Innovation and Commercialization: Malaysia Perspective

2015/HLPD-STHE/009 Session 4 Innovation and Commercialization: Malaysia Perspective Purpose: Information Submitted by: Malaysia High Level Policy Dialogue on Science and Technology in Manila, Philippines 13-14 August 2015

GOVERNMENT ACADEMIA INDUSTRY COMMUNITY 1 st APEC High Level Policy Dialogue on Science and Technology in Innovation and Commercialisation: Malaysia Perspective 13 th to 14 th August 2015 Philippine International Convention Centre Dr. Arham Abdullah Director I n dustry Relation Division Hi gher Education Department Mi nistry of Malaysia 0 1 2 3 Wave Wave Wave 2013 2015 2020 Build momentum and lay foundations Accelerate system improvement 2025 Move towards excellence with increased operational flexibility 1

3 Outline Stages of economy in Asia How can Higher education help move the innovation economy agenda of the country? Are we there yet? Innovation ecosystem R&D towards commercialization: Paradigm shift 4 2

Stages of Economy in Asia Resource -driven economy Rubber, palm oil etc Investment -driven economy Multinationals at free trade zones Innovation -driven economy Knowledge based From Resource-driven to Innovation-driven 5 Role and expectations of Universities in the globalised economy Empower values-driven talents to be actionoriented leaders who deliver solutions that ensure sustainability of change Generate Knowledge Provide Science solutions Through Real-World Experiences Engine of growth for the nation Translate knowledge via commercialization (Value Creation of of R&D products Technology knowledge Through and development Innovation & Management of K based enterprises Entrepreneurship) Disseminate Knowledge Train innovators of tomorrow Curriculum that creates entrepreneurs to participate in Startups Graduates that job creators rather than job seekers Graduates that cares about humanity 6 3

Expectations of Modern Universities in the Innovation Economy We are expected to go through R D C E- Community engagement (to help humanity and create wealth for the country) as SOLUTION PROVIDERS Brains to Business to Humanity 7 Innovation drives Economic Success The assets that drive economic success: Patents (indicate that research findings are industrially applicable) Advanced research Assets that drive Venture capital economic success University graduates and Ph.D.s are in IHLs and RIs Air, Rail and Sea hubs *Source: Bruce Katz, TIME Magazine, 21 st Oct 2010 8 4

How serious is a country about its R&D and the Innovation economy? Political Will The need to develop innovative talents Allocation of GDP for Research Allocation of Research grants 9 Political Will 9 th Malaysia Plan : Government committed RM 1.363 billion FRGS : RM285 million Implementing RUs : RM1.06 billion to Establish and maintain HiCoEs : RM18 million 10 th Malaysia plan : Secured RM 2.388 billion Implement FRGS : RM1.539 billion RUs : RM800 million HiCoEs : RM49.3 million Malaysia has the political will to ensure that R&D is the national agenda to drive the K-economy of the country Ranked 35 th out of 60 countries for having 1.07% gross expenditure on R&D Technofund and Innovation funds are also allocated to promote commercialization of research products 10 5

Moving Towards Successful New Economy: R&D Challenge R D Should see a smooth and continuous flow of R-D-C-E PHASE 1 Phase 1: Consolidating Research Making scientific discoveries Research discoveries, acquisition of technologies C Phase 2: Consolidating Development Design, engineering and technology integration E Phase 3: Consolidating Commercialization Patent, Marketing, Entrepreneurship and licensing Phase 4: Consolidating Knowledge-based enterprise (Research Park) Spin off companies/ JV companies PHASE 2 Develop prototype PHASE 3 Commercialize PHASE 4 K-enterprise 11 Reality check: Status of R&D in Malaysia R Phase 1: Consolidating Research D Phase 2: Consolidating Development C WHY are we not there yet? Phase 3: Consolidating Commercialization/Innovation/Technology licencing Commercial arm of the University E??? Entrepreneurship Spin-off companies JV Companies Licensing Phase 4: Enterprises 12 6

Commercialization of research products Commercialization of R&D products is not a simple process Latest figures showed that among Malaysian Public Universities, commercialization of local R&D products at 5.1 % in 6 th and 7 th Malaysia Plan (MP), 3.4% in 8 th MP.Done mainly through consultation, licensing and entrepreneurship It is linked with the innovation ecosystem country. of the 13 Why are we not there yet? Quality of Innovative Human resource Curriculum lacks elements of creativity & innovation Limited pioneer mindset capability Supply of Innovative Human Resource Need 70 RSE per 10,000 workforce to be a developed nation. Current status: 57 RSE per 10,000 workforce Insufficient number of postgraduates Brain drain due to weak strategies to retain talent Moving idea to The- Market-Place Weak internal ecosystem for innovation Low number of IPs and commercialization efforts Insufficient precommercialization grants Limited entrepreneurial skills and business know-how Limited communication between academia and industry Absence of full-fledged incubator facilities 14 7

