GP) and Andrew
Mason (Lead Economist, East Asia Chief Economist’s office). The survey
instrument and methodology framework was designed by Pluvia Zuniga.
The team worked under the overall guidance of Firas Raad (Country
Manager, Malaysia) and Cecile Thioro Niang (Practice Manager, FCI GP). The
team is grateful for very insightful comments from Professor VGR Chandran
Govindaraju (Associate Professor, Department of Development Studies,
Faculty of Economics and Administration, University of Malaya), Jaime Frias,
(Senior Economist, FCI GP) and Anwar Aridi (Senior Economist, FCI GP). The
team extends a special thanks to all the Public Research Organizations and
Research Centers surveyed for their time spent on the interview and filling
out the survey questionnaires. The detailed acknowledgements in the Annex
lists out all personnel that provided their time and inputs to the survey.
List of Figures and Boxes
List of Figures
Figure 1. Factors that Determine Technology Transfer 20
Figure 2. Proportion of R&D Expenditure by Sector and GERD (percentage of GDP) 27
Figure 3. International Comparison of R&D Intensity (GERD as a percentage of GDP) 27
Figure 4. Source of R&D Funds (2016) 27
Figure 5. GERD by Research Orientation (2014-2016) 28
Figure 6. Research Orientation by Sectors (2016) - R&D Expenditure RM Millions 28
Figure 7. R&D Staff by Functions (2014-2016) 29
Figure 8. Proportion of Researchers by Qualification (2016) 29
Figure 9. Proportion of Researchers (FTE) by Sectors (2016) 29
Figure 10. Evolution of Scientific Production (Number of Peer-Reviewed Publications) 31
Figure 11. Share of International Collaborations among Scientific Publications 31
Figure 12. Quality of Science, the H-Index and Average Citations per document, Peer-reviewed Publications 31
1996-2018
Figure 13. Distribution of Intellectual Property Outputs 31
Figure 14. Sources of Funding, Proportion of Total Expenditure in 2018 37
Figure 15. Average Sources of Funding for PROs and RCs 37
Figure 16. R&D Funding Sources for PROs Based on Total R&D Expenditure in 2018 38
Figure 17. R&D Funding Sources for RCs Based on Total R&D Expenditure in 2018 38
Figure 18. Percentage of Respondents by Level of Autonomy Practice in Strategic Decisions for RCs 39
Figure 19. Percentage of Respondents by Level of Autonomy Practice in Strategic Decisions for PROs 39
Figure 20. Availability of Research and Academic Incentives for PROs 44
Figure 21. Availability of Research and Academic Incentives for RCs 44
Figure 22. Support by Technology Transfer Offices for PROs 46
Figure 23. Technology Transfer Support Priority Areas for PROs 47
Figure 24. Technology Transfer Support Priority Areas for RCs 47
Figure 25. Propensity to engage in Knowledge Transfer Activities: Percentage of Entities Declaring Activity 48
(2017-2018)
Figure 26. Average Number of Research Outputs (2017–2018) per FTE Research Staff for PROs and RCs 49
Figure 27. Propensity to engage in Technology Transfer Activities: Percentage of Entities Declaring Activity 50
(2017-2018)
Figure 28. Average Number of Technology Transfer Activities (2017–2018) per FTE Research Staff for PROs 50
and RCs
Figure 29. Severity of the lack of these research and technology transfer competencies as barriers to 56
knowledge and technology transfer for PROs and RCs
Figure 30. Severity of these institutional failures as barriers to knowledge and technology transfer for PROs 57
and institutional challenges perceived by PROs and RCs
List of Figures and Boxes
List of Boxes
Box 1. Public Research Institutions in Malaysia 24
Box 2. Roles of PROs in a Time of Crisis: Responses to the COVID-19 Crisis 34
Box 3. Complex Landscape of R&D Funding and Policy Agencies in Malaysia 42
Box 4. Science and Innovation for Businesses, Environment and Communities 51
Box 5. Leading the Way for Palm Oil Research 52
Box 6. Facilitating Collaboration Between the Government, Industry and Academia 65
List of Acronyms
CEMACS Center for Marine and Coastal Studies
CLG Company Limited by Guarantee
CoE Center of Excellence
COVID-19 Coronavirus Disease 2019
EPU Economic Planning Unit
FRI Fisheries Research Institute
FTE Full-Time Equivalent
GDP Gross Domestic Product
GLCs Government Linked Companies
GERD Gross Expenditure on Research and Development
HEI Higher Education Institution
HICoE Higher Institute Center of Excellence
IMR Institute for Medical Research
IP Intellectual Property
IPR Intellectual Property Rights
MARDI Malaysian Agricultural Research and Development Institute
MARii Malaysia Automotive, Robotics & IoT Institute
MASTIC Malaysia Science and Technology Information Center
MEBHE Malaysian Education Blueprint (Higher Education)
MGI Malaysian Genome Institute
MIMOS Malaysian Institute of Microelectronic Systems
MITI Ministry of International Trade and Industry
MOA Ministry of Agriculture and Food Industries
MOE Ministry of Education
MOH Ministry of Health
MoHE Ministry of Higher Education
MOSTI Ministry of Science, Technology and Innovation
MPOB Malaysian Palm Oil Board
MTIB Malaysian Timber Industry Board
MyIPO Intellectual Property Corporation of Malaysia
NHESP National Higher Education Strategic Plan
NIPP National Intellectual Property Policy
NPSTI National Policy on Science, Technology and Innovation
List of Acronyms
NSTP1 First National Science and Technology Policy
NSTP2 Second National Science and Technology Policy
OECD Organization for Economic Cooperation and Development
PA Performance-based Assessment
PCT Patent Cooperation Treaty
PRA Public Research Asset
PRO Public Research Organization
R&D Research and Development
R&D&C&I Research, Development, Commercialization and Innovation
RC Research Center
RU Research University
S&T Science and Technology
SME Small and Medium Enterprise
STI Science, Technology and Innovation
UM Universiti Malaya (University of Malaya)
UKM Universiti Kebangsaan Malaysia (National University of Malaysia)
UPM Universiti Putra Malaysia
USM Universiti Sains Malaysia (University of Science Malaysia)
UTM Universiti Teknologi Malaysia (University of Technology Malaysia)
WHO World Health Organization
WIPO World Intellectual Property Organization
Executive
Summary
Executive Summary
The transition to a more innovation-based a select few cases, raising concerns regarding the
growth model is even more urgent in the current efficacy of the recent efforts. In addition to national
uncertain global context[1] . While the GDP growth plans with some emphasis on enhancing R&D
rate has proven resilient in recent years, declining and innovation, industry-specific plans were also
oil and gas output, coupled with economic shocks, introduced. However, without effective technology
including the recent COVID-19 pandemic, have diffusion institutions, these would be difficult to
dented the growth momentum. In this difficult accomplish. A large emphasis is being placed on the
context, a sustained increase in private investment, enhancement of the quantity of R&D and innovation
coupled with improvements in productivity will but not necessarily to the quality of R&D and its links
be necessary to maintain a sustainable economic with industry. This implies a loss in opportunity of
growth trajectory that enables Malaysia to reach making a greater impact on economic diversification,
high-income status. There is a significant body of industrial development and growth.
evidence to demonstrate a positive correlation
between levels of innovation and productivity (see Various institutional and legal factors determine
Hall, 2011; and Mohnen and Hall, 2013). the extent of technology transfer that takes
place from public research. The channels through
Malaysia recognizes the need to embrace an which technology transfer is facilitated depend on
innovation-driven growth model to weather the several factors that include: (i) research capabilities
current global crisis and achieve its aspirations and relevance (orientation); (ii) the institutional
of becoming a high-income nation. Malaysia has setting of research institutions (structure and
transformed what was once an agricultural economy, governance); (iii) the legal and regulatory framework
to one that is manufacturing-led. Recognizing the governing public research institutions and
importance of productivity led growth model, universities (e.g. employment laws); (iv) supportive
research and development (R&D) resources and intermediary structures and finance availability; and
expenditures in Malaysia grew over the years as did v) firms’ absorption capacity. This list is by no means
policy efforts through reforms and improvements to exhaustive but rather highlights some of the key
bolster educational as well as science, technology areas that facilitate technology transfer.
and innovation capabilities and outcomes.
Using the results from a new survey on public
Public research organizations (PROs) and research institutions (PROs and University
universities play a pivotal role in the innovation Research Centers), this study aims to analyze the
ecosystem, given their role in the creation and levels of knowledge and technology transfer in
diffusion of new knowledge. To facilitate diffusion, Malaysia. To achieve the stated aim, the study uses
the ecosystem and institutional setting should a new survey on public research institutions. A wide
encourage knowledge to move across innovation range of characteristics and factors are assessed to
actors; more precisely between knowledge creators determine the effectiveness of technology transfer.
(universities and PROs) and users (firms and These include the national policy framework,
societies). Further, there is an important role for institutional and legal frameworks, research
the government to design and implement policies capabilities of personnel and coordination across
that would facilitate this knowledge transfer. This stakeholders and policies. It also aims to analyze
relationship between academia-government and the challenges and obstacles that exist in fostering
industry is often referred to as the triple helix. such linkages between research and industry.
These Malaysia specific survey results are based
There is a need to focus efforts on improving on a regional survey that has been conducted in
the effectiveness of public research efforts three countries in the region and will inform the
with a view to have impactful results in markets forthcoming World Bank Study, To the Frontier and
and society. To date, the successes of PROs and Beyond: Spurring Innovation in Developing East
higher educational institutes have been limited to Asia (Cirera et al., 2020). In addition to Malaysia,
[1] Source: Boosting Competitiveness chapter in the Forthcoming Report: “Aiming High: Navigating the Next Stage of Malaysia’s Development”, 2020.
Executive Summary
the countries participating in this survey include the organizations to industry. Though recent statistics
Philippines and Vietnam. have shown increases in the number of scientific
outputs and intellectual properties, the dynamics
Malaysia has seen some noteworthy progress of knowledge transfer and commercialization
in the overall STI landscape. Numerous science, of the research outputs derived are completely
technology and innovation (STI) plans and policies different. For instance, the propensity to engage
introduced by the government over the years in technology transfer activities for PROs and RCs
reflect the country’s aim to become a knowledge are markedly lower than the propensity to engage
and innovation-based economy. The plans and in knowledge transfer activities. Furthermore, only
policies that were introduced in stages brought a few PROs reported successful commercialization
about significant changes in the national STI goals of research outputs produced through licensing. A
from developing local capabilities and infrastructure large proportion of RCs engage in contract research
to the current goals of exploiting research and agreements whilst other forms of technology
innovation output in markets. Malaysia has seen transfer activities remain moderate to low. RCs also
positive trends in research and innovation activities have had some experience in commercializing their
through overall growth in R&D intensity, the number research outputs through spin-offs or start-ups but
of R&D personnel, growth in overall research output the frequency of them commercializing research
and inventions among many other indicators. It also outputs is rare. Overall, only a small number of
brought large reforms to the roles and governance PROs and RCs have sustained frequent success in
of public research organizations and universities. technology transfer and commercialization whereas
a larger number of PROs and RCs mainly struggle to
Policy changes made in the performance- achieve much success.
based budgeting have seen improvements in
publications and patents, as well as collaborations Inconsistent funding, ineffective implementation
with industry. According to the World Intellectual of incentives, cultural gaps between industry and
Property Organization (WIPO) Global Innovation research are some of the most cited problems for
Index, 2019, Malaysia’s strengths lie in having a research as well as knowledge and technology
very good score in university- industry research transfer. The complex funding mechanisms
collaboration, and this might be a result of the combined with budgetary pressures contribute to
public policies and regulations undertaken by the inconsistency in the flow of funding for PROs and
Government aimed towards strengthening the RCs limiting the ability to conduct certain research
industry-academia linkages. In the case of PROs, activities and potentially transfer knowledge
those who are either corporatized, or companies and technology. Additionally, incentives towards
limited by guarantee, are able to fund their research technology transfer and commercialization are
through different private sources. Further, they all ineffectively implemented as career progressions
have industry representations and tend to have in universities are still largely driven by scientific
more autonomy as they have a larger percentage publications. Cultural gap between the research
of independent activities compared to other types institutions and industry arises due to the differences
of PROs. This underscores the relationship between in expectations from one party of the other, creating
institutional funding sources and the degree of a perceived lack of demand from industry. Combined
autonomy that institutions have. Encouragingly, there with communication obstacles to align interests
is a large amount of collaborative research being and collaborate, frictions between the two arise
undertaken by both PROs and research centers (RCs) inhibiting effective collaborative networks as well as
indicative of the policies and measures in place to industry-focused research outputs and innovations.
foster greater industry- research collaboration.
The current reforms being implemented in Malaysia
However, there has been little progress seen in in the sector could be further strengthened by
the commercialization of research outputs and addressing the issues highlighted below to achieve
technology transfer activities from research more impact.
Executive Summary
With many different ministries involved in R&D expenditure by firms and should be used to inform
and innovation processes, a more coordinated future policymaking.
approach needs to be implemented . The
heterogeneous nature of research and innovation Greater autonomy encouraged to make strategic
actors in Malaysia, combined with the numerous decisions at RCs in Universities. Through the various
agencies, organization and bodies that play a role policies being proposed, MoHE aims to reduce
in R&D funding create a complex and at times the dependence of Higher Education Institutions
confusing landscape for research institutions. The (HEIs) on government funding and enhance their
establishment of a centralized research management autonomy. However, past research suggests
agency has been talked about since the inception that it is hard to tell if any major improvements in
of the 11th Malaysia Plan. This agency is intended operations, management or financial sustainability
to better coordinate all publicly funded research, were achieved (OECD, 2016). At the same time, the
development, commercialization and innovation autonomous status assigned to the universities has
(R&D&C&I) projects to ensure effective and efficient not been accompanied by significant amendments
utilization of public funds. The establishment of this to the structure of HEIs, as some operations may
centralized research management agency to provide still closely adhere to the governance framework of
a coordination framework to national research the civil service. The decreased funding from the
objectives and priorities will be an important government is putting pressure on RCs to find new
development. funding sources and should be accompanied by
greater autonomy to make strategic decisions at the
Greater consistency required around objectives level of the center while recognizing that they are
to encourage long term strategic planning for under the overall purview of the university.
research. While being subjected to performance
monitoring and evaluation, some surveyed PROs Better implementation of academic incentives
and RCs struggle to have a long-term strategic provided towards technology transfer and
research plan, especially pertaining to long-term commercialization of research. While both PROs
investment strategies. Sources of funding to a large and RCs have incentives to increase technology
extent determine the strategic focus of research transfer and commercialization, they are not very
organizations. Uncertainty of funding levels as effective. This is a result of the weak recognition of the
well as vacillating goals and strategies set forth value of technology transfer and commercialization
by government policies jeopardize the research initiatives in the performance evaluation and careers
continuity resulting in a degree of short-sightedness of researchers. The universities in particular are
on research and development plans for some PROs subject to a new performance-based regime that
and RCs. emphasizes quantitative performance criteria-
notably publications and patents (OECD, 2015). This
There needs to be a systematic effort towards has led to an increase in the number of publications
implementing consistent monitoring and and patents as research outputs but has not led to a
evaluation (M&E) frameworks across public simultaneous increase in commercialization activity.
research institutions to inform policy making. The main factor that dissuades researchers from
Inconsistent frameworks that government agencies/ engaging in technology transfer and entrepreneurial
ministries use to collect data from these institutions activities is the heavy weight scientific publications
make assessing the returns to these investments at (number and journals) still receive among the merit-
the national level a challenge. There needs to be driven criteria for career advancement and salaries.
a consistent M&E framework used across funding There needs to be a better implementation of the
programs and agencies to gather data to enable a incentives provided towards technology transfer
robust assessment of returns to R&D expenditure. and commercialization by recognizing the quality
In addition, the data available through firm-level of Intellectual Property (IP) rather than quantity of
census implemented by the Department of Statistics, IP so that commercialization efforts receive greater
Malaysia contains important information on R&D rewards for researchers’ career advancements.
Executive Summary
M an agement pro ce s se s s ho u ld a l so b e alongside project-based funding. Further, TTOs

