Universiti Malaya High Impact Research Department consultant Professor Datuk Dr Lam Sai Kit (right) at work. Malaysia has relied heavily on the role of the public sector in aiding economic growth through fiscal incentives and R&D. Pic by Rosela Ismail

A RECENT trip to Barcelona, Spain, for the global mobile technology exhibition sends a strong message in me that the only way for Malaysia to reach higher income levels is by greater infusion of technology in our national economic development. There appears to be no other path.

The likes of Huawei, Sony and Samsung, displaying their products in mobile technology and their applications, in meeting consumer needs, commercial development, and overall value engineering, illustrate how far their countries have invested in technology development and in positioning their corporate interests in line with the global quality of life, trade and investments. Perhaps it is not an exaggeration that they lead growth in these areas and are therefore able to command a larger market share of product development, especially in the early stages of market growth, when products are in various stages of novelty.

This, is in fact, the result of investing significantly in intellectual capital development through painstaking efforts in research and development (R&D). In this regard, their corporate sector bodies have immersed themselves in R&D activities for so long, having realised that their fate and future are intertwined with technology development and their position in that technology trajectory.

The environment and ecosystem for such activities in those countries, such as patent registration, are so conducive that thousands of intellectual properties are being churned out in Japan, South Korea, China, Taiwan, as well as the United States and Europe.

Herein lies our differences with those countries. Ours has relied heavily on the role of the public sector in aiding economic growth through fiscal incentives and R&D activities, and in initiating social and economic development so as to spur and spawn related and downstream commercial activities. Thus the public sector investments in fixed capital formation, such as in airports and ports, bridges and highways, hospitals and schools, help push commercial and investment activities through derived and indirect demand and multiplier effects. Therefore, do not overly blame the public sector for the fiscal deficit.

Public sector activities in R&D in the past have concentrated on rubber and palm oil research, and fundamental research is done largely by public universities. These researches have assisted in our agricultural diversification and, to a certain extent, our initial industrialisation. However, moving forward, we have to invest in extensive industrial research to position ourselves in the unfolding technology path combining engineering, medicine, biology, and communication and information technology.

Where are we in this grand scheme of things? Hopefully, I am wrong: we seem not to be there. Where did we go wrong? It is quite frightening indeed to see the tremendous interest in technology in those countries compared with ours.

Our adults are so engrossed with politicking, our young with entertainment, our private sector does not want to contribute to national intellectual capital development and in R&D activities, our civil service heavily concerned with procedures, with 70 per cent of public sector allocations in operating expenses, while our scientists get little social recognition. We just do not have the ecosystem that will support long-term economic growth through intellectual capital and asset development that engineers values and wealth.

We have, however, been able to ride over past challenges given our right economic policies such as agricultural diversification, infrastructural investments, export orientation, concern for health and public education, and last but not least, in the availability of oil deposits along our shores. The previous leadership has been able to harness these assets to raise our income levels. Moving forward is competition and command for technology.

Needless to say, the future is definitely of economic and social development based on technology. Perhaps the social leadership has to sit back and reflect on the long-term challenges we are facing and the need for strong policy engineering that will put the nation on track for long-term economic resilience and survival.

In this context there is no other way except to move our human capital in the way that facilitates technological infusion and, at the societal level, a strong interest in science and technology. The new blueprint on higher education is a good starting point to address this concern in greater depth, while it is being rolled out now.

A few related questions need to be addressed. First is the role of the private sector in R&D; second, how can we realign our public or civil service towards a culture of knowledge and technological development consistent with long-term economic resilience and survival, and how we can overcome our social malaise so as to infuse a culture respecting and appreciating science and technology, especially among our youths and young.

Finally, how we mobilise our social and community leaders, the religious scholars (ulama) included, to help understand, in a right perspective, the challenges we are facing in our quest for long term economic and social resilience and survival.

A meeting of minds, a greater social consensus, is essential for this to take place. However, for a start, we have to address the many social and political problems that we have now, brought about by too much politicking. Our leaders of all races and walks of life have to set aside narrow minded interests, and take this more important long-term social challenge.

The writer is chairman of the Malaysian Institute of Economic Research

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