Why are we not there yet? Poor academia-industry relationship and hence companies do not deal very much with universities / Our dateline for deliverables are elastic. REASONS MNCs do little RND with universities here since they are very dependent on their mother country. Perception of industry to the universities needs to change. Universities are not collaborating with the industry fast enough 15 Why are we not there yet? SMEs lack the resources and rarely involve itself in R&D Majority of IP filed in Malaysia is owned by foreign multinationals Academic patents are early stage technological developments which is usually characterized by market uncertainty Industries want incremental improvements and university is providing Blue sky research findings and discoveries. (MISMATCH) Progress in IP filed and attained is low. Weak academia-industry relationship since commercial arm and TLO are run by academics 8

CURRENT STATE OF HIGHER EDUCATION The Universitas 21 report provides an assessment of Higher Education in 50 countries across four dimensions PRELIMINARY Rank out of 50 countries 1 RESOURCES Asian Neighbours Global Benchmarks Malaysia Singapore Thailand Indonesia Hong Kong South Korea USA UK Australia TYPE OF METRICS USED 12 2 3 ENVIRONMENT CONNECTIVITY 26 35 4 OUTPUT 44 OVERALL 28 9 11 5 19 10 47 30 30 47 42 50 37 25 50 48 19 4 7 23 15 18 39 32 18 21 4 3 15 1 1 21 16 3 2 8 16 8 8 6 9 Government expenditure, investments, R&D Qualitative assessment of policy and regulatory environment Collaboration globally and with industry International student enrolment Research output Institution rankings Enrolment Employability Average score of the four categories U21 Report: 28 th Rank is expected for Malaysia s income level SOURCE: Annual report by Universitas 21, a global network of research universities for the 21 st century with 26 members that enroll over 1.3 million students and employ over 220,000 staff and faculty. The U21 Index compares national systems for 50 countries 11 Addressing the gaps: the need for paradigm shifts 18 9

Create the Right Ecosystem for an Innovative Society Government Industry Innovative Society Ventures Innovation Ecosystem Education Each component must move in harmony to complement and synergize the efforts of the others. 19 10 Shifts Inovasion Ecosystem 1 2 3 4 5 6 8 9 10 7 Lingkaran Empat Pihak Quadruple Helix Kerajaan Universiti Industri Komuniti Government Universities Industry Community PPRN Public Private Research Network Establishing Support Systems for the Commercialisation of Ideas ITMA; MyInnovationHub, Steinbeis Transfer Center CREST Collaborative Research in Engineering Science and Technology 10

Challenge to Enhance Commercialization : Need for Paradigm Shift Commercialization is the ability to provide solution to a need that can generate income. The solution is called an invention. Only when it has been commercialised is it called an innovation. How we provide the solution can be seen in 2 forms: University-driven (providing solution to either society or industry by researchers; initiated by the researcher ), create IPRS, spin-off companies, talents for nation building, competitive edge in K economy Demand driven (providing solution to industries: initiated by industries) Both ways are known as commercialization of ideas or 21 solution providers Commercialisation of Ideas (Solution Providers) Knowledge Workers Training Publications Commercialisation of Ideas Consultation Intellectual Property Products Services/ Solution Providers Contract Research 22 11

Innovation ecosystem Commercialization is everybody s job University = Solution providers Who s job is it to commercialize? Malaysia needs to transform from a traditional, government-led, commodities-driven economy into a knowledge-centric economy. Innovation ecosystems are essential to such knowledge-based growth. 23 PUBLIC-PRIVATE RESEARCH NETWORK (PPRN) Public-Private Research Network (PPRN) is a new initiative by Ministry of (MOHE) as one of the strategies to increase productivity and strengthen Malaysian economic development through innovation and commercialization programs. 24 12