reconsidered and streamlined to facilitate should tap into the innovation and technology
commercialization activities. HEIs have gained managers association that has been created as a
substantial flexibility and are less restricted by platform to improve the capabilities of managing IPs
bureaucratic constraints than in the past. The by exchanging experiences.
creation of wholly owned corporate subsidiaries
to handle commercialization has substantially N eed to faci litate greater secondment
helped to improve the process of engaging with opportunities especially in PROs and invest
industry (OECD, 2015). These subsidiaries can in designing ways for researchers to closely
operate like private entities, and freedom from communicate with industry to undertake greater
regulatory constraints has allowed them to handle collaborative research. While both PROs and RCs
IP licensing agreements and spin-offs. Importantly, engaged in collaborative research, a few challenges
researchers can create and decide to work for were highlighted. PROs cited employment laws and
spin-offs. However, bureaucratic obstacles still the lack of staff mobility to engage in the industry as
exist, particularly in some PROs which came up one of the factors that hindered effective industry-
increasingly in the survey responses. Reading the research collaboration. Further, low skills and
provisions of the IP Commercialization Policy of absorptive capacity and capabilities of businesses
publicly funded technologies would imply that and industries in Malaysia were important factors
national policies do not prohibit the formation of that affected the demand for research outputs as
spin-offs by PROs. Instead, legal statutes regulating well as success in industry-research efforts. Lastly,
each PRO as well as its policies and regulations may the lack of effective communication between
prevent researchers to engage in commercialization public research entities and industry was also cited
activities and forming spin-offs. PROs suffer from as a problem. Addressing these challenges could
bureaucracy, and this might further hinder their greatly facilitate further linkages which in turn
ability to commercialize technologies and IPRs. could create more opportunities for technology
transfer and commercialization. These would
Strengthening Technology Transfer Offices include (i) encouraging and facilitating secondment
(TTOs) to enable them to provide support to opportunities for researchers in PROs and RCs
enhanced linkages with industries and facilitate without having any repercussions on career
demand-driven research and technology transfer advancements; (ii) investing in designing ways
capabilities. In recent times, public HEIs have for researchers to communicate and work more
established TTOs to facilitate the commercialization closely with industry and; (iii) strengthening current
process of R&D outputs by academic researchers. mechanisms and infrastructure of communication
However, these TTOs are relatively new and lack and alignment to produce more industry-relevant
the know-how and expertise pertaining to IPR, research and increase capacity of the firms. In
technology transfer management and technology addition, efforts should be made to design a
evaluation mechanisms. Some PROs have small platform that would provide both researchers and
technology transfer offices, which are understaffed potential users (industry and community) information
with relevant personnel such as lawyers or business on available research and possible demands from
managers to conduct and manage technology users. This could potentially serve as a platform for
transfer activities. The processes are sometimes awareness-raising, networking opportunities and
managed by the scientists themselves who do identifying potential collaborations.
not have the required expertise. TTOs should be
prioritized in research universities and PROs by
staffing them with competent personnel who can
further technology transfer and commercialization
activities from the research organizations. In the
interim, process-based financial support could be
provided to assist researchers to get external help
Executive Summary
Challenges/ Obstacles Faced Proposed Recommendations
The heterogeneous nature of research and innovation actors in With many different ministries involved in R&D, there needs to be
Malaysia, combined with the numerous agencies, organization a more coordinated approach so that research organizations are
and bodies that play a role in R&D funding creates a complex not dealing with fulfilling short term and diverse objectives laid out
and at times confusing landscape for research institutions. by the various funding bodies that they receive funding from. The
establishment of a centralized research management agency has
While being subjected to performance monitoring and been talked about since the inception of the 11th Malaysia Plan. This
evaluation, some surveyed PROs and RCs struggle to have a agency is intended to better coordinate all publicly funded R&D&C&I
long-term strategic research plan, especially pertaining to their projects to ensure effective and efficient utilization of public funds.
long-term investment strategies. Uncertainty of funding levels as The establishment of this centralized research management agency
well as vacillating goals and strategies set forth by government to provide a coordination framework to national research objectives
policies jeopardize the research continuity resulting in a degree and priorities will be an important development.
of short-sightedness on research and development plans for
some PROs and RCs.
There is no consistent framework that all government agencies/ Need for the use of a consistent M&E framework across funding
ministries use to collect data from these institutions, which programs and agencies to gather data to enable a robust assessment
would make assessing the returns to these investments at the of returns to R&D expenditure. In addition, the data available through
national level a challenge. firm-level census implemented by the Department of Statistics,
Malaysia contains important information on R&D expenditure by
firms and should be used to inform future policymaking.
Through the various policies being proposed, MoHE aims to The decreased funding from the government is putting pressure
reduce the dependence of HEIs on government funding and on RCs to find new funding sources and should be accompanied by
enhance their autonomy. However, the autonomous status greater autonomy to make strategic decisions at the level of the
assigned to the universities has not been accompanied by center, while recognizing that they are under the overall purview of
significant amendments to the structure of HEIs, particularly to the university.
some strategic decisions for RCs.
While both PROs and RCs have incentives to increase technology The need for better implementation of the incentives provided
transfer and commercialization, they are not very effective. The towards technology transfer and commercialization by recognizing
new performance-based regime that emphasizes quantitative the quality of IP rather than quantity of IP so that commercialization
performance criteria has led to an increase in the number of efforts receive greater rewards for researchers’ career
publications and patents as research outputs but has not had advancements.
results for increase in commercialization activity. The main factor
that dissuades researchers from engaging in technology transfer
and entrepreneurial activities is the heavy weight scientific
publications (number and journals) still received among the
merit-driven criteria for career advancement and salaries.
HEIs have gained substantial flexibility and are less restricted by Management processes should also be reconsidered and streamlined
bureaucratic constraints than in the past. However, bureaucratic to create more cost and time-effective decision-making to facilitate
obstacles still exist, particularly in some PROs which came up commercialization activities.
increasingly in the survey responses. Reading the provisions
set forth by the IP Commercialization Policy of publicly funded
technologies would imply that national policies do not prohibit
the formation of spin-offs by PROs. Instead, legal statutes
regulating each PRO as well as its policies and regulations
may prevent their researchers to engage in commercialization
activities and forming spin-offs.
While the establishment of TTOs are becoming more prevalent TTOs should be strengthened in research universities and PROs by
for the public HEIs in Malaysia, they are relatively new and rather staffing them with competent staff that can further technology
inexperienced. PROs face certain issues in IPR and technology transfer and commercialization activities from the research
management skills such as the lack of know-how and expertise organizations. Further, these TTOs should tap into the innovation
pertaining to IPR, technology transfer management and and technology managers association that has been created as a
technology evaluation mechanism which hinder the effectiveness platform to improve the capabilities of managing IPs by exchanging
of technology transfer in PROs. experiences.
PROs cited employment laws and the lack of staff mobility (i) Encourage and facilitate secondment opportunities for
to engage in the industry as one of the factors that hindered researchers in PROs and RCs without having any repercussions on
effective industry-research collaboration. The low skills and career advancements; (ii) Invest in designing ways for researchers
absorptive capacity and capabilities of businesses and industries to communicate and work more closely with industry to produce
in Malaysia were also important factors that affected the demand more industry-relevant research and also help increase capacity of
for research outputs as well as success in industry-research the firms. In addition, efforts should be made to design a platform
efforts. Lastly, the communications between public research that would provide both researchers and potential users (industry
entities and industry are cited as a problem in establishing and community) information on available research and possible
effective communications with industry players. Addressing demands from users.
these challenges could greatly facilitate further linkages.
CHAPTER 1
Introduction
and Objective
Chapter 1: Introduction and Objective
The transition to a more innovation-based growth model is even more urgent in the current uncertain
global context.1 While the GDP growth rate has proven resilient in recent years, declining oil and gas output,
economic shocks, and the COVID-19 pandemic have dented the growth momentum. In this difficult context,
a sustained increase in private investment, coupled with improvements in productivity will be necessary
to maintain a sustainable economic growth trajectory that enable Malaysia to reach high-income status.
There is a significant body of evidence to demonstrate a positive correlation between levels of innovation
and productivity (see Hall, 2011; and Mohnen and Hall, 2013, for a survey of a large sample of studies in
the OECD). In this context, the key challenge that Malaysian policymakers face relates to facilitating and
accelerating the transition to this innovation-based growth model. In this process, public research plays
a key role by addressing market failures in innovation, especially the production of new knowledge and
supporting its diffusion in the economy.
Public research organizations (PROs) and universities play a pivotal role in the innovation ecosystem,
given their role in the creation and diffusion of new knowledge. There is a large consensus in the
endogenous growth literature on the importance of creation and diffusion of new knowledge for productivity
and economic growth (Romer, 1990; Aghion and Howitt, 1992). The diffusion of new knowledge is a
prerequisite for long-term increases in production and wealth (Grossman and Helpman, 1993). To facilitate
diffusion, the ecosystem and institutional setting should encourage knowledge to move across innovation
actors; more precisely between knowledge creators (universities and PROs) and users (firms and societies).
Further, there is an important role for the government to design and implement policies that would facilitate
knowledge transfer. This relationship between academia-government and industry is often referred to as
the triple helix.
While knowledge transfer can occur through various channels, the strong interaction between
industry and public research institutions is one of the most important factors for effective knowledge
generation and diffusion. While PROs were established for specific missions, such as to promote defense,
agriculture and health-related research; helping domestic industries remains one of their important missions
globally even in advanced and industrialized countries. They can be especially useful for small and medium
enterprises (SMEs) conducting research to find solutions for existing problems in the industry as well as to
support research activities for new and emerging industries. The degree to which research from PROs and
universities can influence technological change and innovation in industry to a large extent depends on the
alignment between supply and demand of knowledge, and the enabling ecosystem that effectively supports
the knowledge and technology transfer between these research institutions and industry.
1 Source: Boosting Competitiveness chapter in the Forthcoming Report: “Aiming High: Navigating the Next Stage of Malaysia’s Development”, 2020.
CHAPTER 2
Conceptual and
Methodological
Frameworks
Chapter 2: Conceptual and Methodological Frameworks
A mature national innovation system supports firms to converge to the technological frontier and
increase productivity growth. As highlighted in Cirera and Maloney (2017), a mature innovation ecosystem
does so by promoting the flow of knowledge generated from the supply side (universities and PROs) to
the demand side (firms) and establishing policies that facilitate knowledge transfer. However, flows to the
demand-side are often broken by the underdevelopment or malfunctioning of some universities and PROs,
or the lack of adequate policies to support commercial research. This translates into the lack of collaborations
between industry and public research institutions.
Conceptual Framework2
Globally, there has been recognition of the importance of demonstrating the returns of investments
in R&D. There has been a growing emphasis on the role of innovation for national competitiveness, with
countries allocating substantial national budget to finance research activities and the public research sector.
Further, governments worldwide are urged to know the impact and results of public funding of research,
science and technology (Zuniga, 2020). In developed countries, monitoring activities were undertaken
since the early 2000s. These assessments were largely focused on technology and commercialization of
intellectual property as measures of technology transfer. Following the recommendations from the European
Commission, a different approach has emerged in European countries and developing countries in Latin
America (see the Valencia Manual for Technology Transfer activities) in recent years (ibid.).
There has been a recognition of the need for a more comprehensive analysis to measure technology
transfer. This approach highlights the need to recognize the different channels through which research
impacts economic development and innovation. Here, special importance is given to factors that foster
greater industry-science collaboration. These factors include the provision of advanced human capital, the
importance of researchers’ mobility across sectors and institutions, as well as joint research and training
programs with industry. In designing research and technology transfer assessments, governments also
need to consider the differences across scientific disciplines when measuring and evaluating the results of
research and technology transfer activities.
There are various ways in which knowledge and technology transfer can take place. Technology transfer
can be defined as the movement of know-how, skills via people, technical knowledge, methods or technology
from one organizational setting to another (Roessner et al., 2010). Figure 1 illustrates the different channels
through which knowledge and technology get transferred from public research institutions to industry and
society. Technology commercialization implies the selling, licensing of, or purchasing of new technologies
(including intellectual property rights and know-how, research tools and materials, etc.), contracting of
technology services and related-knowledge, and spinoff creation, including licensing to startups (external to
research institutions). The degree to which these activities take place would determine the returns to R&D
and in turn the effectiveness of these research institutions.
Various institutional and legal factors determine the extent of technology transfer that takes place
from public research. The channels through which technology transfer is facilitated depend on several
factors that include: (i) research capabilities and relevance (orientation); (ii) the institutional setting of research
institutions (structure and governance); (iii) the legal and regulatory framework governing public research
institutions and universities (e.g. employment laws); (iv) supportive intermediary structures and finance
2 This section is based on Zuniga (2020)
availability; and v) firms’ absorption capacity. This list is by no means exhaustive but rather highlights some
of the key areas that facilitate technology transfer. The survey design that is later discussed is structured
around these enabling factors.
Collaboration with industry can take many forms and there are various formal means of technology
transfer. These include R&D contracting and consultancy services, the hiring of new graduates and
post-graduates, joint training programs (e.g. industrial PhD in industry), the (sharing of) equipment and
instrumentation, bilateral flows of personnel (e.g. secondment of academic (industry) researchers in industry
(scientific institutions), R&D consortia and joint research centers, among others. Industry and society also
receive new ideas from science through informal means such as publicly available publications (by accessing
scientific databases), personal contacts, and information disseminated at meetings, conferences and
networking events.
This study aims to analyze the levels of knowledge and technology transferred from publicly funded
research institutions in Malaysia and the role of these enabling factors discussed above. A wide
range of characteristics and factors are assessed including the national policy framework, institutional and
legal framework, capabilities and coordination amongst other factors that determine the effectiveness of
technology transfer as illustrated in Figure 1.
FIGURE 1: Factors that Determine Technology Transfer
Institutional and Legal

Framework Incentives Economic Development
Policy Framework
Informal rules, and Industry Demands
norms, customs
Scientific publications
Dissemination of knowledge via conferences,

seminars, meetings with industry, and others
Education and training

Productivity Growth,
of students/employment
New Markets, New
Industry
Public Industries,
University-Industry joint research, Innovation and
Research and Competitiveness
extension services, joint research centers New Technological
Education (exporting and
Competencies
value chains),
Consultancies, contact research, extension services
Employment
(adoption, certification, engineering services)
Technology licensing to established firms Technology

and new start-up companies Transfer
Creation of spinoffs and other forms

of academic entrepreneurship
Framework
Conditions finance,
Research Capabilities Coordination, Intermediation,
competition, common
and Orientation and Supportive Services
law, IPR systems,
firm regulation
Source: Correa and Zuniga (2013) building on Bercovitz and Feldman (2006) and WIPO (2011)
Methodological Framework
To achieve the stated aim, the study uses a new survey on public research institutions. These Malaysia
specific survey results are based on the recent regional survey designed to measure the means through
which public research institutions (Universities and PROs) transfer knowledge and technology to industry
(and other innovation actors). It also aims to analyze the challenges and obstacles that exist in fostering such
linkages. The survey has been conducted in three countries in the region and will inform the forthcoming
World Bank East Asia Regional Innovation Flagship Report (Cirera et al., 2020). In addition to Malaysia, the
countries participating in this survey include the Philippines and Vietnam. For details regarding sampling
methodology for the regional survey please see Annex 1.
With a view to assessing the extent of technology transfer and the impact of public institutions on
innovation, this study primarily aims to look at identifying factors that enable or constrain the flow
of knowledge and technology transfer between research and industry in Malaysia. Through the survey
on research institutions, this study also aims to (i) discover the role that PROs and universities play in the
provision of new knowledge and innovation opportunities in Malaysia; (ii) explore the results of publicly
funded research at national research institutions by investigating the main channels of knowledge and
technology transfer; (iii) analyze the conduciveness of the current governance (or institutional setting) and
incentives structure for commercialization of research technology and transfer linkages with industry and
(v) finally, suggest ways to harness the impact of public research entities and their contribution to national
innovation development.
The survey was implemented on a sample of PROs and RCs in universities that are engaged in research.
For the sampling of PROs, a list of public research institutes classified by Malaysia Science and Technology
Information Centre (MASTIC) was used as a sampling frame. This list was supplemented by a list of PROs
compiled by the team. Ten PROs were randomly selected from different ministerial bodies covering different
technical fields and industries. Those focused solely on social sciences or humanities were excluded due to
their distant links to commercialization and industry. For the sampling of RCs, public universities with the
status of “research universities” classified by the Ministry of Higher Education (MoHE) were selected as these
universities are expected to advance knowledge through research and publication, focusing on innovation
activities (see Box 1 for details).
A total of 16 University RCs were surveyed from four of the five research universities. The process of
sampling RCs in the study involved compiling a list of RCs for each of the five public research universities
in Malaysia. Before a random sample was drawn, the RCs were classified into three categories: a) Higher
Institution Center of Excellence (HICoE) (which are specified by the Ministry of Education); b) Centers
of Excellence (CoE) (classified by the universities); and c) RCs (which are neither HICoEs nor CoEs). Each
university would have at least one of each type of research center within the sample for a more accurate and
robust representation. A total of 16 University RCs were surveyed from four of the five research universities.3
The surveys were conducted through face-to-face interviews and the respondents were given a few weeks
to fill in the remainder of the survey that required additional personnel to provide inputs.4
3 Due to administrative protocol limitations, we were unable to conduct any interviews/ administer the survey on one of the five research universities.
4 Only one survey for a PRO was not conducted through a face-to-face interview but through email exchange.
CHAPTER 3
Malaysia’s National
Innovation Strategy
and Policy Context
Chapter 3: Malaysia’s National Innovation Strategy and Policy Context
The research and development model in Malaysia has evolved over the years in response to the economic
development objectives of the country. With a view to move towards greater economic diversification and
being a more knowledge-intensive economy, Malaysia aims to move its focus from research and technology
suited to an early plantation economy to technologies fitting of a modern high value-added economy (Akoum,
2016). In the early stage of development, several research organizations were established to promote R&D
efforts in the agricultural sector. Research played a pivotal role in Malaysia’s agricultural development during
Malaysia’s agrarian economy stage producing primary products such as rubber (ibid.).
The Fifth Malaysia Plan (1986-1990) was the transition point for the development of science and
technology (S&T) policies for Malaysia. S&T policies were greatly emphasized for the first time in the Fifth
Malaysia Plan, and it brought about a large precedent for following plans. With this plan, the government
aimed to push research and development as a robust driver for economic development, mainly through
agriculture and manufacturing. The plan aimed to address the issues within the realms of S&T of the country
citing ailments such as the lack of capabilities for technology development and adoption to compete at the
global scale, the need to buttress the infrastructure for R&D in the nation, as well as addressing frictions of
technology transfer of R&D findings (EPU, 1986). From 1986 onwards the Government of Malaysia also came
up with Industrial Masterplans which provided long-term indicative plans for the development of specific
sub-sectors. Export-oriented industries and foreign investment were further promoted. Likewise, Malaysia’s
commitment to harness and advance S&T was reflected in the formulation and implementation of the First
National Science and Technology Policy (1986-1989) (NSTP1) to achieve the nation’s goals for science and
technology. The main objective of the NSTP1 was to promote Malaysia’s self-reliance in S&T which included
plans to upscale local capabilities in R&D and improve the infrastructure of science and education. The policy
also emphasized the balanced development of natural resources, ecology and environmental preservation.
The 1990s saw the shift towards the need for greater commercialization of public research.
Commercialization of public research began with the Sixth Malaysia Plan (1991-1995), which emphasized
more market-oriented public R&D programs by exploiting commercialization of research and technology
(Govindaraju, 2010) and striving to export research and technology from Malaysia. It also greatly emphasized
the importance of improving intellectual property rights in Malaysia as one of the key components to
improving the overall innovation environment in Malaysia. The following editions of the plans continued
these efforts to this day, striving for R&D competitiveness and moving towards a knowledge-based and
innovative economy.
BOX 1
Public Research Institutions