Public-Private Research Network (PPRN) Focus on demand driven research, via PPRN to provide solutions to SMEs PPRN This is done to facilitate meeting with industries by design and no longer by chance. The collaboration will move the companies up the value chain and enhance the bringing of solution to the market place. 25 Public-Private Research Network (PPRN) - Service/Solution Providers Industries (NKEAs) PALM OIL FINANCIAL SERVICES TOURISM BUSINESS SERVICES ELECTRONICS & ELECTRICAL WHOLESALE AND RETAIL EDUCATION HEALTHCARE COMMUNICATION CONTENT AND INFRASTRUCTURE AGRICULTURE GREATER KUALA LUMPUR (GLC, MNC, SME) (MIGHT Nano Malaysia CREST etc.) Problem Definition Process Project A Project B Project C PUBLIC PRIVATE RESEARCH NETWORK (MTDC/SME CORP/MIDA/MOE) Technology Based Project Funded by Matching Grant from Company and Government Agencies Bidding Process Criteria Duration Relevance Technical value of the solution Experience of the research team Encourage Institution collaboration Cost Win2 Projects Academia Universities/Research Institutes Expertise 20 IPTAs, 59 IPTSs, Majlis Profesor Negara, HiCOE, ICoE, Tech Transfer Offices 16 Research Institute (SIRIM, IMR, FRIM, MPOB, MINT, MIMOS etc. PPRN is a quick win platform to drive the A I collaboration through knowledge and technology transfer program. The problem must be driven by industry or market and using the top down concept where the Universities or Research Institute must bid for the identified project The funding will come from the matching grant from the Industry/Company and the Government Agencies The program will increase the Commercialization of Ideas with the collaboration between Academia and Industry 9 projects took off in Jun 2014 worth RM216k. 100 more worth RM3m took off in November, 1000 Projects in 2015 13

RETURN ON RESEARCH INVESTMENT (2007-2014) RM5.1 billion (2007 2014) Grant spent / patent RM704K Grant spent / (patent & IP) RM408K Ratio commercialized product (306) : patent (7,234) 1:23 (4.2%) Cost per commercialized product RM17m Grant spent / publication RM46k 115, 668 PhD and Masters produced (2013) RM 37,175/ student Total *Revenue of 20 IPTAs RM 6.56 billion (2007 2014) NRU = RM1.23B Total RU funding RM 3.54 billion (2007 2014) Total RU *revenue RM 5.33 billion (2007 2014) Sumber : emyra 28.6% ROI 50.6% ROI Revenue from commercialization and technology licensing RM31mil (5RUs; 2010-2014) Cumulative minimum RM 48.6 million (up to 2013) * Income generated including courses, training, services, consultancies, PG students registration fees, gifts and endowment 27 Commercialization (2007-2014) Total IPs : 7,234 for 20 HLI s 4.2% commercialization success rate Commercialize project by 20 HLI s for RMK 9 and RMK 10 : 306 by the definition of - Total of commercialize new product (produce income) Low ROI Total licensed knowledge technology (technology know-how) 28 14

Talking about ROI In USA, commercialization of R&D provided a low ROI. Invested USD 147 billion in research with USD 90 billion going to the universities but generated around 5-10% return on investment. Problem is that we are too focused on numbers and not really on the impact of the patent to the marketplace. There is a need to come out with new measurements and indicators. A better metrics on technology transfer is needed. We need to measure the bigger picture of the technology transferred eg Korean model. 29 RM5.33 Billion(solution provider) RU as the Engine for Wealth Creation RM3.54 Billion investment RM 31 Million (comm of R&D product Wealth Creation (2010 2020) projected Key Contributors Jobs creation 1 182,720 Allocated for RU (2007 2011) Source : 1 NKEA, 2010, 2 RU Data Compilation, 2012 Generated Revenue (2007 2011) 30 15

Way forward Government has to look on commercialization Ideas rather than focusing on commercialization of R&D products. Not all IPs can be commercialised due to mismatch with industry capability. Most training, consultancy and research contracts have been executed together with the help of industry to increase the value chain of the sector. There is a need to evaluate the impact to the sector. There is a need to look and evaluate the bigger picture of the technology transferred and not just concentrate on the number counts. 31 Higher Education 16

7 TH APRIL 2015 10 LONJAKAN Talent Excellence 1 3 4 5 6 7 8 9 10 2 I II III IV Empat Laluan Kerjaya (Four Career Path) Pendidik Penyelidik Pemimpin Institusi Pengamal Profesional (Educators) (Researchers) (Leaders) (Practitioners) Program Fakulti CEO (CEO Faculty) 17