in Malaysia
The latest data available reported that there are over 35 PROs in Malaysia covering a wide range
of fields, including social sciences and humanities. PROs in Malaysia are under the purview of different
ministries and can be classified into three different categories: a ministry division, a statutory body or a
corporation/company limited by guarantee (CLG). Governance, management and funding will differ from
one category to another.
Management oversight, funding and regulatory issues concerning PROs that are ministry divisions
are largely done by the governing ministry. Examples of ministry division PROs include the Fisheries
Research Institute (FRI) under the purview the Ministry of Agriculture and Food Industries (MoA) and
the Institute for Medical Research (IMR) under the Ministry of Health (MoH). Statutory PROs are created
by an act of the Malaysian parliament stipulating how the PRO is funded and governed. Statutory PROs
are usually governed by an independent trust board. Examples of such PROs include the Malaysian
Agricultural Research and Development Institute (MARDI), which was created and governed by the
MARDI Act of 1969. However, the statutory PROs can be funded through different sources as well. For
instance, some statutory PROs such as the Malaysian Palm Oil Board (MPOB) and the Malaysian Timber
Industry Board (MTIB) are also on governing boards of their respective commodities, allowing them to
earn “cess”; a tax for each ton of commodity produced by planters in the country. PROs that are CLGs are
government owned corporations governed by the Companies Act of 2016 (replacing the former Company
Act of 1965) and have independent trust boards as well. Statutory PROs and CLGs are considered more
autonomous and less centralized compared to ministry division PROs. CLGs are considered the most
autonomous as they are not subject to the personnel policies and practices implemented by the Public
Service Department.
Presently, there are 20 public universities in Malaysia. In line with The National Higher Education
Strategic Plan Beyond 2020, the government of Malaysia restructured all public universities into
three categories: (i) research universities, (ii) focused universities (focusing on a certain area such as
technical education, management or defense) and (iii) comprehensive universities. Research universities
are expected to advance knowledge through research and publication, as well as focus on innovative
activities. In addition, they are also expected to increase the number of postgraduates, post-doctoral
students and academia in the country. There are currently five public research universities in Malaysia
namely University of Malaya (UM), Universiti Kebangsaan Malaysia (UKM), Universiti Sains Malaysia (USM),
Universiti Putra Malaysia (UPM) and University Teknologi Malaysia (UTM).
Within each university, different RCs and institutions exist. With the objective to further enhance the
levels of Malaysia’s R&D and innovation, the MoHE found that there is a need to recognize the potential
centers of excellence (CoE) in HEIs. In order to identify the best CoEs and RCs in Malaysia, the recognition
and award of the Higher Institution Center of Excellence (HICoE) was first introduced in 2008. The HICoE
classification was created where selected CoEs are invited to apply. These selected CoEs would have
to meet certain selection criteria based on quality of research, number of research outputs as well as
innovation. HICoEs are able to receive additional R&D funds to ensure that their research capabilities are
maintained at ‘world class’ level. They are also expected to lead research in collaboration with international
and industrial partners.
Source: Ministry of Higher Education and adapted from NSRC (2013)
With the goal to strengthen the support institutions and infrastructure to facilitate technological
innovations, the Malaysian government formulated and implemented the Industrial Technology
Development National Action Plans. The Industrial Technology Development: A National Policy and Plan
of Action (1990 – 2001) was followed by The Second National Science and Technology Policy and Plan of
Action (2002 – 2010) (NSTP2). The Industrial Technology Development Plan aimed to increase the overall
absorption and diffusion of technology with an emphasis on promoting awareness of the importance of
science and technology. On the other hand, the NSTP2 had a general goal to accelerate the development
of S&T capability by focusing on seven priority areas that included research and technological capability
and human resource capacity.5 Two general targets were set which were to increase gross expenditure on
research and development (GERD) to at least 1.5 percent of the national GDP and to have at least 60 R&D
personnel per 10,000 people in the labor force. To complement ongoing Industrial Masterplans, sector-
specific policy plans were also introduced. These include the National Biotechnology Policy (2005–2020) and
the Malaysia National Green Technology Policy (2009).
The Tenth Malaysia Plan (2011-2015) saw some abrupt changes to public research universities as well
as PROs. The lack of visible returns to this growing expenditure on R&D remains a concern for policymakers
globally. A further tightening of national budgets for both education systems as well as science and
technology (S&T) mounts additional pressure on public institutions to develop a complementary source
of funding as well. With aims to strengthen the performance culture of universities in Malaysia, the Tenth
Malaysia Plan stated the necessity to reduce the proportion of government funding to public universities
in Malaysia. This meant that universities would have to seek alternative sources of funding including
from the private sector with the intention of ensuring greater collaboration between universities and
industry to improve academic and research quality (EPU, 2010). At the same time, block funding for public
universities would be increasingly dependent on the performance outcomes related to research and
education (Amran et al., 2014). As for PROs, less dependence on public funding was also emphasized
with various funding mechanisms suggested. Such mechanisms included co-financing with investors to
enhance the participation of industry and private sector in public R&D, commercialization and innovation
(R&D&C&I) activities. Such plans were also in line with the government’s objective to decrease the public
deficit to 3% of GDP (OECD, 2016).
With an effort to mainstream Science, Technology and Innovation in the economy, the current National
Policy of Science, Technology and Innovation (2013-2020) (NPSTI) was introduced. The policy aims
to strengthen linkages with industry, strive towards more autonomy for public universities and research
institutions and to establish clear guidelines and standards to enhance commercialization of domestic
innovations among many other goals. By 2020, the government aims for a GERD of at least 2 percent of the
national GDP as well as at least 70 researchers per 10,000 labor force.
The technical fields of the surveyed PROs and RCs reflected some of the government’s initiatives and
STI policies focus. Out of 26 PROs and RCs, 15 of the PROs and RCs conduct research in biotechnology
(molecular biology; biosciences, etc.), in part due to the National Biotechnology Policy (2005–2020) where
Malaysia strives to be a hub for biotechnology excellence. This is followed by mechanical engineering as the
second most common technical fields for PROs and RCs. In addition, Malaysia’s history as an agricultural
economy could explain why agriculture is one of the more common technical fields for these public research
institutions.
5 The seven priority areas were: a) research and technological capacity; b) research commercialization; c) human resource capacity; d) promotion of innovation culture; e)
institutional framework; f) technology absorption and diffusion; and g) specialization.
The budgetary pressure and strategic mandates implemented for public universities were continued
through the Mid-Term Review of the Eleventh Malaysia Plan (2016-2020). Though the budgets for
R&D in universities have slowly been increasing for the past few years, a large emphasis on universities
being financially sustainable was still being placed. Furthermore, the plan stated the necessity to address
the lack of coordination of R&D&C&I in Malaysia as well as the low and stagnant commercialization of R&D
output from PROs and public research universities. The plan introduced new strategies to align research
and innovation of the country through strengthening the management of research by PROs, intensifying
collaborative networks, especially with SMEs in Malaysia, as well as facilitating commercialization of domestic
R&D outputs (EPU, 2015).
Major reforms were also introduced to transform higher education institutions. The introduction of
the National Higher Education Strategic Plan (NHESP)6 in 2007 marked a major reform milestone for public
universities in Malaysia. The Ministry of Education then introduced the Malaysian Education Blueprint (Higher
Education) 2015-2025 (MEBHE), as the continuation of the NHESP. The government acknowledged the need
for governance reforms for higher education institutions (HEIs), especially with regards to their autonomy
and accountability in order to compete with top universities abroad (MOE, 2015).
A snapshot of the preceding discussion of the various policies and strategies is provided in Annex 2.
Overview of Malaysia’s National Research and

Development Capacity
R&D intensity in Malaysia has been increasing over the years with more than half of the overall
expenditure in R&D being done by the private sector. Prior to 2010, the GERD stood at 0.62 percent
of the national GDP. From 2010 onwards, the GERD increased to 1.12 percent of GDP. The latest statistics
from MASTIC reported that GERD in 2016 stood at 1.44 percent of the national GDP, inching closer to the
government’s target of achieving GERD of 2 percent of the national GDP. Overall, R&D is mainly done by
the business enterprises in the private sector as they account for more than half of the overall expenditure
on R&D in Malaysia, at 56.5 percent. It should be noted that business R&D also includes the expenditure
made by Government-linked companies (GLCs). This is followed by educational institutions, accounting for
34.2 percent of expenditures on R&D, while public research organizations account for 9.2 percent (Figure 2).
Malaysia’s research intensity is significantly higher than its regional peers, but a gap exists between Malaysia
and high-income comparator countries like Singapore, Japan, South Korea in the region and others such as
Germany, France and the US (Figure 3).
R&D in Malaysia is funded by two large sources: the government and business enterprises. 34.2 percent
of R&D activities are funded by the government whilst 56.5 percent are funded by business enterprises
(Figure 4).7 The remaining nine percent of R&D funding stems from other sources of funding that include
higher education institutions, foreign-owned organizations or other unspecified sources. The National
Policy on Science, Technology and Innovation 2013-2020 aimed to maintain a minimum R&D expenditure
ratio of 30:70 between the public sector and private sector. However, in the wake of the global financial
6 The plan was organized in 4 phases. Phase 1: Laying the foundation (2007-2010); Phase 2: Strengthening and enhancement (2011-2015); Phase 3: Excellence (2016-2020);
and Phase 4: Glory and sustainability (beyond 2020).
7 As mentioned before, the survey by MASTIC includes GLCs as part of Business Enterprises.
FIGURE 2: Proportion of R&D Expenditure FIGURE 3: International Comparison of R&D

by Sector and GERD (percentage of GDP) Intensity (GERD as a percentage of GDP)
90 1.6 5
80 1.4
70 4
R&D Expenditure Proportion
1.2
60
GERD (% of GDP)
1
3
50
0.8
40
0.6 2
30
0.4
20
1
10 0.2
0 0 0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Myanmar
Philippines
Indonesia
Vietnam
Malaysia
China
Singapore
France
USA
Germany
Japan
South Korea
Business Enterprises
Public Research Organizations
Higher Education Institutes
GERD
Source: National Survey of Research and Development (R&D) Source: UNESCO Institute for Statistics (UIS)
in Malaysia 2017
crisis, R&D expenditure from the private sector

FIGURE 4: Source of R&D Funds (2016) has drastically reduced. With the current ratio of
Others GERD between the public and private sectors at
9%
43:57 in 2016, Malaysia is still behind its intended
target. The figures would suggest that business
R&D which was at 71 percent of GERD in 2008
has seen difficulties to recover since the financial
crisis and that public efforts towards increasing
Government Business R&D capacity have been mostly focused on
34.2% Enterprises
56.5% the public sector. With a view to become more
resilient, the current COVID crisis would make it
even more important for firms to invest in R&D
and innovation. However, given the immense
cash flow constraints and production and supply
chain disruptions, investments in R&D and
Source: National Survey of Research and Development (R&D) in Malaysia 2017 innovation amongst businesses will likely see a
further decline.
The majority of research in Malaysia is focused on applied research, however not translating into high
levels of technology transfer and commercialization. In 2016, 56.5 percent of GERD was attributed to
applied research, followed by basic research (28.9 percent) and experimental development/research (14.6
percent). Over the years, there has been an increase in experimental development/research activities in
Malaysia, as well as in basic research. Experimental development/research grew from 7.5 percent in 2014 to
8.6 percent in 2015 and 14.6 percent of total GERD in 2016 whereas basic research grew from 16.9 percent
to 20.9 percent in 2015 and 28.9 percent of GERD in 2016 (Figure 5). Higher education institutions focus
on basic research. On the other hand, business enterprises and government research institutes frequently
engaged in applied research followed by experimental development/research, with a relatively lower focus
on basic research (Figure 6). While these are encouraging trends, we see later in the study that this high
expenditure on applied research does not translate into high levels of commercialization of research outputs
or technology transfer to industry.
This trend was reflected amongst the surveyed research organizations. The survey results showed
that the research orientation of RCs steers more towards basic research, followed by applied research. RCs
spend approximately 50 percent and 37 percent of R&D expenditure on basic research and applied research
respectively. In contrast, PROs’ main R&D activities lie in applied research and experimental development
and pre-production activities. On average, approximately 66 percent of R&D expenditure by PROs went to
applied research while 18 percent of R&D spending was on experimental development and pre-production
activities. Such patterns observed in the survey closely reflect the research orientation of the corresponding
entities found in the national surveys.
Over time, the total number of R&D staff has been increasing annually both in absolute and relative
terms reflecting increased government efforts in supporting human capital investment in R&D.
The number of R&D staff has been increasing, driven by the rapid growth of R&D personnel in HEIs and
business enterprises moving in tandem with R&D funding. The growth in the number of researchers has
contributed to the rapid increase in the number of researchers per 10,000 labor force, growing from 60.7
researchers per 10,000 labor force in 2014 to 74 in 2016 (Figure 7). In terms of the breakdown of researchers
by qualifications, 35.6 percent of researchers possess master’s degrees as their highest qualification, larger
than the proportion of researchers with PhDs at 31.9 percent. This is followed by researchers with bachelor’s
FIGURE 5: GERD by Research Orientation FIGURE 6: Research Orientation by Sectors

(2014-2016) (2016) - R&D Expenditure RM Millions
100% 8000
7.5 8.6
14.6
7000
80%
6000
5000
60% 56.5
75.5 70.5
4000
40% 3000
2000
20%
28.9 1000
16.9 20.9
0% 0
2014 2015 2016 Business Government Higher Education
Enterprises Research Institutes
Institutes
Basic Research Applied Research Basic Research Applied Research
Experimental Research Experimental Research
Source: National Survey of Research and Development (R&D) in Source: National Survey of Research and Development (R&D) in
Malaysia 2017 Malaysia 2017
degrees at 19.4 percent with the remainder attributed to researchers with other qualifications (apart from
PhD, master’s or bachelor’s degrees) (Figure 8). 71.4 percent of researchers (FTEs) work in higher education
institutions whereas 21.9 percent work in business enterprises with the remaining 6.6 percent working in
public research organizations (Figure 9).
FIGURE 7: R&D Staff by Functions (2014-2016)
160,000 74.0 80.0

136,683
140,000 70.0
Researcher per 10,000 Labor Force

60.7 145,740
120,000 60.0
61.9
Total Count
100,000 114,986 50.0
80,000 40.0
60,000 30.0
32,564
22,527
17,508
14,657
40,000 20.0
14,258
12,515
108,557
84,516
89,861
20,000 10.0
0 0.0
2014 2015 2016
Researcher Technician Support Staff Total R&D Personnel Researcher per 10,000 Labor Force
Source: National Survey of Research and Development (R&D) in Malaysia 2017
FIGURE 8: Proportion of Researchers FIGURE 9: Proportion of Researchers

by Qualification (2016) (FTE) by Sectors (2016)
40
35.6
35
31.9
30 Business
Enterprises
21.9%
25
Public
19.4 Research
20 Higher
Education Organizations
Institutes 6.6%
15 13.1 71.4%
10
0
PhD Masters Bachelors Others
Source: National Survey of Research and Development (R&D) in Source: National Survey of Research and Development (R&D) in
Malaysia 2017. Malaysia 2017.
There is a wide range of variation in the number of full-time research-active employees in the PROs
that were surveyed. The average number of full-time research-active employees in PROs is 268 employees,
with a median of 141 employees. The largest PRO that was interviewed, the Malaysian Palm Oil Board,
had a total number of employees of 2,531 employees while the smallest PRO interviewed had only 44
employees. The size of this PRO is understandable as it not only engages in research work but also oversees
the production and process of palm oil and its by-products in Malaysia. University RCs are relatively less
heterogeneous and function at a much smaller scale. The average number of research-active FTEs for
university RCs is 12 employees, with a median of 10 employees.
Research Output and Knowledge and Technology

Transfer Activities
Malaysia has seen rapid growth in scientific publications, yet not reflected in a simultaneous increase
in its quality. According to bibliometric data from Elsevier-Scopus (SCIMAGO, 2020), between 2008 and
2018, Malaysia increased its scientific output 4.5 times (Figure 10). Since 2009, this has been accompanied
by an increase in the share of international collaborations (Figure 11). However, the quality of research as
reflected in the citation impact index of scientific publications remains low in Malaysia as compared to high-
income economies (Figure 12). Furthermore, intellectual property outputs are largely produced by business
entities, followed by universities (Figure 13). Based on intellectual properties8 registered with the local IP
office in 2016, business entities account for approximately 60 percent of the total IP output, followed by
universities and PROs that accounted for approximately 31 percent and 8 percent of the total IPs respectively
(MASTIC, 2018).
A multitude of factors contribute to the success of technology transfer and commercialization of

R&D outputs including additional funding, external support and market demand among many others.
Though recent statistics have shown that the number of scientific outputs and intellectual properties have
been increasing, the dynamics of knowledge transfer and commercialization of the research outputs derived
are completely different. For instance, a marked issue pertaining to the success of commercialization is the
ability of PROs and universities to successfully commercialize technologies and IPs and generate income
in an efficient manner. Business enterprises seem to be able to overcome such issues better than their
counterparts as they tend to generate higher revenues through licensing and selling of IPs from a smaller
number of IPs generated (MASTIC, 2017).
The next section describes the results of the survey that are organized around the factors described
in the conceptual framework that enables knowledge and technology transfer from public research
institutions to industry. This is done with a view to better understand what factors enable and constrain
the levels of knowledge and technology transfer.
8 Intellectual outputs in this instance refers to patents filed, patents granted, copyrights, trademarks and industrial designs.
FIGURE 10: Evolution of Scientific FIGURE 11: Share of International

Production (Number of Peer-Reviewed Collaborations among Scientific
Publications) Publications
35,000 45
30,000
40
25,000
20,000
35
15,000
10,000
30
5,000
0 25
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
Singapore Thailand Philippines
Malaysia Indonesia
Source: SCIMAGO Indicators, 2020 Source: SCIMAGO Indicators, 2020
FIGURE 12: Quality of Science, the H-Index FIGURE 13: Distribution of Intellectual
and Average Citations per document, Peer- Property Outputs
reviewed Publications 1996-2018
1600 25 100%
1400
20 80%
1200
1000
15 60%
800
10 40%
600
400
5 20%
200
0 0 0%
Patents Filed
Patents
Granted
Copyrights
Trademarks
Industrial
Designs
Total
Myanmar
Cambodia
Viet Nam
Philippines
Malaysia
Chile
South Africa
Singapore
South Korea
Japan
Canada
United Kingdom
H-index Citations per document HEIs PROs BEs NGOs
Source: World Bank staff calculations based on National Survey of Research

Source: SCIMAGO Indicators, 2020 and Development (R&D) in Malaysia 2017.
CHAPTER 4
Assessment of
Enabling Factors
for Knowledge and
Technology Transfer
Chapter 4: Assessment of Enabling Factors for Knowledge and Technology Transfer
Governance and Performance Monitoring

The governance of research institutions determines the level of impact they have on industry and the
society. The degree to which research organizations support industry varies over time and across countries.
While generalizations are difficult, experiences of five leading PROs in Germany, Taiwan, Japan, Australia,
and the US show, for instance, that governance settings such as industry involvement in steering boards,
and the way institutions are funded (e.g. combining block funding with competitive and performance-based
funding) are key factors behind having institutions that successfully transfer knowledge and technology.
They are important for PROs to maintain research standards (Intarakumnerd and Goto, 2018), engage in
applied research and collaboration and receive industry funding. The governance of these institutions is
important to maintain such balances and strongly influences the way public research institutions engage in
research and interact with other actors in the innovation system.
PROs in Malaysia operate in a much more complex and irregular landscape compared to HEIs, varying
in a wide range of institutional forms and governance structures, size, resources and performance.
The PROs in Malaysia are under the purview of different ministries, ranging from the Ministry of Science,
Technology and Innovation (MOSTI) to the Ministry of International Trade and Industry (MITI). Each PRO
may even be categorized into different categories of governance structures with their autonomy subject
to their status (see Box 1). The PROs can be categorized as: a ministry division, a statutory body/PRO
or corporation/company limited by guarantee. Statutory PROs are created by an act of the Malaysian
parliament (e.g. the Forest Research Institute of Malaysia Act of 2016 or the MARDI Act of 1969). On the
other hand, corporations/companies limited by guarantee are government-owned corporations governed
by the Company Act of 2016.
The complex landscape of PROs in Malaysia with differences in legal status, mandates and modes of
operations effectively bring about different approaches to R&D and innovative activities. This results
in different levels of technological productivity which in turn affect the levels of knowledge transfer and new
technological developments from PROs to industry and society. There are noteworthy examples of PROs
with meaningful impact in various sectors and industries. As a PRO that was originally under a ministerial
department, MIMOS was corporatized in 1996 and is one of the institutions in Malaysia that is at the forefront
of high-tech R&D. Their focus lies in information and communications technology, industrial electronics and
semiconductor technology. MIMOS has developed their own research approach where they largely focus
on producing high-quality R&D outputs and getting them into the market. MIMOS has seen some success
in the production of intellectual properties as it was ranked the top out of all IP filers in Malaysia in 2017
and ranked high amongst PCT patent filings. The Institute for Medical Research (IMR) and the Malaysian
Genomics Institute (MGI) are two public research organizations at the front-line of the fight against COVID-19
(see Box 2 for details).
BOX 2
Roles of PROs in a Time of Crisis:

Responses to the COVID-19 Crisis
What started as a localized epidemic drastically transformed into an international public
health crisis worldwide. Through the actions and protocols imposed by the Government
of Malaysia, they have managed to contain the spread of the deadly virus. The Institute for
Medical Research (IMR) and the Malaysian Genomics Institute (MGI) are two of the few public
research organizations that are at the front-line of the fight against COVID-19. Both institutions
are involved in testing and screening for COVID-19. Beyond testing, both institutions are
involved in extensive research on the virus. IMR is undertaking research on the virus’ hosts,
environment, epidemiology. It is also validating the commercial testing kits before they are
introduced into the Malaysian market to ensure specificity and sensitivity in the detection of
the virus. IMR will also be conducting two research projects for potential vaccines. The IMR is
currently conducting research on developing rapid diagnostic kits for detection of COVID-19
virus. Besides that, a research on some herbal formulations is on-going to determine the effect
of these herbal formulations on COVID-19 virus. Concurrently, MGI is focused on conducting
genome sequencing of COVID-19. MGI is also designing structure-based drugs to target

infectious disease, synthetic biology, protein expression and purification as well as developing
compound data sheet for bioproducts where these activities are interrelated for new treatment
discovery.
Both institutions are engaging and collaborating with a multitude of external stakeholders.
IMR is collaborating with local public universities such as UPM and UM Medical Center, other
public research organizations such as MGI as well as local pharmaceutical companies whilst
receiving support and guidance from the World Health Organization (WHO). MGI has started to
actively collaborate with institutions such as the Sungai Buloh Public Health Laboratory (provider
of the virus sample) and with two local universities (UKM and UMS) for bioinformatics analysis.
At the same time, potential bioproduct screenings to contain the propagation of COVID-19 are
being conducted by collaborating with two local companies for product testing. Additional
support by the federal government and ministerial bodies, as part of the fiscal support package
introduced, was helpful for both IMR and MGI. With the additional support, IMR was able
to increase its operational capacity through the procurement of additional equipment and
consumables, paying additional staff remuneration, and establishing a COVID-19 laboratory
within the National Institutes of Health. Using automated systems, it was able to scale up testing
and have faster detection times. Additionally, the fiscal support allowed MGI to conduct more
screening activities, to provide additional technical support to public health labs, to procure
additional personal protective equipment and obtain logistical support.
Some commendable achievements can be attributed to these public research organizations.

At IMR alone, the testing capacities have increased from 850-1,200 tests per day within the
March and April to about 3,000-5,000 tests per day in May. Furthermore, IMR was able to
develop its own in-house reverse transcription polymerase chain reaction (RT-PCR) testing
technique before the WHO developed the detection protocol, using it to detect the first few
cases that entered Malaysia from Singapore in February. As a preparation for the impending
outbreak, IMR trained 12 major hospitals, 5 public health laboratories as well and private and
university hospitals on the RT-PCR method. Quality controls are also undertaken for the hospitals
as they are required to send positive and negative samples to IMR for verification. Additionally,
MGI has successfully sequenced 12 genome samples and 6 genome data has been analyzed
and uploaded to the GISAID database where each analyzed genome is successfully clustered
according to its specific strain and origin so far. The IMR has also sequenced 36 COVID-19 virus
genomes and the data has been uploaded to the GISAID database. Furthermore, MGI plans
to initiate screening work for safe potential bioproducts with antiviral properties to provide
preventive measures for the public while waiting for pure drugs and vaccines to be available.
The emergency situation brought about by the COVID-19 pandemic threw many obstacles
and challenges in the direction of the research organizations but nonetheless, a multitude of
administrative procedures were put in place in order for them to respond to the crisis effectively.
Source: Based on discussions with representatives of IMR and MGI (data and information as of June 2020).
Governance: Institutional Funding and Levels of Autonomy
Management and funding of PROs are stipulated in their respective acts while that of RCs is governed
to a large extent by the University they are affiliated to. PROs are usually governed by an independent
board of trustees, though funding may come from various sources. Statutory PROs are typically more
autonomous than ministry division PROs, but both are subject to employee policies and practices set forth
by the Public Service Department (NSRC, 2013). In contrast, corporations/companies limited by guarantee
typically have the greatest autonomy among the other types of PROs as they are not subjected to some of
the policies set forth by the Public Service Department (ibid.). Most of the surveyed PROs reported to have
a steering or trust board (or Council) for the definition of strategic goals and plans for research activities.
The only two who did not have a steering or trust board were both government agencies reporting directly
to a ministry or department. Encouragingly, all except for one of the PROs reported to have a steering or
trust board and have industry representatives as part of their board or council that met frequently (more
than three times a year). On the other hand, all the surveyed university RCs reported to not have a trust
board, given that the RCs fall under the purview of their respective universities who have their own boards
with representatives from various fields and industries. However, some RCs reported that they formerly had
a trust board with some industry representation, but those were recently disbanded due to their perceived
lack of effectiveness and the high costs associated with maintaining a board.
Sources of funding to a large extent can determine the strategic focus of research organizations. In
developed countries, autonomy has been key for PROs and HEIs to deploy their own institutional policies
regarding major strategic decisions (Zuniga, 2020). These include recruitment procedures, criteria for career
promotion, rules regarding IPR creation and technology commercialization and the setting-up of support
programs for knowledge transfer and commercialization (ibid.). However, given their role in the national
innovation ecosystem, they require their institutional strategies to be aligned to the national policies for
research and innovation. This compliance can be promoted through funding mechanisms in both institutional
and project-level and through institutional performance assessments.
The survey results concerning the levels of autonomy and sources of institutional funding were mixed.
The breakdown of the sources of funding based on expenditures in 2018 suggest that PROs largely depend
on their own revenue generation and government budgets (Figure 14). However, the large dependence of
funding through the generation of own revenues is skewed by a small number of PROs. For instance, the
PROs that are also governing boards to primary commodities such as palm and rubber are “cess” funded.
Therefore, examining the average sources of funding indicate a heavy reliance on government budgets
among PROs9 (Figure 15).
R&D funding for PROs mainly comes directly from the national government. Funding from local or state
governments for R&D expenditures in PROs is minimal. However, some PROs reported that 100 percent of
their R&D funding came from the national government whereas some PROs report that most of their R&D
funding came from their own sources, which, on aggregate, is the second largest funding source. This again
is attributed to the different structures of the PROs in question where some PROs are able to generate their
own revenues. This is largely true of corporatized PROs or companies limited by guarantee such as MIMOS
and MARii respectively. Private sector contribution to R&D funding on average however is less than 10
percent of total R&D funding (Figure 15).
9 The sources of funding based on total expenditure (Figure 14) is calculated using weighted averages where the weights are based on the total expenditure of each
institution and proportion of each funding. The average sources of funding (Figure 15) is calculated by averaging the proportion of funding. The averages are calculated
based on the averages of the proportion. For example, the average for national government PROs is just the average of the proportions from all the PROs. This is done to
highlight the existing discrepancies between the PROs and the numbers should not be generalized.
FIGURE 14: Sources of Funding, FIGURE 15: Average Sources of Funding

Proportion of Total Expenditure in 2018 for PROs and RCs
60% 70%
50% 60%
50%
40%
40%
30%
30%
20%
20%
10% 10%
0% 0%
Own Revenues
Private Contributions
Other Public
Organizations
Other Sources
Budget from the
Government/University
Own Revenues
Private Contributions
Other Public
Organizations
Other Sources
Budget from the

Government/University
PROs RCs PROs RCs
Source: Based on World Bank Survey for Technology Transfer Activities Source: Based on World Bank Survey for Technology Transfer Activities
results, 2019-20. results, 2019-20.
For RCs, a large proportion of their funding comes from their respective universities as well as private
contributions. A small number of RCs were able to partner up with private companies and obtain a substantial
amount of funding. In particular, two RCs skewed the data towards private contributions as the source of
funding for RCs. While budgets from universities are a major source of funding for RCs (Figure 14), some
centers reported that they were only given funding to establish the centers or for operational expenditures
and would have to rely on other sources of funding for other expenditures. RCs collect their own revenues
mainly through the provision of certain services whilst private contributions are mainly from collaborations
with companies. Other sources of financing usually come in the form of external grants. Assessing the
average proportions of the funding sources however, (Figure 15) shows a slightly different picture with
budgets from government and/ or universities being the largest source of funding for RCs as well.
Similar to PROs, a large number of RCs receive funding for R&D from government grants and funding
programs (Figures 16 and 17). At the same time, RCs actively engage with private entities in some research
projects. However, less than 2 percent of funds are from own sources - such as commercialization revenues
or conducting external services. The share of private funding in R&D is relatively important (Figure 17).
RCs actively engage with private entities in some research projects. 37.7 percent of total R&D executed
in 2018 came from private sources of funding; mostly stemming from RCs that are actively engaged with
the private sector. University funding has been decreasing every year as the government tries to increase
university autonomy and make them financially self-sustainable. Increasingly, universities are looking for
complementary sources of funding and further engage with the private sector. This trend would be reflective
of the objectives laid out in the Malaysian Education Blueprint (Higher Education) 2015-2025 discussed
earlier.
FIGURE 16: R&D Funding Sources for PROs FIGURE 17: R&D Funding Sources for RCs
Based on Total R&D Expenditure in 2018 Based on Total R&D Expenditure in 2018
1.50% 4.31%
3.14% 1.29%
27.99%
33.27%
37.67%
55.11%
28.36%
6.98%
Local governments National government University directly National government

Private sector Own sources Private sector Own sources
Rest of the world Rest of the world
Level of Autonomy through Governance Structures
Enhancing the autonomy of HEIs has been a proposed strategy from the Government to reduce the
dependence of HEIs on government financing. Autonomy allows higher education institutions to deploy
their own institutional policies regarding major decisions such as recruitment procedures and criteria for
career promotion, rules regarding IPR creation and technology commercialization (Zuniga, 2020). The
Ministry of Education would grant public HEIs the status of autonomous or semi-autonomous based on
each HEI’s readiness and capacity for decision making; a merit-based approach dependent on institutional
performance and governance achievements (Wan, 2017; OECD, 2016). Presently, there are 20 public
universities in Malaysia with the Ministry of Higher Education (MoHE) structuring them into three different
categories; research universities (RUs), focused universities and comprehensive universities. There are
currently five public research universities.10 However, it is hard to tell if any major improvements in operations,
management or financial sustainability were achieved (OECD, 2016). At the same time, the autonomous
status assigned to the universities has not been accompanied by significant amendments to the structure of
HEIs, as some operations may still closely adhere to the governance framework of the civil service (Taib &
Ng, 2015; Wan 2017).
The degrees of autonomy vary in PROs, while RCs within universities are mostly dependent on
university policies. In order to gauge the autonomy of PROs and university RCs, the surveyed institutions
were asked if they were legally autonomous entities. All responses showed that they were all not legally
autonomous except for PROs that were either corporatized or were companies limited by guarantee from
the government (four of the ten PROs that were surveyed claimed they were autonomous). While not being
legally autonomous, an assessment into the level of autonomy in various aspects of operations was further
conducted. University RCs possess a varying degree of autonomy. Setting salaries and tuition fees are done
10 Detailed explanation of the university structures can be found in Box 1: Public Research Institutions in Malaysia.
solely by the Ministry of Education. The RCs can only exercise some autonomy by setting salaries for contract
staff such as research assistants. Similarly, they can only suggest the level of tuition fees to set to reflect the
resources required for the degree programs offered by the RC, with the final decision being made by the
university. The highest level of autonomy given to RCs is their ability to set their own research objectives
(Figure 18). This would be what one would expect, as each RC was set up to specialize in their own fields and
niches where they are largely allowed to exercise autonomy in the research they conduct. For the most part,
larger RCs such as HiCoEs or CoEs tend to have a slightly larger degree of autonomy compared to RCs that
are smaller or directly under a specific faculty. While it may be true that the universities can exercise a larger
degree of autonomy than before, the RCs within the universities as one would expect, are still only partly
autonomous, being mostly dependent on the university policies.
PROs on the other hand tend to be able to exercise a certain degree of autonomy in their day to day
operations and management. For the most part, salaries are largely determined by the line ministries where
some PROs may suggest salary ranges for staff to the respective governing ministries for their approval. A larger
degree of autonomy is given to PROs when hiring research staff where some PROs are able to hire research
staff independently and most PROs are able to hire contract staff independently. Similarly, the definition
of institutional policies and strategic plans are for the most part, partly autonomous. PROs are required
to adhere to some requirements on institutional policies and strategic plans in line with their respective
ministries. In other aspects such as internal allocation of budget and setting research objectives, PROs are
mostly autonomous to a certain degree (Figure 19). For example, most PROs are able to independently
allocate internal budget, with approvals from their governing bodies required from time to time for certain
expenditures. At the same time, they are largely able to independently set research objectives but would
have to be in line with the research direction and objectives laid out in the national agenda on STI and R&D.
Additionally, corporatized PROs or companies limited by guarantee such as MIMOS and MARii respectively
tend to have more autonomy as they have a larger percentage of independent activities compared to other
types of PROs. As highlighted above, this underscores the relationship between institutional funding sources
and the degree of autonomy that institutions have.
FIGURE 18: Percentage of Respondents by FIGURE 19: Percentage of Respondents by

Level of Autonomy Practice in Strategic Level of Autonomy Practice in Strategic
Decisions for RCs Decisions for PROs
100% 100%
80% 80%
60% 60%
40% 40%
20% 20%
0% 0%
Setting research
objectives
Institutional
policies and plans
Operational
management
Internal budget
allocation
Setting services
fees
Revenue
generation
Setting
structures
Setting tuition
fees
Setting salaries
Internal budget
allocation
Operational
management
Setting research
objectives
Setting services
fees
Revenue
generation
Institutional
Policies
Setting salaries
Hiring staff
Hiring research
staff
Decisions Made by Central Authority Decisions Made by Central Authority

Partly Autonomous Partly Autonomous
Fully Autonomous Fully Autonomous
Monitoring, Evaluation and Performance Management
Performance-based funding, where a portion of the agency budget is allocated according to specific
performance target measures, is another way to incentivize greater industry-research links and
knowledge transfer. Performance-based agreements are a growing mechanism for funding in higher
education institutions in developed countries (OECD, 2018).11 These contracts set performance goals and, in
most cases, bind a share of their block funding allocation to reaching those targets (ibid.). Such contracts can
stimulate knowledge transfer by including not only traditional targets related to teaching and research, but
also other targets associated with engagement with firms and the commercialization of their research results.
All the surveyed institutions (PROs and RCs) responded to having institutional funding linked to some
form of performance measures or indicators. Most PROs are funded through a combination of different
institutional funding where a large combination stems from direct institutional funding based on some
basic performance indicators and performance-based funding on an annual basis through national funding
agencies or ministries.12 Certain PROs are also subjected to performance-based multi-year agreements such
as funding allocation from the Malaysian National Plans. For instance, certain funding for the PROs would
depend on them meeting some of the performance requirements set within the time frame of the Malaysian
National Plans every five years. These trends imply a move towards some form of performance-based funding
mechanism in PROs. Similarly, some RCs are also funded through a combination of institutional funding
where they are subject to some basic performance measures or performance-based funding that they may
have obtained through a multitude of research grants. High performing RCs are further incentivized to meet
performance measurements in order to apply to become HICoEs, an elevated status that allows them to
receive additional funding from the MoHE.
Both PROs and RCs are subject to monitoring and evaluation. PROs are subject to monitoring and
evaluation by their governing ministries or a central governing body. Part of the monitoring and evaluation
process would be used to assess the performance of the PRO and inform the funding levels for the next
period. Some PROs reported that their performance is assessed and compared against targets set by the
government in the national policies, Malaysian National Plans, based on which budget allocations are made.
On the other hand, university RCs would have to report their performance to their respective universities
which in turn report to the MoHE. Performance evaluations are also conducted by the universities as well as
the ministerial bodies. Performance monitoring and evaluation is of paramount significance for RCs as they
are a large determining factor in securing grants or other funding that they heavily rely on.
While being subject to performance monitoring and evaluation, some surveyed PROs and RCs struggle
to have a long-term strategic research plan, especially pertaining to their long-term investment
strategies. Some surveyed institutions reported difficulties in defining performance goals or long-term
research plans, with lack of consistency in funding being cited as a problem. Uncertainty with regards to
funding levels as well as vacillating goals and strategies set forth by government policies jeopardizes the
research continuity resulting in a degree of short-sightedness on research and development plans for some
PROs and RCs (see Box 3 for details). The majority of surveyed PROs (9 out of 10 surveyed PROs) have defined
institutional strategies or plans for research activities, technology transfer and entrepreneurship activities.
Similarly, all but two of the PROs have an institutional strategy or plan for technology transfer activities
and/or entrepreneurship. The same thing can be said for RCs in terms of institutional plans or strategies
11 A recent estimate by OECD (2018) indicates that about 60% of universities in OECD countries have adopted this funding mechanism.
12 Performance-based funding is a system based on allocating a portion of a state’s budget according to specific performance measures such as knowledge transfer,
IP generated, industry collaborations or others. Recent trends from higher-income OECD countries have seen shift from direct government or block funding towards
performance-based funding through performance-based block funding to formal performance-based agreements, research excellence initiatives or project specific
funding. The aforementioned funding instruments grows in intensity and granularity in competition for funding. For a more detailed study, refer to OECD (2018).
for research activities, but 5 RCs have not defined an institutional strategy or plan for technology transfer
activities and/or entrepreneurship. Furthermore, only half of the surveyed RCs have institutional strategies
or plans for higher education within their centers, solely relying on those designed at the university level.
Research Capacity, Policy and Technology Transfer

Research Policy and Capacity
The available research capacity and policies of the research institutions can help explain the
institutions’ capacity and capabilities to carry out high-impact research and development activities.
The priorities set for research at the institutional/internal level are mostly consistent with the needs and
priorities at the national level. For PROs, the most prioritized research funding programs are those with
specific priority areas as they play a significant role in shaping industry demands and addressing some of
the targets of the governments. This is followed by funding for research infrastructure and challenge or
problem-solving research funding programs. RCs’ main priority for research programs lies in programs that
fund advanced human capital formation. They are crucial for the human capital development at the national
level as well as the institutional level where the RCs can also directly benefit from. This is followed by funding
programs for research infrastructure.
There is a large degree of fluctuation seen in R&D expenditures amongst the surveyed institutions. On
average, R&D expenditures for surveyed PROs have been slowly reducing from 2016 to 2018. However, there is a
large variation seen in these trends. Some PROs exhibited marked increases in R&D expenditure from one year to
another while others saw drastic reductions in their R&D expenditures. For instance, one PRO’s R&D expenditure
reduced by approximately 90 percent from 2016 to 2018 whereas another PRO experienced a 25 percent
increase in overall R&D expenditure within the same time frame. At the same time, only a handful of PROs
experienced stable R&D expenditure from one year to another. RCs’ expenditures on the other hand have
seen a slight increase in the average R&D expenditure from 2016 to 2018. However, similar to PROs, there
was a large degree of heterogeneity amongst surveyed RCs. Some RCs experienced a drastic increase within
the time frame as they received large funding for newly established projects with external stakeholders
such as multinational companies. On the other hand, some RCs experienced stagnant or decreasing R&D
expenditures.13
The large fluctuations in R&D expenditure could, to a large extent, be attributed to uncertainties
around R&D funding that were discussed in the previous section. For one, government policies and goals
such as the Malaysian National Plans, its reviews and other policy documents introduced have a significant
influence over the R&D funding for public research institutions. Furthermore, these policies and plans may
add to the multitude of funding sources for R&D where varying plans or policies may introduce new funding
mechanisms with some targeting specific sectors, fields, topics or organizations. Though well-intentioned, the
various policies designed and the consequent lack of a coordinated national strategy on R&D and innovation
lead to funding and institutional challenges for these research institutions. The uncertainty and inconsistency
in funding create an environment where activities around technology transfer and commercialization cannot
be carried out due to several factors such as the lack of a long-term investment horizon or the fact that
these activities are lower down in the priority for these institutions due to the incentive systems which are
discussed later on in the study.
13 To account for the differences in sizes of PROs and RCs, R&D expenditure per research staff was assessed and similar patterns of fluctuations were observed.
BOX 3
Complex Landscape of R&D Funding