Higher Education Mode of Engagement MODE 1 MODE 2 The CEO will Co teaching with a Professor on a particular subject at one selected Host University. The CEO will conduct Keynote Address/Public Lecture/Motivational Talk/Seminar/Advisory Panel etc. at Host and several Affiliate University Guest Speaker Invitation by MOHE (Minister): Dr. Richard Parker (Group Director of Research & Technology) Rolls Royce) (UPM) Dato Yasmin Mahmood (CEO MDEC) (UTM) Alois Hofbauer, Nestle (Malaysia) Berhad Managing Director (UIAM) Higher Education CEOs Matching Ta n Sri (Dr.) Tony Fernandes Ta n Sri Johan Jaafar Ta n Sri Dato Azman bin Haji Mokhtar Datuk Wei Chuan Beng YM Tengku Dato Zafrul Azizi Group CEO, Air Asia Berhad Independent Non Execitive Chairman of Media Prima Managing Director, KhazanahNational Berhad President of Redtone International Berhad Group CEO of CIMB Malaysia HOST UNIVERSITY 2015 2016 18

Higher Education CEOs Matching Dato Seri Syed Zainal Abidin Datuk Abdul Farid Alias Encik Azman Ismail Dr Abu Hasan Ismail Mr. Abraham Liu Kang CMS Cons ortium Sdn Bhd. Group CEO of Maybank Banking Berhad Managing Director, Shell Malaysia Tra di ng Sdn. Bhd. CEO of Prestariang Berhad CEO of Huawei Malaysia HOST UNIVERSITY 2015 2016 Higher Education CEOs Matching Mr. Lee Sang Hoon Mdm. Michaela Dinboeck Ms. Anna Braun Mr. Mark Chang Mun Kee Tua n Haji Ali Hassan Mohammad Hassan President, Samsung Malaysia Electronics Sdn. Bhd. President & Managing Director, Novartis Corporation President B. Braun Medical Industries Sdn. Bhd. CEO of Jobstreet.com Managing Director, Al IkhsanSdn. Bhd. HOST UNIVERSITY 2015 2016 19

Higher Education CEOs Matching Datuk Hamzah bin Kassim Dato Yusof Jusoh Datuk Mohamed AzahariKamil Adjunct. Prof. Dato Dr. Ghazali Datuk Michael Tio Group Managing Director, iagroup Sdn. Bhd. Executive Chairman of Proven Holding CEO, Asian Finance Berhad Executive Chairman of Nusantara Technologies CEO, PKT Logistcs Group Sdn. Bhd. HOST UNIVERSITY 2015 2016 Higher Education CEOs Matching Mr. O Hari Narayanan Managing Director, Motorola Solutions Malaysia Sdn. Bhd. Dato Dr. Mohd Sofi Osman Managing Director and Vice President, Altera Corporation (M) Sdn. Bhd. HOST UNIVERSITY 2015 2016 20

ACADEMIA INDUSTRY COLLABORATION Structured Internship Practical Training Industry Led Curriculum Adjunct Lecturers Industry Centre Of Excellence (ICOE) Program Ind E Zone Industry University CSR Program Scholarship Award Professional Exam Program Bridging the Gap Program Entrepreneurship Program Ta l ks, Coaching, Mentoring Research Contract Collaborative Research Agreement Clinical Tri al Agreement Utilizing Lab Facilities Research Endowment University Industry Research Centre Post Graduate Program (Masters, PhD, Eng. Doc) Industry Sabbatical Spin Off/ Startup Companies IP/Technology Licensing Incubators spaces at Science/Technology Park Co development of Universities Land Banks Academic Entrepreneurship Program Graduate Employability Research & Development Commercialization PPRN Public Private Research Network Solution Provider to Industry Industry Led Innovation Competition Academia Industry Collaboratio n University as Expert Service Provider Continuing Professional Development (CPD) Tra i ning Short Cours es Innovation Consultancy The Quadruple Helix Model A-I-C-G Framework High Income Nation by 2020 Pendidikan Berkualiti Insan Terdidik Negara Sejahtera Graduate Employability Industry Collaboration R.I.C.E and CSR Component 1: 1 Graduate 1 Industry/company Academic Industry Council Talent Matrix Pre-symbiosis Cross Fertilization A-I Program Recognition A-I Engagement AINA IND-E-ZONE Component 2: Public-Private Research Network MyAIN Malaysia Extensive Networking/ Matching Event Component 3: Energyzing Tech. Transfer Office AKEPT Training Professional Certification Innovation and Technology Managers Association Component 4: Strengthening Academia- Community Ecosystem Science/Techno logy Park ICOE CSR with Academia NBOS4 NEW ACADEMIA-INDUSTRY NETWORK (BLUE OCEAN STRATEGY) MOE/PMO/MITI/MOSTISPT-JPT/TalentCorp/MIDA/MTDC-SMECorp 21

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