and Policy Agencies in Malaysia
Numerous agencies, organizations and bodies play a role in R&D funding, programs and policies in
Malaysia. Combined with the heterogenous nature of research and innovation actors in Malaysia, it
creates a complex and at times confusing landscape for said actors to set priorities and coordinate both
at the level of institutions and at the strategic and policy objective level.
PROs can receive funding from a variety of sources. For instance, a PRO could be under the purview of
the Ministry of Agriculture that provides it with institutional funding but may also receive grants from other
ministries. For instance, in this case it could receive funding from the MoHE through the Fundamental
Research Grant Scheme or a grant from ScienceFund from MOSTI. Furthermore, the PRO may also receive
funding assistance for commercialization from different government agencies as well. The classifications
and the main objective of the PRO creates an additional level of complexity in the relationships that
exist between PROs and other government organizations with some PROs that are corporatized, or
companies limited by guarantee able to generate revenues through different means. PROs would mostly
receive funding and guidance from MOSTI whereas some PROs, that are ministerial bodies, would be
more closely tied to their respective ministries.
This is also the case for Universities to a large extent. R&D funding in universities can come
from a variety of sources and with varied university funding structures. The classification of Research
Universities would imply different funding opportunities for R&D, and this is similarly applied to university
RCs especially for those classified as HICoE and CoE. However, most of the funding for R&D conducted
in universities would come from MoHE and researchers or scientists may still be beneficiaries of funding
programs provided by different agencies.
National goals proposed and tabled through numerous different policy documents, such
as the Malaysian Plans and separate policy documents for different ministries, all play
a role in the public R&D environment of Malaysia. Each of the various ministries involved in R&D
policies provide varying levels of policy advice and direction. It was reported that the actors of R&D
and innovation receive multiple and often conflicting directions from the various funding bodies and
policy implementers. It also sets on them varying expectations that makes it difficult for a consistent set
of R&D strategic policies and priorities for PROs and universities. This does not only affect the general
policy landscape in Malaysia, but it also affects the research output and effectiveness of the PROs and
universities including their ability to provide research that is relevant to the industry and society.
“Multiple R&D funding and policy agencies means that PRAs [PROs and universities] get
multiple, often conflicting directions from a variety of funding and policy “masters”. It
also helps to explain the rapidly growing and varying expectations placed upon these
institutions.”
Source: Adapted from NSRC (2013)
Technology Transfer Policies and Incentives
In general, the Malaysian intellectual property system is a mature system and the IP policy covers a
range of institutions including PROs as well as government-linked companies. Malaysia’s established IP
laws cover a large range of IPs and Malaysia is a member of a multitude of different international agreements,
conventions and treaties. Apart from the general IP laws in the country, Malaysia adopted the Intellectual
Property Commercialization Policy for Research & Development Projects funded by the Government of
Malaysia in 2009, which is the main policy framework for IPR ownership and commercialization at public
research institutions. The policy states institutions that produce research are entitled to ownership rights (of
varying degrees) over inventions when the R&D projects are funded by the government. This policy covers
a range of institutions including PROs as well as government-linked companies (GLCs). It intends to promote
management and commercialization of research output at PROs and public universities, similar to the Bayh-
Dole Act in the US.
The national intellectual property and technology transfer system of Malaysia is best described as
one of the multiple institutions that implement separate policies aimed at incentivizing the adoption
and use of IP.14 The National Intellectual Property Policy (NIPP) Action Council and the National IP Steering
and Monitoring Committees: the co-ordination bodies for IP policy under the auspices of the Ministry of
International Trade and Industry (MITI) focus mainly on legal, administrative and enforcement matters, as
well as the international dimensions of IP policy. The Intellectual Property Corporation of Malaysia (MyIPO)
deals with legal and administrative matters related to IP rights. However, MyIPO does not have the capacity
or the mandate to anchor an agenda aimed at strengthening the contributions of IP policy to national
innovation performance. Although diversity allows for policy experimentation, initiatives can benefit from
greater coordination.
Ownerships of IP in Malaysia that are publicly funded are considered over seven differing scenarios.
These scenarios account for government ownership, university ownership and co-ownership with third-party
amongst other scenarios. It also includes government incentives for the inventors in the form of payments
with varying amounts for patent disclosure, filing of patent and grant of patent in the form of payments,
specifically for publicly funded IP creations.15 Employers are also required to share revenues collected from
the respective IPs with researchers adhering to a specific distribution table (Annex 3). Governed by the
aforementioned policy, ownership of intellectual properties that are generated through publicly funded
means are generally vested in the institution, i.e. the PRO itself or the university, whilst inventors are credited
for their inventions or discoveries. When intellectual properties are generated through privately funded
means (or through third parties), the intellectual properties would be jointly owned by the research institution
(PROs or university) as well as the funding organization. This in turn, largely depends on the contractual
agreement between the funding organization or business and the research institution itself.
The Government’s policies have created incentives to increase IP commercialization and technology
transfer in research institutions. As discussed earlier, the Malaysian government has instituted policies
that require HEIs and PROs to generate a share of their own revenue. These policies have created incentives
to increase IP commercialization and technology transfer in academia. Researchers from universities are
allowed to take sabbaticals if they want to engage in spinoff companies and receive more than five percent
of the equity from such an engagement (OECD, 2015). Awarding a high proportion of royalty returns to
14 OECD (2015)
15 The values are MYR500, MYR5,000 and MYR10,000 respectively.
researchers has also been implemented to support commercialization efforts. While many institutions have
gained valuable experience in obtaining IP rights, this has not rendered the desired results with regards to
commercialization activities.
While both PROs and RCs have incentives to increase technology transfer and commercialization,
they are not very effective. University RCs strictly adhere to intellectual property policies and technology
transfer policies of the respective university. These policies follow the directives and rules contained in the
Intellectual Property Commercialization Policy for R&D Projects Funded by the Government of Malaysia.
PROs have their own intellectual property policies closely based on the national policy. The research and
academic incentives to engage in technology transfer activities differ between PROs and University RCs
(Figures 20 & 21). The legal nature of PROs precludes the employees from creating any start-ups or spinoffs
or gain any equity over the research outputs they have generated within the institution. In addition to IP
policy, patent management issues are also important to enable technology transfer. Some PROs alluded to
having difficulties around revenues/royalty’s distribution. As a result, certain cases saw some marketable
inventions being shelved and not commercialized. It was also reported that patent or IP screening were
difficult to conduct. Further, secondment opportunities are also limited within PROs. Analysis of the data
shows that only a small number of researchers and scientists have utilized secondment opportunities to
work with industry which further discourages the creation of more formal linkages and networking with
industry. The response across the university RCs are more homogenous (Figure 21). Most of the listed
incentives are provided by the university to which the RC is affiliated to and implemented through their
research management or technology transfer units. Furthermore, whilst most research funding policies and
strategies available in Malaysia are in line with modern research systems, our survey results show that there
is a difference in the use of such policies between the university RCs and PROs with the former being more
involved as beneficiaries.
FIGURE 20: Availability of Research and FIGURE 21: Availability of Research and
Academic Incentives for PROs Academic Incentives for RCs
Recognition in Performance… Public Recognition/Rewards
Funding of Research and… Performance Recognition
Assistance in IP Protection… IP Protection and…
Grants for IP Protection Costs Research and TT Projects…
Public Recognition/Rewards Equity participation
Financial rewards Secondment Opportunities
Secondment Opportunities IP Protection Grants
Equity participation Start-up/Spin-off Assistance
Assistance with a Start-… Financial rewards
Equity Funding for Spinoffs Equity Funding for Spinoffs
0% 50% 100% 0% 50% 100%
Yes No Don't know/not relevant Yes No Don't know/not relevant
results, 2019-20. results, 2019-20
For PROs, the most prioritized technology transfer policy and funding program is the support for
translational research and product development. A large number of PROs conduct research work that
benefits external stakeholders in the nation through a variety of avenues. As they aim to expand their activities
in these areas, wider availability of funding support for translational research and product development is
prioritized by the PROs, yet they lack adequate support in these areas. This is followed by funding support
for proof of concept. Some PROs reported that there is a lack of support and funding to conduct technology
evaluation that can make an impact in the intended market. This commonly cited problem exacerbates
the challenge of the lack of demand-driven research outputs or products generated by public research
institutions.
The slow rate of adoption of new knowledge and technologies stifles the benefits from technology
extension services. Support for technology extension is widely available in Malaysia through various programs
for SMEs to adopt new technology and utilize extension services. However, a common issue faced by PROs
is the deficiency and the slow rate of Malaysian SMEs in adopting new knowledge or technologies, which
ultimately hampers the diffusion of outputs and services from PROs. Therefore, the support of technology
extension, in terms of establishment and implementation of policy, is important to enable businesses to
build capabilities of adopting new knowledge and technologies.16
University RCs follow similar patterns in the priority areas of technology transfer policies as PROs.
RCs prioritized funding support for proof of concept because highly frictional connections between
universities and industries makes it harder to evaluate outputs or technology that they want to transfer. With
similar reasons to PROs, funding support is also needed for translational research and product development.
Besides that, RCs prioritized technology extension support programs as their desire to extend research
outputs to the masses is faced with many technology extension constraints. Like PROs, constraints originate
from both the demand and the supply sides. On the demand side, some businesses have trouble adapting
the research output or new technologies to their needs. Hence, requiring RCs to prioritize technology
extension support. On the supply side, research is not always tailored to the industry needs.
These priorities for the research institutions to a large extent mirror the funding support they have
received to facilitate technology transfer. All interviewed PROs have been awarded funding for proof of
concepts and for translational research and product development. They also receive funding for technology
support programs to some extent. However, funding for startup creation, incubation or support for TTOs
are rather limited as PROs do not generally engage in activities to establish their own startups or spinoffs. At
the same time, the support to TTOs and science and technology parks are also rather limited as only a small
number of PROs interviewed were involved in such activities. RCs benefit the most from funding support to
translational research and product development.
Technology Transfer Support
Technology transfer support for PROs is rather mixed. Only some PROs reported having a dedicated TTO.
Three of the ten surveyed PROs reported to not having a technology transfer office. PROs without a dedicated
TTO reported that research management as well as oversight of technology transfer support are largely
handled by different departments within the PRO, including corporate, legal and financial departments. On
average, TTOs across the surveyed PROs have nine staff. Out of those staff in the TTOs, an average of three
16 The Sirim-Fraunhofer program in Malaysia was designed to fill this gap with the target group being SMEs. However, the program does need to have a wider coverage
and help adopt simple technologies to improve productivity.
staff members have industry experience. A large number of TTOs in PROs are reported to be understaffed.
This is such as some TTOs do not have staff possessing industry experience or experience with law or
commerce. Instead, some of the researchers or scientists are involved in trying to commercialize research
outputs. All the surveyed university RCs reported that the university they were affiliated to had a dedicated
research management unit as well as technology transfer offices to support research commercialization and
technology transfer activities within each university. As such, RCs did not consider it necessary to have their
own dedicated technology transfer office.
Analyzing the services prioritized by PROs and those provided by the TTOs suggest a need for greater
expertise and capacity building in TTOs. The support provided by technology transfer offices for each
PRO varied (Figure 22). PROs with dedicated TTOs are provided with support for negotiating legal work
for research and licensing contracts, searching for partners and networking as well as managing material
transfers and confidentiality agreements. As mentioned earlier, support for the creation of spin-offs or
startups are not provided to the PROs. At the same time, about half of the TTOs provide support to assess
the value of new technologies, patentability of inventions, assistance in IP protection and management and
provision of pre-seed funding and technology packaging. For PROs, the priorities for technology transfer
support are rather varied (Figure 23). The main priority for technology transfer support lies in assessing the
value of new technologies. This is crucial for PROs as it allows them to assess their incentives to venture into
R&D for a specific product or technology. These results suggest that there is still a need for strengthening
expertise and capacity building of TTOs in PROs. In particular, support is needed for assessing the value of
technologies and the patentability of inventions. Better links with outside startup support services are also
required in both PROs and University TTOs.
The priority areas for RCs towards technology transfer support lies in searching for partners and
networking with industry and other agencies (Figure 24). Even though some RCs engage with industries
through collaboration, they believe searching for partners and networking with industry and other agencies
could strengthen linkages with industry that would facilitate demand-driven research and technology transfer
FIGURE 22: Support by Technology Transfer Offices for PROs
Managing material transfer or confidentiality agreements
Negotiating and conducting legal work for research contracts
Negotiating and conducting legal work for licensing contracts
Searching partners, networking with industry and other agencies
Registering of other forms of intellectual property rights
Funding regarding technology packaging and pre-seed funding
Assessing the value of new technologies
Assessing the patentability of inventions
Assistance in Intellectual Property protection and management
Assisting in the creation of spin-offs/startups
0 1 2 3 4 5 6 7
Provided within Institution Not Provided within Institution
Source: Based on World Bank Survey for Technology Transfer Activities results, 2019-20.
capabilities. The second priority for technology transfer support for RCs is funding regarding technology
packaging and pre-seed funding. Focus is given to pre-seed funding for newly developed technologies or
research output. This is closely followed by assistance in the creation of spin-offs or startups. RCs believe
that having a platform such as a startup or spin-off would allow for better dissemination of research output
and commercialization but their experiences with establishing spin-offs or startups for their research outputs
have been limited.
FIGURE 23: Technology Transfer Support Priority Areas for PROs
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
First Priority Second Priority Third Priority Not a Priority
FIGURE 24: Technology Transfer Support Priority Areas for RCs
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
First Priority Second Priority Third Priority Not a Priority
Research Outputs, Knowledge Transfer and

Technology Transfer from surveyed PROs and RCs
Encouragingly, collaborative research projects with industries are commonly conducted by surveyed
PROs and RCs. Knowledge transfer activities included collaborative projects or staffs’ involvement
in industries. Technology transfer activities included technology services, contract research and
commercialization of IPs. The data for such activities was collected from the surveyed institutions for the
period of 2015 until 2018. Looking at knowledge transfer activities conducted by both PROs and RCs from
2017-2018, collaborative research projects with industries are commonly conducted by both types of entities
(Figure 25). PROs also actively engage with collaborative research projects with other public research or
governmental organizations as well as foreign institutions. However, only a small number of PROs have staff
engagements with industries through sabbaticals or secondments of staff to industry as such opportunities
seem to be limited.
A larger proportion of RCs compared to PROs were able to engage in knowledge transfer activities that
involved staff mobility. Both PROs and RCs were also able to attract industry staff and foreign researchers
to conduct research at their institutions. A larger proportion of RCs compared to PROs were able to engage
in knowledge transfer activities that involved the mobility of staff, including taking up positions in industry
or participating in fellowships in foreign institutions. At the same time, there has been an encouragingly
positive trend of knowledge transfer activities. The proportions of PROs and RCs engaged in knowledge
transfer activities between 2017 and 2018 were larger than those during the period between 2015 and 2016.
This is especially the case for research collaborations. This gradual improvement in the development of
knowledge transfers in Malaysia is encouraging and in line with some of the stated national objectives.
FIGURE 25: Propensity to engage in Knowledge Transfer Activities: Percentage of Entities

Declaring Activity (2017–2018)
100%
80%
60%
40%
20%
0%
Staff with joint Research staff Industry staff PhD projects PhD students Industry staff Researchers Foreign Research Research Research
positions in industry in the PRO or with industry conducting received conducting an researchers programs with projects with projects with
(industry and (leaves, University research training exchange or visiting as foreign public research industry
academia/PRO) sabbaticals, fellowship with research institutions and or
secondments) institutions fellows organizations governmental
abroad organizations
PROs RCs
FIGURE 26: Average Number of Research Outputs (2017–2018) per FTE Research Staff for
PROs and RCs
100%
80%
60%
40%
20%
0%
Domestic Plant Domestic Material Industrial PCT patent Copyrights Domestic Domestic Invention
utility model varieties utility model transfer designs applications patent patent disclosures
grants applications agreements grants applications
PROs RCs
While knowledge transfer activities are common, technology transfer activities remain rather small.
An assessment into the average number of research outputs (from 2017 to 2018) per FTE research staff
produced by PROs and RCs showed that PROs main research output lies in innovative research outputs,
namely patents and inventions (Figure 26). Per researcher, PROs are more active in patenting activities
compared to other outputs. However, this does not translate into technology transfer activities for PROs. The
frequency of the proportion of technology transfer activities for both PROs and RCs are markedly different
from knowledge transfer activities. The proportion of PROs’ that engage in technology transfer activities is
rather small [Figure 27]. As expected, there are no PROs involved in the creation of their own spin-offs or
startups given that there are legal restrictions against doing so as discussed previously.
Commercialization of research outputs remains very low in both PROs and RCs. Though some PROs
are involved in activities such as contract research or provision of technology services, the number of PROs
that engage in such activities are much lower than that compared to knowledge transfer activities (Figure
27). Furthermore, only a few PROs reported successful commercialization of research outputs produced
through licensing. A large proportion of RCs engage in contract research agreements whilst other forms of
technology transfer activities remain moderate to low. RCs also have had some experience in commercializing
their research outputs through spin-offs or start-ups with some RCs reporting that they received support
from their respective universities in establishing the spin-off or start-up (Figure 27). While some RCs have
successfully commercialized their research output, the frequency of this can be rare albeit through licensing
or spin-off or start-ups. CEMAC, a marine research center has worked with SMEs and the local community
to commercialize sustainable ways of oyster farming in Malaysia (see Box 4 for details). When analyzing the
average number of technology transfer activities (2017 – 2018) per FTE research staff (Figure 28), PROs’ main
channels of technology transfer lie in licensing contracts that involved patents as well as technology services
contracts that do not involve IPRs. RCs on the other hand rely more on contract research agreements as
FIGURE 27: Propensity to engage in Technology Transfer Activities: Percentage of Entities

Declaring Activity (2017–2018)
100%
80%
60%
40%
20%
0%
Spin-offs with Licensing Spin-offs Products Products Confidential All licenses, Technology Contract
IP rights contracts established commercialized commercialized agreements (no options and services research
involving (firms and through spinoffs (through formal IPRs) assignments for contracts not agreements
patents startups with (staff involved) licensing) all types of IPRs involving IPRs
research staff)
PROs RCs
FIGURE 28: Average Number of Technology Transfer Activities (2017–2018) per FTE
Research Staff for PROs and RCs
0.5
0.4
0.3
0.2
0.1
0
Spin-offs with Licensing Spin-offs Products Products All licenses, Confidential Technology Contract
IP rights contracts established commercialized commercialized options and agreements services research
involving (firms and through spinoffs (through assignments for (with no formal contracts not agreements
patents startups with (staff involved) licensing) all types of IPRs IPRs) involving IPRs
research staff)
PROs RCs
well as technology services contracts that do not involve IPRs. It should also be noted that the success of
technology transfer and commercialization are largely varied between PROs and RCs. Only a small number of
them have sustained frequent success whereas a larger number of PROs and RCs mainly struggle to achieve
much success. There are some leading examples of PROs that have been at the forefront of undertaking
industry-relevant research and commercialization. One such example is that of the Malaysian Palm Oil Board
(see details in Box 5).
BOX 4
Science and Innovation for Businesses,

Environment and Communities
Transferring knowledge, research and innovation can play a vital role in advancing overall
productivity and competitiveness of an economy. Furthermore, it may also bring about numerous
positive externalities to communities within the country.
Established in 1991, the Center for Marine and Coastal Studies (CEMACS) at Universiti Sains
Malaysia is the first marine research center in Malaysia. Its main research thrusts are in conservation of
marine ecosystems, coastal forest ecosystems, green aquaculture and marine mammal. Besides research
on climate change and ocean acidification, CEMACS also champions sustainable or ‘green’ aquaculture.
CEMACS shares its knowledge through community awareness programs which encompasses public
lectures, exhibitions and other collaborative corporate social responsibility projects with various partners.
As the nation’s pioneer research center for marine science, CEMACS aspires to fulfil the goals aligned
especially to the United Nation’s Sustainable Development Goal 14: conserve and sustainably use the
oceans, seas, and marine resources for sustainable development.
CEMACS has found some success in engaging and collaborating with local SMEs. Some of CEMAC’s
knowledge and technology transfer work with businesses include the provision of technical and
infrastructure support to set up viable mud crab hatchery for R&D. Another successful project undertaken
by CEMACS led them to successfully produce marketable oysters in a tightly controlled environment
and laboratory facilities. CEMACS refined the technologies used at laboratory scale to upscale to a
pilot production of oyster seeds, partnering with SME SeaHarvest Aquamarine Sdn Bhd. Through the
support from MOSTI under the TechnoFund, SeaHarvest Aquamarine became the first commercial
oyster hatchery in Malaysia and in the region. CEMACS, guided SeaHarvest Aquamarine by providing
technical knowledge on brood stock conditioning, artificial spawning, larval culture, settlement and
nursery at optimum conditions and at a commercial scale and capacity building on hatchery management.
SeaHarvest Aquamarine has been declared as the only oyster seed hub for oyster farming in Malaysia and
is now supplying oyster seeds to most coastal community growers around Malaysia.
Marine biodiversity research also enables positive impacts into the local communities. CEMACS
work also helps determine local areas of importance in terms of biodiversity protection. CEMACS is
continuously working with the local governments, school authorities and NGOs in raising awareness,
conducting outreach programs on marine biodiversity and environmental issues, as well as experiential
learning at schools, colleges as well as universities, with both local and international participants.
Translational research by CEMACS has potentially improved the socioeconomic well-being of locals
as well. Local coastal communities can benefit from its low-cost and easily adoptable technologies
increasing their sustainable income-generating activities. This offers economic returns for the local
communities by potentially capturing the domestic and foreign markets. Oyster farming has successfully
proven to improve the living standards of the local coastal communities with CEMACS’ and USM’s way of
oyster farming being practiced by communities all around Malaysia. Additionally, the coastal communities
are now able to generate an additional revenue of RM2,000 to RM5,000 per month from the sales of
oysters. With the innovation offered, CEMAC believes that Malaysia could be a world class oyster producer.
Source: Based on discussions with the Director of CEMACS
BOX 5
Leading the Way for

Palm Oil Research
For the last 20 years, the Malaysian Palm Oil to evaluate technologies for commercialization.
Board (MPOB) was entrusted to serve Malaysia’s Furthermore, their success lies in formulating research
palm industry. Its main function is to enhance strategies with clear vision and mission in driving the
the well-being of the Malaysia oil palm industry industry forward. MPOB also focuses on developing
through excellent R&D and ser vices. MPOB’s talent through human capital development in the
strategy is threefold; 1) high income – aimed at strategic research areas such as biotechnology,
maximizing productivity and production efficiency bioenergy, food and nutrition, sustainability as well
as well as improving quality, competitiveness as development of research facilities that would
and sustainability; 2) sustainable development – facilitate research programs in all aspects of oil
advocating sustainability; and 3) value-addition – to palm industry. At the same time, MPOB constantly
boost the value of palm-based products, creating interacts with the industry to exchange views and
new growth and generating additional income. feedback on issues concerning the development of
MPOB aspires to always be dynamic to keep up with the oil palm industry including priorities of research
the pace of the global markets and to be in line with strategies. Engagements are conducted through
the government’s aspiration for the developments of associations such as Malaysian Palm Oil Association
the palm industry, the economy and the society. (MPOA), Palm Oil Millers Association (POMA),
National Association of Smallholders (NASH)
To date, MPOB has unveiled more than 600 and more. Additionally, MPOB maintains close
technologies related to the oil palm and palm engagements with stakeholders and collaborates
oil for adoption and commercialization by the with local and renowned institutions worldwide to
industry and entrepreneurs. About 30.4 per cent ensure that innovations and technologies are at the
of the technologies has so far been commercialized; highest standard and up to the expectations of the
higher than the national average of 3-5% and industry and scientific field. Collaborative research is
generated an estimated market value of RM3 billion. executed with local universities, foreign universities
The technologies can be categorized into following plantation companies, overseas institutions such as
sectors: 1) Upstream (Plant Biotechnology, Plant Massachusetts Institute of Technology (MIT) in the
Protection and Plantation); 2) Midstream (Milling & US, Commonwealth Scientific and Industrial Research
Processing and Phytonutrient and Nutraceutical); and Organization (CSIRO) in Australia, Imperial College
Downstream (Food, Oleochemical, Biomass, Farm and Royal Marsden in UK to name a few.
Machinery, Green Energy, and Livestock).
Oil palm smallholders and SMEs are actively
The success of MPOB are attributed to a engaged with MPOB as well. MPOB has established
few factors. As pioneers in oil palm and palm a division to carry out research activities relevant
oil R&D, MPOB develops commercially viable to smallholders and provides extension services to
research findings and technologies impacting and educate and increase awareness on good agricultural
encompassing the whole industry. MPOB offers new practices to raise oil palm yield. MPOB also provides
products and technologies at their annual showcase technical consultancy and other services to oil palm
event, MPOB Transfer of Technology Seminar and industry and entrepreneurs for commercialization of
Exhibition, providing opportunities for businesses technologies and formulation of food and non-food
products. The support and facilities provided covers closer towards oil palm’s theoretical yield per palm.
a wide range of activities from pilot plant facilities, Significant progress has been seen in increasing the
to technical advisory services and feasibility studies yield of oil palm achieved on existing land banks.
on oil palm planting. MPOB is also the pioneer of
the development of the Malaysian Sustainable Palm Some successfully commercialized products and
Oil (MSPO) certification scheme to bring the whole technologies among a catalogue of products
industry towards sustainable practices. MPOB developed by MPOB include:
has been assisting independent smallholders to
• Palm-based Biodiesel: MPOB developed the
be certified with MSPO that are gathered into 162
palm-based biodiesel technology and formulated
manageable groups known as Sustainable Palm Oil
the National Biofuel Policy. Subsequently,
Cluster (SPOC). To date, all 162 SPOCs (100 %) have
Malaysia started using the blended palm biodiesel
been certified with MSPO.
with petroleum diesel for the transportation and
industrial sector. In January 2020, the mandate
to manufacture biofuel with a 20% palm oil
Research Highlights
component - known as B20 - for the transport
sector was rolled out.
Many prominent research findings can be credited
to MPOB. Great strides have been made in the • Continuous Sterilization of Fresh Fruit Bunches: A
area of biotechnology having recorded ground- Continuous Sterilization System utilizing a double-
breaking research on decoding the oil palm genome roll press that crushes fresh fruit bunches before
and discoveries of genes that control important steaming them. This system simplifies the process
agriculture traits, published in the highly respected as well as the facilities and equipment needed-
scientific journal Nature. The genome breakthrough translating to lower building costs and better
has laid the groundwork for further discoveries that environmental viability.
can lead to the development of new and improved
oil palm varieties. The mapping of the genome paved • Rolek Palm Nutcracker: Conventional nutcrackers
the way forward for enhancing productivity via better used to crack the palm nuts have proved to
quality planting material, one of which is the discovery be inadequate, resulting in high percentages
of the gene Shell, influencing the thickness of the damaged kernels or uncracked nuts. This spurred
shell; shell thickness correlates to oil yield. In terms MPOB to invent the Rolek Nutcracker, which makes
of agricultural biotechnology, MPOB successfully use of the dynamic interactions of adjustable rods,
commercialized important diagnostic tools that enabling it to break nuts of various sizes at an
are being used by the industry to assist on-going impressive cracking rate of 99 percent. The result-
breeding and cloning efforts towards producing new facilities using the Rolek Nutcracker now enjoy
and improved varieties. Agricultural biotechnology significantly less breakage.
platforms such as tissue culture, molecular screening
methods as well as enabling technologies which
include sequencing, genomics selection and even
genetic engineering can push the production of oil Source: Based on discussions with representatives of MPOB
CHAPTER 5
Challenges and
Obstacles to
Technology Transfer
and Commercialization
Chapter 5: Challenges and Obstacles to Technology Transfer and Commercialization
Past literature cited persistent challenges and obstacles for technology transfer and commercialization
in Malaysia. Despite numerous efforts and policies introduced to foster R&D and commercialization efforts
of public HEIs and PROs, these challenges and obstacles for technology transfer and commercialization exist
(OECD, 2016; OECD, 2015). Govindaraju (2010) cites that among the substantial barriers to invigorate the rate
of commercialization is the divergence between the R&D outputs supplied by public research institutions
(especially in HEIs) and those demanded by the industry in Malaysia. This challenge is attributed to PROs not
being important sources of innovation for the economy, leading to the lack of interest for industry to link with
researchers in HEIs or PROs (Govindaraju et al., 2013; Ismail et al., 2017).
The survey results lend some very useful insights into these issues around technology transfer and
commercialization of research. Using the survey results, the challenges and obstacles faced by PROs
and RCs are separated into two large categories: Institutional Failures and Research and Technology
Competences.17 Research and knowledge competences reflect the challenges and obstacles faced by the
public research entities that inhibit capabilities in research as well as the process of technology transfer of
research outputs (Figure 29). Institutional failures pertain to the challenges and obstacles that the PROs
and RCs face related to policies, regulations or laws within their respective institutions or the economy
(Figure 30).
Growing uncertainty and inconsistency around funding research

activities
A persistent and pervasive challenge cited across both PROs and RCs is the lack of certainty and
consistency of funding to conduct research activities. As highlighted earlier in the study, PROs have
varied funding mechanisms. A couple of PROs believed that funding is not a severe challenge to them since
they are able to generate their own revenues or are provided additional financial support by the government
for research that is considered a priority for the nation. However, most PROs believed that funding is a severe
problem as they are still dependent on government funding (Figure 29).
The added budgetary pressures and inconsistent flow of funding in recent times exacerbate the
challenges faced by the research organizations to conduct research activities. All the responses from
the university RCs showed that funding for research activities was a barrier to them, posing a severe and
important challenge. There is a similar trend when looking at funding for technology transfer activities
such as including proof of concept, prototype, patenting and development. While these were less severe
than the lack of funding to conduct research activities, both PROs and RCs found it a challenge. In recent
years, the government has introduced numerous policies and funding programs to support public R&D and
commercialization through various channels from project grants to pre-seed funding (Ab. Aziz et al., 2012).
However, the uncoordinated and seemingly complex system of policies and funding from different ministries
pertaining to R&D and commercialization deem it ineffective (Bakar et al., 2016). Further, in line with policies
outlined in the recent Malaysia Plans and the Education Blueprint, as discussed earlier, measures have been
implemented to make the public universities in Malaysia more financially independent and self-sustaining
exerting more pressure on these institutions. The RCs mainly reported that funding from universities has
been inconsistent and decreasing year after year. Some of them would receive funding to set up their
respective RCs but would have to explore other avenues to obtain funding for other expenses.
17 Questions pertaining to each category from the questionnaire are available in the Annex 4.
FIGURE 29: Severity of the lack of these research and technology transfer competencies as
barriers to knowledge and technology transfer for PROs and RCs
Research and Technology Transfer Competences PROs Research and Technology Transfer Competences RCs
Funding
Lack of Local Absorption Capacity
Lack of Local Absorption Capacity

Human Capital
IPR and Tech Management Skills Facilities and Infra.
Fund for Tech. Transfer Fund for Tech. Transfer
Funding Human Capital
Tech Evaluation Mechanism Industry Relevant Research
Industry Relevant Research Tech Evaluation Mechanism
Facilities and Infra. IPR and Tech Management Skills
0% 50% 100% 0% 50% 100%
Not Important Moderately Important Not Important Moderately Important

Important Very Important Important Very Important
Lack of effective implementation of incentives
One of the common challenges faced by both PROs and RC is the implementation of academic
incentives. Malaysia has moved towards performance-based funding measures that include outlining
academic incentives to promote greater links to industry and society. However, technology transfer and
commercialization are not fully recognized or prioritized in career progressions or funding incentives for
these institutions leading to the ineffective implementation of academic incentives. Three-quarters of the
surveyed PROs reported that a lack of adequate incentives for researchers/inventors was an important or
very important challenge to them while all the surveyed RCs reported the same (Figure 30). This could in
large part be explained by key performance indicators in universities being centered around producing
publications and less recognition being given to other activities such as consultancy work. Consultancy with
industry is an important channel for knowledge and technology transfer and has shown greater opportunity
for commercialization (Govindaraju et al., 2013). While RCs reported that the lack of incentives stemmed
from the focus on producing scientific publications, PROs found that they sometimes vacillate between
doing innovative research and producing scientific publications. Their focus largely depended on the
short-term goals and objectives set out by the respective organizations, in line with the objectives of the
government. In the case of RCs, their respective universities provided good support as well as incentives
for research. However, some stringent targets set by ministerial bodies inhibited and disincentivized certain
research or innovative activities, where scientific publications still play a large role in the scientists’ or
researchers’ careers.
FIGURE 30: Severity of these institutional failures as barriers to knowledge and technology
transfer for PROs and institutional challenges perceived by PROs and RCs
Institutional Failures PROs Institutional Failures RCs
Cultural Gap Research Incentives
Cultural Gap
Research Incentives
Communication with Industry

Employment Laws
Collaboration Policies
National Legal Framework
Employment Laws
Tech. Transfer Policy

Tech. Transfer Policy
Communication with Industry

University Support
Collaboration Policies National Legal Framework
0% 50% 100% 0% 50% 100%
Not Important Moderately Important Not Important Moderately Important

Important Very Important Important Very Important
The perceived cultural gap between industry and research
The cultural gap between research organizations and industry is cited as a large problem amongst
PROs and RCs. Though it was reported that a lack of policies promoting collaboration between PROs and
RCs was generally not an important problem, other aspects of collaborations were found to pose challenges.
The cultural gap between research organizations and industry is cited as a large problem among PROs and
RCs where all but one PRO reported it to be an important or very important problem while 80 percent of all
RCs reported the same. Furthermore, the lack of effective communication between public research entities
and industry is being cited as a problem with all the research entities having some degree of difficulty in
establishing effective communications with industry players. This cultural gap, combined with the obstacle
of a lack of communication to align interests and collaborate, create frictions between the two parties
inhibiting effective collaborative networks or industry-focused research outputs and innovations.
Perceived lack of absorptive capacity and demand from firms
Research outputs are not transferred to the industry due to the perceived lack of demand or absorptive
capacity of firms. When asked if the research conducted addresses the needs of local businesses, the
results are mixed (Figure 29). Half of the responses classified this challenge as being either very important
or important whereas half said otherwise. The response was similar for university RCs as well. Some PROs
and RCs reported that it was not a problem at all as their research was closely aligned with the needs of
businesses and industry. On the other side of the spectrum, some PROs and RCs reported that there were
not enough opportunities to transfer their research outputs to industry. Outputs with large financial outlay
were sometimes shelved as there was a lack of domestic demand. A larger concern is the lack of capability
or absorptive capacity of the national or local businesses to use research results. More than 80 percent of
both PROs and RCs reported that the lack of absorptive capabilities in businesses is an important or very
important challenge for them. Certain research outputs produced by the PROs and RCs may address the
needs of the local businesses or industries, who however would prefer research outputs or products that are
less sophisticated than what was originally produced or developed. This causes the research entities to re-
think certain outputs and modify them to cater to the capabilities of the national or local businesses.
National policies and legal restrictions may hinder effective technology

transfer and commercialization
PROs cited employment laws as hindering effective industry-research collaboration. While most laws
and regulations were believed to be adequate, PROs felt that national policies put forth by the government
were inadequate to support the enhancement of research and development in Malaysia (Figure 30). At
the same time, they believed that some policies were inadequate to support the absorption of domestic
innovation by businesses or industries in Malaysia. Obstacles in government employment laws that limits the
interaction between industry and researchers also pose a problem to PROs. Most PROs reported that their
scientists and researchers would like to engage in secondments or attachments in the industry. However, it
was reported that some PROs were not allowed to do so, or sometimes, large obstacles must be overcome
to engage in such activities.
CHAPTER 6
Conclusions
and Summary
Chapter 6: Conclusions and Summary
Malaysia recognizes the need to embrace an innovation-driven growth model to weather the current
global crisis and achieve its aspirations of becoming a high-income nation. Malaysia has transformed what
was once an agricultural economy, to one that is manufacturing-led. An export-led growth model; Malaysia
is deeply inserted into global value chains, particularly specializing in electrical and electronics products and
components, that account for approximately one-third of the national exports. Recognizing the importance
of productivity-led growth model, R&D resources and expenditures in Malaysia grew over the years along
with increasing policy efforts through reforms and improvements to bolster educational as well as science,
technology and innovation capabilities and outcomes. Malaysia has seen continuous growth in innovation
outputs such as scientific publications and inventions. Policy changes made in the performance-based
budgeting have seen improvements in publications and patents, as well as collaborations with industry.
However, there has been little progress seen in the commercialization of research outputs and technology
transfer activities from research organizations to industry.
There is a need to focus efforts on improving the effectiveness of public research efforts to have
impactful results in markets and society. To date, the successes of PROs and HEIs have been limited to
a select few cases, raising concerns regarding the efficacy of the recent efforts. Recent policies introduced
by the government encapsulate a wide range of industries and sectors in Malaysia with some emphasis on
enhancing R&D and innovation. In addition to national plans, industry-specific plans were also introduced.
However, without effective technology diffusion institutions, these would all be difficult to accomplish. A
large emphasis is being placed on the enhancement of the quantity of R&D and innovation in Malaysia
but not necessarily linking it up closely with industry. This implies producing research outputs that are not
demand-driven; losing an opportunity to make a greater impact on economic diversification, industrial
development and growth. The analysis above provides some useful insights that could inform future policy
reforms in the area with a view to successfully utilize and commercialize the outputs of public research to
help achieve Malaysia’s objectives of becoming an innovative and knowledge-based economy.
Some of the recent policies and reforms in the sector are noteworthy. Reforms suggested to move
HEIs towards greater autonomy and self-sufficiency are noteworthy and the performance-based monitoring
is certainly a move in the right direction. Malaysia stands out as a major reformer in the region through
the implementation of important changes in the governance settings and performance-based funding
and evaluation practices. According to the WIPO Global Innovation Index, 2019, Malaysia’s strengths lie
in having a very good score in university-industry research collaboration, and this might be a result of the
public policies and regulations undertaken by the Government aimed towards strengthening the industry-
academia linkages. In the case of PROs, those who are corporatized, or companies limited by guarantee are
able to fund their research through different private sources, all have industry representations and tend to
have more autonomy as they have a larger percentage of independent activities compared to other types of
PROs. This underscores the relationship between institutional funding sources and the degree of autonomy
that institutions have. Encouragingly, there is a large amount of collaborative research being undertaken
by both PROs and RCs indicative of the policies and measures in place to foster greater industry-research
collaboration.
These reforms could be further strengthened by addressing the issues highlighted below to achieve more
impact.
With many different ministries involved in R&D, there needs to be a more coordinated approach
implemented. The heterogeneous nature of research and innovation actors in Malaysia, combined with the
numerous agencies, organization and bodies that play a role in R&D funding create a complex and at times
confusing landscape for research institutions. The establishment of a centralized research management
agency has been talked about since the inception of the 11th Malaysia Plan. This agency is intended to better
coordinate all publicly funded R&D&C&I projects to ensure effective and efficient utilization of public funds.
The establishment of this centralized research management agency to provide a coordination framework to
national research objectives and priorities will be an important development.
Greater consistency required around objectives to encourage long term strategic planning for
research. There is a large degree of fluctuation seen in R&D expenditures amongst the surveyed institutions,
which could, to a large extent, be attributed to uncertainties around R&D funding. While being subject
to performance monitoring and evaluation, some surveyed PROs and RCs struggle to have a long-term
strategic research plan, especially pertaining to their long-term investment strategies. Sources of funding
to a large extent can determine the strategic focus of research organizations. Uncertainty with regards to
funding levels as well as vacillating goals and strategies set forth by government policies jeopardizes the
research continuity resulting in a degree of short-sightedness on research and development plans for some
PROs and RCs. With many different ministries involved in R&D, there needs to be a more coordinated approach so
that research organizations are not dealing with fulfilling short-term and diverse objectives laid out by the various
funding bodies that they receive funding from.
There needs to be a systematic effort towards implementing consistent M&E frameworks across
public research institutions to inform policy making. One of the observations while collecting data for
the survey was that organizations were meant to report on different performance indicators for the varied
sources of funding it received. Thus, there is no consistent framework that all government agencies/ ministries
use to collect data from these institutions, which would make assessing the returns to these investments at
the national level a challenge. There needs to be a consistent M&E framework used across funding programs and
agencies to gather data to enable a robust assessment of returns to R&D expenditure. In addition, the data available
through firm-level census implemented by the Department of Statistics, Malaysia contains important information
on R&D expenditure by firms and should be used to inform future policymaking.
Greater autonomy encouraged to make strategic decisions at RCs in Universities. Through the various
policies being proposed, MoHE aims to reduce the dependence of HEIs on government funding and
enhance their autonomy. However, past research suggests that it is hard to tell if any major improvements
in operations, management or financial sustainability were achieved (OECD, 2016). At the same time, the
autonomous status assigned to the universities has not been accompanied by significant amendments to
the structure of HEIs, as some operations may still closely adhere to the governance framework of the civil
service. The decreased funding from the government is putting pressure on RCs to find new funding sources and
should be accompanied by greater autonomy to make strategic decisions at the level of the center, while recognizing
that they are under the overall purview of the university.
Better implementation of academic incentives provided towards technology transfer and

commercialization of research. While both PROs and RCs have incentives to increase technology
transfer and commercialization, they are not very effective. This is a result of the weak recognition of the
value of technology transfer and commercialization initiatives in the performance evaluation and careers
of researchers. The universities, in particular, are subjected to a new performance-based regime that
emphasizes quantitative performance criteria- notably publications and patents (OECD, 2015). This has led
to an increase in the number of publications and patents as research outputs but has not led to an increase in
commercialization activity. The main factor that dissuades researchers from engaging in technology transfer
and entrepreneurial activities is the heavy weight scientific publications (number and journals) still receive
among the merit-driven criteria for career advancement and salaries. There needs to be better implementation
of the incentives provided for technology transfer and commercialization by recognizing the quality of IP rather than
quantity of IP, so that commercialization efforts receive greater rewards for career advancements of researchers.
Management processes should also be reconsidered and streamlined to facilitate commercialization

activities. HEIs have gained substantial flexibility and are less restricted by bureaucratic constraints than in
the past. The creation of wholly owned corporate subsidiaries to handle commercialization has substantially
helped to improve the process of engaging with industry (OECD, 2015). These subsidiaries can operate like
private entities, and freedom from regulatory constraints has allowed them to handle IP licensing agreements
and spin-offs. Importantly, researchers can create and decide to work for spin-offs. However, bureaucratic
obstacles still exist, particularly in some PROs which came up increasingly in the survey responses. The IP
Commercialization Policy of publicly funded technologies says that: “The Recipient establishes a company
for the purpose of Commercialization of the Intellectual Property, where Inventor(s) and Recipient may
own equity in the company together with any third party, in proportions to be negotiated.” (“Recipient”
means any person(s) who receives Fund from the Relevant Body)”. Reading these provisions would imply
that national policies do not prohibit the formation of spin-offs by PROs, but there may be legal statutes
regulating each PRO as well as its policies and regulations that prevent their researchers to engage in
commercialization activities and forming spin-offs. PROs suffer from bureaucracy, and this might hinder
their ability to commercialize technologies and IPRs. Management processes should also be reconsidered and
streamlined to create more cost and time-effective decision-making to facilitate commercialization activities.
Strengthening Technology Transfer Offices (TTOs) to enable them to provide support to enhanced
linkages with industries and facilitate demand-driven research and technology transfer capabilities.
Public HEIs in recent times have established TTOs in order to facilitate the commercialization process of R&D
outputs by academic researchers. The establishment of these TTOs are becoming more prevalent for the
public HEIs in Malaysia. However, these TTOs are relatively new and are rather inexperienced (Yaakub, 2011).
PROs face certain issues in IPR and technology management skills as well as having an efficient and effective
technology evaluation mechanism. The lack of know-how and expertise pertaining to IPR, technology
transfer management and technology evaluation mechanism hinder the effectiveness of technology transfer
in PROs. Some PROs have small technology transfer offices, which are understaffed with relevant personnel
such as lawyers or business managers to conduct and manage technology transfer activities. The processes
are sometimes managed by the scientists themselves who do not have the required expertise. This problem
is more pervasive in smaller PROs. As we have seen with the results of the survey, there has been limited
success of substantial commercialization of research outputs that were facilitated by the TTOs for both RCs
and PROs. A fundamental reason for this could be that TTOs are seen to be poorly structured and possess
poor intellectual property management skills to effectively conduct and facilitate the commercialization of
research output (OECD, 2016). TTOs should be prioritized in research universities and PROs with an intention of
staffing them with competent staff that can further technology transfer and commercialization activities from the
research organizations. In the interim, process-based financial support could be provided to assist researchers to
get external help alongside project-based funding. Further, these TTOs should tap into the innovation and technology
managers association that had been created as a platform to improve the capabilities of managing IPs by exchanging
experiences.
Need to facilitate greater secondment opportunities especially in PROs and invest in designing ways
for researchers to closely communicate with industry to undertake greater collaborative research.
While both PROs and RCs engaged in collaborative research and that some of the research was conducted
to meet the needs of the industries, there were a few challenges highlighted. PROs cited employment
laws and the lack of staff mobility to engage in the industry as one of the factors that hindered effective
industry-research collaboration. Further, the low skills and absorptive capacity and capabilities of businesses
and industries in Malaysia are also important factors that affected the demand for research outputs as well
as success in industry-research efforts. Lastly, the communications between public research entities and
industry are cited as a problem with all the research entities citing some degree of difficulty in establishing
effective communications with industry players. Addressing these challenges could greatly facilitate further
linkages. These would include: (i) encouraging and facilitating secondment opportunities for researchers in PROs
and RCs without having any repercussions on career advancements; (ii) investing in designing ways for researchers
to communicate and work more closely with industry so that they can produce more industry-relevant research and
also help increase capacity of the firms. In addition, efforts should be made to design a platform that would provide
both researchers and potential users (industry and community) information on available research and possible
demands from users (See successful example of CREST in Box 6). This could potentially serve as a platform for
awareness-raising, networking opportunities and identifying potential collaborations.
BOX 6
Facilitating Collaboration Between the

Government, Industry and Academia
The Collaborative Research in Engineering, Science and Technology (CREST) was established in 2011
with an aim to strengthen R&D and innovative collaboration for the country. CREST is a Company
Limited by Guarantee set up to drive collaboration in R&D, talent development and commercialization for
the electronic and electrical (E&E) industry encompassing all three players of a triple helix system, namely
the government, industry and academia.
CREST works as a collaborative platform where its members can actively communicate and
explore collaboration options between different members and beyond, encouraging the formation
of local and international strategic partnerships. To date, CREST has over 80 members within its
platform ranging from government agencies, public and private universities, SMEs, large companies and
multinational companies (MNCs). CREST members have access to benefits such as the CREST R&D Grant,
participation in special networking sessions, and access to the use of CREST facilities amongst others.
The members have representation on the CREST Board of Directors. Currently, their board consists of
representatives from the government, industry and academia. It is mostly industry-led as a majority of
the board members come from the industry, driving the goals of market-driven R&D. CREST is funded by
the government through the Economic Planning Unit (EPU) where the funds have been channeled via the
Ministry of International Trade and Industry (MITI), Malaysian Investment Development Authority (MIDA)
and Northern Corridor Implementation Authority (NCIA).
The early stages of CREST involved pushing multiple industry driven R&D projects and management
of R&D grants appropriated by the government and was then followed by a focus on enhancing
specific technology clusters and collaborations. Some of the key technology clusters focus include
LED/optoelectronics, IoT and embedded systems, integrated circuit design, advanced materials and
packaging, advanced manufacturing as well as drones and autonomous vehicles.
One of CREST’s commendable achievement stems from the LED/optoelectronics cluster which
involves research in gallium nitride. CREST and one of its members from Osram were able to collaborate
with Nobel laureate scientist, Shuji Nakamura, from the University of California, Santa Barbara to establish
two specialized labs in Malaysia where researchers and engineers can conduct research between the
US and the two labs in Malaysia. This effort reaped benefits as the R&D conducted allowed new LED
technologies to be developed and used in Malaysia.
Furthermore, to date, CREST has been involved in 146 collaborative R&D projects for both
companies and universities around Malaysia, amounting to a value of RM193 million. According to
estimates from CREST, they were able to generate eleven times the return for every Ringgit of R&D spent
and achieved a 28% commercialization rate from completed R&D projects. Through their funding, grants
and research projects, CREST has also been successful in nurturing local technology start-ups as well
as industry talents, entrepreneurs, researchers and students. These efforts involved over 500 industry
talents and entrepreneurs, over 6,000 graduates trained and 20 technology startups.
Source: Based on public information available and discussions with CREST (data as of August 2020).
Detailed Acknowledgements
We would like to express our appreciation to the following PROs and University RCs for their participation in
our survey and study.
PROs
Fisheries Research Institute (FRI) Malaysian Institute of Microelectronic Systems
Dr. Zainoddin Jamari – Director (MIMOS)
Dr. Wan Norhana Nordin Mr. Thillai Raj T. Ramanathan – Chief Technology Officer
Dr. Chandran Elamvazuthi
Forest Research Institute Malaysia (FRIM) Dr. Yoong Siew Wai
Dr. Gan Kee Seng – Director (Forest Products) Mr. Ng Kwang Ming
Dr. Mohd Rosli Haron – Head of Research Policy and
Planning Malaysian Institute of Pharmaceuticals and
Ms. Toh An Nee Nutraceuticals (IPharm)
Mr. Azizairol Md Mizan
Institute for Medical Research (IMR) Dr. Nur Adelina Ahmad Noruddin
Dr. Tahir bin Aris – Director Ms. Faisalina Binti Ahmad Fisol
Dr Norazah binti Ahmad – Head of Infectious Diseases Dr. Lau Wai Kwan
Research Centre (IDRC)
Dr Ami Fazlin binti Syed Mohamed – Head of Herbal Malaysian Palm Oil Board (MPOB)
Medicine Research Centre (HMRC) Dr. Ahmad Parveez Bin Ghulam – Director General
Dr. Laziana Ahmad
Malaysian Automotive, Robotics and IoT Institute Ms. Ruba’ah Binti Masri
(MARii) Mr. Mohd Saufi Bin Awang
Ms. Fateha Aziz – Head of Manufacturing
Mr. Mohd Shahrulnizam Sarip – Chief Technology
Malaysian Rubber Board (MRB)
Officer
Dr. Amir Hashim Md Yatim – Deputy Director General
Ms. Siti Maisarah Mohd Paisal – Head of After Market
Ms. Hashima Idris
Mr. Ahmad Hamdan Bin Othman
Malaysia Genome Institute (MGI)
Dr. Azfa Johari
Malaysian Timber Industry Board (MTIB)
Dr. Anuar Jonet
Mr. Shah Badri – Deputy Director (Policy and Strategy)
Dr. Halimah Alias
Detailed Acknowledgements
University RCs
UM Centre for Research in Biotechnology for USM Centre for Drug Research (CDR)
Agriculture (CEBAR) Professor Vicknasingam Balasingam Kasinather –
Professor Jennifer Ann Harikrishna – Director Director
Dr. Najiah Mohd Sadali Dr. Siti Rafidah Yusof
UM Centre for Natural Products Research and Drug USM Collaborative Microelectronic Design Excellence
Discovery (CENAR) Center (CEDEC)
Associate Prof. Najihah Mohd Hashim – Head Professor Ir. Mohd Fadzil Bin Ain – Director
Professor Mohd Rais Mustafa – Former Head
Mr. Muhammad Nazil Afiq Bin Nasharuddin USM Centre for Marine and Coastal Studies
(CEMACS)
UM Nanotechnology and Catalysis Research Centre Professor Aileen Tan Shau Hwai – Director
(NANOCAT)
Professor Mohd Rafie bin Johan – Director USM Institute of Nano Optoelectronics Research
Dr. Moris Lee Kian Mun and Technology (INOR)
Professor Zainuriah Hassan – Director
UM Power Energy Dedicated Advanced Centre Associate Prof. Ng Sha Shiong
(UMPEDAC)
Professor Nasrudin Abd Rahim – Director UTM IJN-UTM Cardiovascular Engineering Centre
Ms. Noriah Nor Azman Dr. Ahmad Zahran Bin Md. Khudzari – Director
UPM Centre for Nutrition and Non-Communicable UTM Centre for Low Carbon Transport (LoCARtic)
Diseases Dr. Srithar Rajoo – Director
Professor Chan Yoke Mun – Head
UTM Ocean Thermal Energy Centre (OTEC)
UPM Sustainable Process Engineering Research Professor Dato’ Ir. Dr. A. Bakar Jaafar – Director
Center (SPERC)
Mr. Abdul Shukur bin Mohamad
Assoc. Prof. Ir. Dr. Wan Azlina Wan Ab Karim Ghani
Peng – Head
UTM Wireless Communication Centre (WCC)
Prof. Dr. Jafri Din – Director
UPM Institute for Plantation Studies
Associate Prof. Dr. Razali Ngah – Deputy Director
Prof. Datin Dr. Siti Nor Akmar Abdullah – Former
Director
UPM Institute of Tropical Forestry and Forest

Products
Dear. Prof Ahmad Ainuddin Bin Nuruddin – Director
Ms. Aiedah Binti Abdullah
Annex 1:
Regional Survey Instrument and Sampling Frame18
The World Bank Technology Transfer Survey aims to collect information about the research capacity
of public research institutions (universities and PROs), the types of institutional governance currently
prevailing, the use of public policies for research and technology transfer, and more generally, the
current state of development of technology transfer linkages between scientific institutions and
society (industry and government). The survey was implemented in Malaysia, the Philippines and Vietnam.
A proportional-stratified random sample based on the type of institution and location was defined. A
check was conducted with the aid of local experts to ensure research engagement and heterogeneity in the
level of research capabilities across institutions. In the case of universities, the focus was research-engaged
institutions. Institutions involved in Social Sciences, Management, Arts and Humanities were excluded.
The surveys were implemented from November 2019 to February 2020 through face-to-face
interviews with Directors of PROs and University RCs. The interviews had a structured-interview format.
Interviewees received questionnaires at least one or two weeks in advance. In most cases, half of the survey
was covered during the interview while the rest of the questionnaire was completed and received after the
meetings.
TABLE A1: Country Samples and Response Rate
Questionnaires Sent Received (Response Rate) Total PROs Surveyed Total RCs Surveyed
Malaysia 15 RCs 15 RCs 10 15

10 PROS 10 PROS
25 targeted 25 received
The Philippines 18 RCs 15 RCs (75%) 8 15

10 PROs 8 PROs (80%)
28 targeted 23 received
Vietnam 40 (Ha-Noi) 17 (43%) 11 6

23 (HCMC) 15 (65%) 5 10
63 targeted 32 received 16 16
18 Forthcoming Regional Flagship on Innovation (Cirera et al., 2020) and Zuniga (2020)
Annex 1: Regional Survey Instrument and Sampling Frame
For the Philippines, a stratified sample of 14 RCs out of a total of 47 RCs (engaged and producing
S&T outputs) and 14 out of 17 PROs was defined. About 59 percent of the 17 PROs are under the
Department of Science and Technology, followed by 29 percent under the Department of Agriculture, while
the others belong to other line agencies. To identify RCs, a sample was drawn from list of HEIs which listed
882 universities conducting R&D in the Philippines. Out of this, 243 conduct research activities associated
with science, technology and innovation, 42 percent of which are in NCR, Region III, and Region IVA. 23
institutions agreed to have a face-to-face interview but only 15 RCs and 8 PROs returned a completed survey
form.
In Malaysia, the survey was administered on 10 PROs and 15 university RCs in total across four
public research universities. Both PROs and RCs were randomly selected as well. The surveyed PROs
are under different ministerial bodies covering different technical fields and industries. The list of public
research institutes compiled by Malaysia Science and Technology Information Centre (MASTIC) under the
Ministry of Science and Technology (MOSTI) was used as a sampling frame, supplemented by a list of PROs
compiled by World Bank’s staff. Random samples were drawn from this list, with PROs representing various
ministries in Malaysia. For the universities, the national listing of “research universities” officially defined by
the Government was used. Before a random sample was drawn, the RCs were classified into three categories:
a) Higher Institution Center of Excellence (HICoE) (which are specified by the Ministry of Education); b)
Centers of Excellence (CoE) (classified by the universities); and c) RCs (which are neither HICoEs nor CoEs.
Each university would have at least one of each types of RC within the sample for a more accurate and robust
representation. RCs were randomly selected but an effort was made to have to ensure we have at least one
HICoE, one CoE and one research center surveyed.
For Vietnam, that has more than 1000 universities operating in the country, the list of research
universities was produced based on the top 20 universities recorded in Web of Science ISI publication
activity for the years 2016-2017. From this list, the selection focused only on two cities: Ha Noi and
Ho Chi Minh City (MCMC). Secondly, for each University the whole list of RCs was produced and analyzed
by accessing websites of universities and selecting RCs as having the following criteria: (i) a RC unit must
conduct research; (ii) have a research director, and (iii) equipment/laboratory for doing research. In Vietnam,
for both PROs and RCs, the target sample for PROs was 20. The final sample contained 16 RCs and 16 PROs.
Annex 2:
Snapshot of Main Policies around Science,
Technology, R&D and Innovation in Malaysia19
Period Policies and Plans Aims, Initiatives Implemented and Highlights
1980s The Fifth Malaysia Plan • Aimed to push research and development as a robust driver for economic
(1986–1990) developments, mainly through agriculture and manufacturing.
• Built the capabilities for technology development and adoption.
• The first time that science and technology had a large focus in the Malaysian
Plans and beginning of STI policies in Malaysia.
The First National Science • Aimed to promote Malaysia’s self-reliance in S&T through upscaling local
and Technology Policy capabilities in R&D and improve the infrastructure of science and education.
(NSTP1) (1986-1989) • Strengthened coordination policy planning and funding for STI, intensification
of consultations with industry.
• Introduction of Intensification of Research in Priority Areas (IRPA) grants which
gathers public funding for under allocation and review process. A tool to
set strategic priorities and harness public research investments to industrial
development goals.
• Double deduction tax incentives for R&D.
The Industrial Masterplan • Identified the weak indigenous technological base of Malaysia.
(1986–1995) • A shift towards manufacturing and modern industries such as electronics.
• Aimed to create more liberalized private sector investments through regulatory
reforms and regulations to build up local capabilities.
1990s The Sixth Malaysia Plan • Shifted towards exploitation and market orientation of public research through
(1991–1995) commercialization of public research and technologies.
• A push towards export of research and technologies from Malaysia.
• Emphasized on the importance of improving intellectual property policies.
• Transferred major industrial technology institutes to Ministry of Science,
Technology and Environment (now known as MOSTI) to enhance their
coordinating role.
• Establishment of Malaysian Technology Development Corporation, a
technology venture company, to facilitate commercialization of public research
findings.
• Introduction of Wawasan 2020.
Industrial Technology • Building upon the IMP, it aimed to strengthen institution and support
Development: A National infrastructure for technological innovation.
Policy and Plan of Action • Highlighted the structural weaknesses in Malaysian technology development.
(1990–2001)
• Focused on key fields that includes automated manufacturing technology,
advanced materials, biotechnology, electronics and information technology
(later joined by energy, environmental and aerospace technology).
19 Please note that this list is not exhaustive. For further reading, please refer to the policies and plans mentioned and the source of the table.
Annex 2: Snapshot of Main Policies around Science, Technology, R&D and Innovation in Malaysia
The Second Industrial • A more selective industrial policy driven by private-sector specialization rather
Masterplan (IMP2) than state plans.
(1996–2005) • Strategies towards modernizing and industrializing whilst shifting towards
emerging technologies.
• Focused on the development of industrial clusters such as the electronics and
electricals (E&E) industry in Penang.
The Seventh Malaysia Plan • Continuation of the goals set by the previous Malaysian Plans.
(1996–2000) • A focus on specialization and revamping educational and training system to
meet industrial needs.
• The introduction of the Multimedia Super Corridor (MSC) aimed to attract
companies with temporary tax breaks and modern infrastructure and facilities.
This was aimed at IT and multimedia companies.
2000’s The Eight Malaysian Plan • A large focus on productivity-driven growth and a move towards a knowledge-
(2001–2005), The Ninth based and innovative economy.
Malaysian Plan (2006– • These policies included frameworks and recommendations for human resource
2010), the Third Industrial development, incentives, science and technology development and etc.
Masterplan (2006–2020) • Aimed to reach global competitiveness and industrial growth through
and The Knowledge-Based manufacturing and service sector innovation.
Economy Masterplan
(2002–2020)
The Second National Science • Continuation of the goals set by the previous science and technology policies
and Technology Policy with initiatives supporting a) research and technological capacity; b) research
commercialization; c) human resource capacity; d) promotion of innovation
(NSTP2) (2002–2010)
culture; e) institutional framework; f) technology absorption and diffusion; and
g) specialization.
• Increased GERD to at least 1.5 percent of GDP and have at least 60 R&D
personnel per 10,000 people in labor force.
Intellectual Property • Establishment of a common framework for intellectual property regulation

Commercialization and management at all levels through multiple scenarios for publicly funded
research projects. This includes exploitation and commercialization of
Policy for Research and
intellectual properties as well.
Development (R&D)
Projects Funded by the • Improvement of intellectual property rights in line with the National Intellectual
Property Policy.
Government of Malaysia
(2009)
National Higher Education • Establishment of Ministry of Higher Education (prior to the NHESP).
Action Plan (NHESP) (2007 • Creation of research university classification for public universities who achieve
and beyond 2020) research and innovation excellence.
• Creation of HICoE classification for ‘world class’ research centers.
• Monitoring and evaluation mechanisms in the form of MyQUEST, SETARA and
MyRA to track performance of universities in teaching, student outcomes and
research.
Annex 2: Snapshot of Main Policies around Science, Technology, R&D and Innovation in Malaysia
2010s to The Tenth Malaysia Plan • Introduction of New Economic Model and greater emphasis on knowledge and
present (2011–2015) innovative economic growth
• Reduced proportion of government funding to public universities to incentivize
industry funding and create linkages.
• Other funding mechanisms for PROs are suggested such as co-financing.
The National Policy of • Specified strategic guidelines for STI policy and investment for Malaysia’s
Science, Technology and transition to an innovation economy by 2020.
Innovation (2013–2020) • Aimed to strengthen linkages with industry, strive towards more autonomy for
(NPSTI) public universities and research institution and to establish clear guidelines and
standards to enhance commercialization of domestic innovations among many
other goals.
• Aimed to get GERD to at least 2 percent of the national GDP as well as at least
70 researchers per 10,000 labor force.
• Aimed to strengthen the management and coordination of public research.
The Eleventh Malaysia Plan • Continued budgetary pressure and strategic mandates implemented in the
(2016–2020) and The Mid- previous plans.
Term Review of the Eleventh • Streamline public sector funding for R&D&C&I projects.
Malaysia Plan (2016–2020)
• Encouragement of intermediation services to increase innovation and R&D
activities.
Higher Education • Scale up and grow in strategic research areas linked to national priorities.
Blueprint (2015–2025) • Pushed for university commercialization through establishing support systems.
Various sector specific • Each sector specific policy, strategy or plan have their own STI components.
policies involving STI incl (not • For example, the National Biotechnology Policy aims at making biotechnology
exhaustive): one of the key economic sectors of Malaysia by establishing new research
National Biotechnology Policy centers, new institutions and coordinate research and commercialization
(2005–2020) initiatives involving biotechnology.
National Strategic ICT • Other policies, strategies or plans would have differing sector specific aims and
Roadmap (2011–2020) initiatives.
National Automotive Policy.
Source: Felker and Sundaram (2007), OECD (2016), Narayan and Lai (2018) and various Malaysia Plans.
Annex 3:
Revenue Sharing Distribution of Commercialization
Activities
Malaysia adopted the Intellectual Property Commercialization Policy for Research & Development
Projects Funded by the Government of Malaysia in 2009. This is the main policy framework for IPR
ownership and commercialization at public research institutions. The policy states that research output by
differing institutions are entitled to ownership rights over inventions when the R&D projects are funded
by the government in varying scenarios. It intends to promote the management and commercialization
of research output at PROs and public universities, similar to the Bayh-Dole Act in the US. Ownerships of
IP that are publicly funded are considered over seven differing scenarios which encapsulate government
ownership, university ownership and co-ownership with third-party amongst other scenarios. It also includes
government incentives for the inventors in the form of payments with varying amounts for patent disclosures,
filing of patents and granting of patents, specifically for publicly funded IP creations. The values are MYR500,
MYR5,000 and MYR10,000 respectively. Employers are also required to share revenues collected from the
respective IPs with researchers adhering to a specific distribution (see Table below).
TABLE A2: Revenue Sharing Distribution of Commercialization Activities
Disbursable Amount Inventors Recipients
First RM250,000.00 100% 0%
Next RM250,001.00 to RM1,000,000.00 80% 20%
Next RM1,000,001.00 to RM2,500,000.00 60% 40%
Next RM2,500,001.00 to RM5,000,000.00 50% 50%
RM5,000,001.00 and above 40% 60%
Annex 4:
Questions and Classifications of Challenges and
Obstacles Faced by PROs and RCs
Institutional Failure Research and Knowledge Competences
Lack or unclear technology transfer policies at our Lack of funding for research activities
institution, including IPR policies
Lack of communication between research institutions Lack of research facilities, modern infrastructure and
and industry to align interests and collaborate tools
Lack of policies promoting collaboration between Insufficient critical mass of human capital in science and
public and private institutions technology
Legal obstacles in government employment laws Lack of funds for technology transfer activities,
or organic laws limiting interaction with industry by including proof of concept, prototype, patenting and
researchers (e.g. forbidden participation by researchers development.
in new companies or not allowing secondment or
industry fellowships)
Cultural gap between PROs and industry Research does not address the needs of industry
Inadequate national legal framework (e.g. Laws, National or local businesses lack the capability or
Policies, Regulations) absorption capacity to use research results
Lack of adequate incentives for researchers/inventors: Lack of IPR and technology management skills
careers is still mainly defined by the number of scientific
publications
Lack of support from university management Lack or inefficient technology evaluation mechanisms
(e.g. invention disclosure procedures not in place, absent
technology valuation, etc.)
References
Ab. Aziz, Kamarulzaman, Hezlin Harris, Stanley Richardson, and Nor Aziz. 2012. “Drivers for University Research
Performance: Investigating the Researchers’ Dynamics.” IBIMA Business Review 2012 (August).
Aghion, Philippe, and Peter Howitt. 1992. “A Model of Growth Through Creative Destruction.” Econometrica 60 (2):
323–51.
Akoum, Ibrahim. 2016. “Research, Development and Innovation in Malaysia: Elements of an Effective Growth Model.”
Asian Economic and Financial Review 6 (7): 390–403.
Amran, F. H., Rahman, I. K. A., Salleh, K., Ahmad, S. N. S. and Haron, N. H. (2014), “Funding trends of research universities
in Malaysia”, Procedia - Social and Behavioral Sciences, 164, 126–134.
Bakar, Ahmad Naqiyuddin, Abdul Rahman Omar, Abdul Rauf Ambali, Roseleena Jaafar, Mohd Fadzil Mohd Idris, Zulkifli
Abd Majid, and Kamarol Baharen Mohd Rom. 2016. “Commercialisation Activities in Malaysian Universities: Issues
and Challenges.” Journal of Administrative Science 13 (2).
Bercovitz, Janet, and Maryann Feldman. 2006. “Entpreprenerial Universities and Technology Transfer: A Conceptual
Framework for Understanding Knowledge-Based Economic Development.” The Journal of Technology Transfer 31
(1): 175–88.
Cirera, Xavier; Maloney, William F. 2017. The innovation paradox: developing-country capabilities and the unrealized
promise of technological catch-up. Washington, D.C.: World Bank Group. http://documents.worldbank.org/curated/
en/844101510122107327/The-innovation-paradox-developing-country-capabilities-and-the-unrealized-promise-
of-technological-catch-up.
Cornell University, INSEAD, and WIPO. 2019. “The Global Innovation Index 2019: Creating Healthy Lives—The Future of
Medical Innovation.” Ithaca, Fontainebleau, and Geneva.
Correa, Paolo and Maria Pluvia Zuniga. 2013. “Public Policies to Foster Knowledge Transfer from Public Research
Organizations.” Innovation, Technology, and Entrepreneurship Global Practice. Public Policy Brief. Washington
D.C.: World Bank.
Economic Planning Unit. 2015. “Eleventh Malaysia Plan.” Putrajaya: Prime Minister’s Department. https://www.epu.gov.
my/en/rmk/eleventh-malaysia-plan-2016-2020..
Economic Planning Unit. 2010. “Tenth Malaysia Plan.” Putrajaya: Prime Minister’s Department. https://www.epu.gov.my/
en/rmk/tenth-malaysia-plan-10th-mp.
Economic Planning Unit. 2006. “Ninth Malaysia Plan.” Putrajaya: Prime Minister’s Department. https://www.epu.gov.my/
en/rmk/ninth-malaysia-plan-2006-2010.
Economic Planning Unit. 2001. “Eighth Malaysia Plan.” Putrajaya: Prime Minister’s Department. https://www.epu.gov.
my/en/rmk/eighth-malaysia-plan-2001-2005.
Economic Planning Unit. 1996. “Seventh Malaysia Plan.” Putrajaya: Prime Minister’s Department. https://www.epu.gov.
my/en/rmk/seventh-malaysia-plan-1996-2000.
Economic Planning Unit. 1990. “Sixth Malaysia Plan.” Putrajaya: Prime Minister’s Department. https://www.epu.gov.my/
en/rmk/sixth-malaysia-plan-1990-1995.
Economic Planning Unit. 1986. “Fifth Malaysia Plan.” Putrajaya: Prime Minister’s Department. https://www.mea.gov.my/
en/rmk/fifth-malaysia-plan-1986-1990.
Felker, Greg, and Jomo Sundaram. 2007. “Technology Policy in Malaysia.” International Journal of Technological
Learning, Innovation and Development 1 (February): 153–78. https://doi.org/10.1504/IJTLID.2007.015402.
Govindaraju, V.G.R Chandran, Veera Pandiyan, and Sinnappan Santhidran. 2013. “Innovation Systems in Malaysia: A
Perspective of University-Industry R&D Collaboration.” AI & SOCIETY 29 (August). https://doi.org/10.1007/s00146-
013-0468-9.
Govindaraju, Chandran, V.G.R. 2010. “R&D Commercialization Challenges for Developing Countries: The Case of
Malaysia.” Tech Monitor, 2010.
References
Grossman, Gene M., and Elhanan Helpman. 1994. “Endogenous Innovation in the Theory of Growth.” Journal of
Economic Perspectives 8 (1): 23–44. https://doi.org/10.1257/jep.8.1.23.
Hall, Bronwyn H. 2011. “Innovation and Productivity.” Working Paper 17178. Working Paper Series. National Bureau of
Economic Research. https://doi.org/10.3386/w17178.
Intarakumnerd, Patarapong, and Akira Goto. 2018. “Role of Public Research Institutes in National Innovation Systems
in Industrialized Countries: The Cases of Fraunhofer, NIST, CSIRO, AIST, and ITRI.” Research Policy 47 (7): 1309–20.
https://doi.org/10.1016/j.respol.2018.04.011.
Ismail, Norain, Mohd Jailani Mohd Nor, and Safiah Sidek. 2017. “Challenges for Research Product Commercialisation:
A Case of Malaysian Academic Researchers.” Journal of Engineering and Applied Sciences 12 (6): 1543–50. https://
doi.org/10.3923/jeasci.2017.1543.1550.
MASTIC. 2018. “National Survey of Research and Development (R&D) in Malaysia 2017.” Putrajaya: Ministry of Science,
Technology and Innovation. https://mastic.mestecc.gov.my/sti-survey-content-spds/national-survey-research-and-
development-rd-2017.
MASTIC. 2017. “Malaysia Science, Technology and Innovation Indicators Report 2016.” Putrajaya: Ministry of Science,
Technology and Innovation. https://mastic.mestecc.gov.my/sti-survey-content-spds/malaysian-science-technology-
innovation-sti-indicators-report-2016.
Ministry of Education. 2015. “Malaysia Education Blueprint 2015-2025.” Putrajaya: Ministry of Education. https://www.
moe.gov.my/en/dasar/1207-malaysia-education-blueprint-2013-2025/file.
Mohnen, Pierre, and Bronwyn H. Hall. 2013. “Innovation and Productivity: An Update.” Eurasian Business Review 3 (1):
47–65. https://doi.org/10.14208/BF03353817.
Narayanan, Suresh, and Yew Wah Lai. 2018. “Innovation Policy in ASEAN: Innovation Policy in Malaysia.” Economic
Research Institute for ASEAN and East Asia.
NSRC. 2013. PRA Performance Evaluation: Unlocking Vast Potentials, Fast-Tracking the Future, National Science and
Research Council. UiTM Press Shah Alam.
OECD. 2018. “OECD Science, Technology and Innovation Outlook 2018: Adapting to Technological and Societal
Disruption.” Paris: OECD Publishing. https://www.oecd-ilibrary.org/content/publication/sti_in_outlook-2018-en.
OECD. 2016. OECD Reviews of Innovation Policy: Malaysia 2016. OCED Reviews of Innovation Policy. Paris: OECD
Publishing. https://www.oecd-ilibrary.org/content/publication/9789264255340-en.
OECD. 2015. Boosting Malaysia’s National Intellectual Property System for Innovation. Paris: OECD Publishing. https://
www.oecd-ilibrary.org/content/publication/9789264239227-en.
Roessner, David. J; Manrique, Lynne and Park, Jongwan. 2010. “The economic impact of engineering research centers:
Preliminary results of a pilot study.” The Journal of Technology Transfer 35(5):475-493. October 2010.
Romer, Paul M. 1990. “Endogenous Technological Change.” Journal of Political Economy 98 (5): S71–102.
Taib, Fauziah Md, and Melissa Lee Yen Ng. n.d. Governance Reforms in Public Universities of Malaysia. Penerbit USM.
Wan, Chang-Da. 2017. “Policy Paper No. 40: The History of University Autonomy in Malaysia.” Institute for Democracy
and Economic Affairs. http://www.ideas.org.my/policy-paper-no-40-history-university-autonomy-malaysia/.
WIPO (2011). “The State of Patenting at Research Institutions in Developing Countries: Policy Approaches and Practices”
Working Paper No. 4. WIPO Economic Research Working Papers.
World Bank (2020), Boosting Competitiveness Chapter in the Forthcoming Report: Aiming High: Navigating the Next
Stage of Malaysia’s Development”, 2020.
Yaakub, N. I., Hussain, W. M. H. W., Rahman, M. N. A., Zainol, Z. A., Mujani, W. K., Jamsari, E. A., … Jusoff, K. (2011),
“Challenges for commercialization of university research for agricultural based invention”, World Applied Sciences
Journal, 12(2), 132–138.
Zuniga, Maria Pluvia (2020). The Impact of Public Research Institutions through Technology Transfer Activities: A New
Survey and Performance Framework. World Bank Technical Papers, forthcoming.
CONNECT WITH US
wbg.org/Malaysia
@WorldBankMalaysia
@WB_AsiaPacific
http://bit.ly/WB_blogsMY

Assessing The Effectiveness of Public Research Institutions Fostering Knowledge Linkages and Transferring Technology in Malaysia

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Assessing The Effectiveness of Public Research Institutions Fostering Knowledge Linkages and Transferring Technology in Malaysia

Uploaded by

Copyright:

Available Formats

Public Disclosure Authorized

FINANCE, COMPETITIVENESS AND

OCTOBER 2020 THE MALAYSIA DEVELOPMENT EXPERIENCE SERIES

Transferring Technology in Malaysia

FINANCE, COMPETITIVENESS AND INNOVATION

Nothing herein shall constitute or be considered to be a limitation upon or waiver of the

Chapter 1. Introduction and Objective 16

Figure 2. Proportion of R&D Expenditure by Sector and GERD (percentage of GDP) 27

Figure 3. International Comparison of R&D Intensity (GERD as a percentage of GDP) 27

Figure 4. Source of R&D Funds (2016) 27

Figure 5. GERD by Research Orientation (2014-2016) 28

Figure 6. Research Orientation by Sectors (2016) - R&D Expenditure RM Millions 28

Figure 7. R&D Staff by Functions (2014-2016) 29

Figure 8. Proportion of Researchers by Qualification (2016) 29

Figure 9. Proportion of Researchers (FTE) by Sectors (2016) 29

Figure 10. Evolution of Scientific Production (Number of Peer-Reviewed Publications) 31

Figure 11. Share of International Collaborations among Scientific Publications 31

Figure 13. Distribution of Intellectual Property Outputs 31

Figure 14. Sources of Funding, Proportion of Total Expenditure in 2018 37

Figure 15. Average Sources of Funding for PROs and RCs 37

Figure 20. Availability of Research and Academic Incentives for PROs 44

Figure 21. Availability of Research and Academic Incentives for RCs 44

Figure 22. Support by Technology Transfer Offices for PROs 46

Figure 23. Technology Transfer Support Priority Areas for PROs 47

Figure 24. Technology Transfer Support Priority Areas for RCs 47

Box 2. Roles of PROs in a Time of Crisis: Responses to the COVID-19 Crisis 34

Box 3. Complex Landscape of R&D Funding and Policy Agencies in Malaysia 42

Box 4. Science and Innovation for Businesses, Environment and Communities 51

Box 5. Leading the Way for Palm Oil Research 52

Box 6. Facilitating Collaboration Between the Government, Industry and Academia 65

CLG Company Limited by Guarantee

CoE Center of Excellence

COVID-19 Coronavirus Disease 2019

EPU Economic Planning Unit

FRI Fisheries Research Institute

FTE Full-Time Equivalent

GDP Gross Domestic Product

GLCs Government Linked Companies

GERD Gross Expenditure on Research and Development

HEI Higher Education Institution

HICoE Higher Institute Center of Excellence

IMR Institute for Medical Research

IPR Intellectual Property Rights

MARDI Malaysian Agricultural Research and Development Institute

MARii Malaysia Automotive, Robotics & IoT Institute

MASTIC Malaysia Science and Technology Information Center

MEBHE Malaysian Education Blueprint (Higher Education)

MGI Malaysian Genome Institute

MIMOS Malaysian Institute of Microelectronic Systems

MITI Ministry of International Trade and Industry

MOA Ministry of Agriculture and Food Industries

MOE Ministry of Education

MOH Ministry of Health

MoHE Ministry of Higher Education

MOSTI Ministry of Science, Technology and Innovation

MPOB Malaysian Palm Oil Board

MTIB Malaysian Timber Industry Board

MyIPO Intellectual Property Corporation of Malaysia

NHESP National Higher Education Strategic Plan

NIPP National Intellectual Property Policy

NPSTI National Policy on Science, Technology and Innovation

NSTP1 First National Science and Technology Policy

NSTP2 Second National Science and Technology Policy