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Academy of Sciences Malaysia
Level 20, West Wing, MATRADE Tower
Jalan Sultan Haji Ahmad Shah off Jalan Tuanku Abdul Halim
50480 Kuala Lumpur, Malaysia
ASM Advisory Report
Cataloguing-in-Publication Data
Perpustakaan Negara Malaysia
A catalogue record for this book is available from the National Library of Malaysia
ISBN 978-629-7712-08-6
TABLE OF CONTENTS
FOREWORD
PREFACE
ASM GLRO TASK FORCE MEMBERS
ASM ANALYSTS
LIST OF FIGURES
LIST OF TABLES
LIST OF ABBREVIATIONS
EXECUTIVE SUMMARY
CHAPTER 1: INTRODUCTION
1.1 Role of GLROs
1.2 Definition, Purpose, and Characteristics of GLROs
1.3 Role of GLROs in Driving the RDICE Ecosystem
CHAPTER 2: APPROACH AND METHODOLOGY
CHAPTER 3: GLOBAL AND NATIONAL LANDSCAPE OF GLROs
3.1 Why do countries establish GLROs and what is their nature?
3.2 State of International and Malaysian GLROs
3.2.1 Agency for Science, Technology, & Research (A*STAR), Singapore
3.2.2 Badan Riset dan Inovasi Nasional (BRIN), Indonesia
3.2.3 The Commonwealth Scientific and Industrial Research Organisation (CSIRO), Australia
3.2.4 The Fraunhofer Institute, Germany
3.2.5 Industrial Technology Research Institute (ITRI), Taiwan
3.2.6 Interuniversity Microelectronics Centre (IMEC), Belgium
3.2.7 RIKEN, Japan
3.2.8 SRI International, The US
3.3 National Landscape of GLROs
3.4 Current State of Play of GLROs
3.4.1 National Institutes of Biotechnology Malaysia (NIBM)
3.4.2 NanoMalaysia Berhad (NMB)
3.4.3 Agensi Nuklear Malaysia (ANM)
3.4.4 MIMOS Berhad
3.4.5 Malaysian Agricultural Research and Development Institute (MARDI)
3.5 Measuring Financial Position of GLRO: Traditional Approach
3.5.1 Financial Position of the Malaysian Institute of Microelectronic Systems (MIMOS)
CHAPTER 4: MEASURING RETURN ON VALUE (ROV) AND IMPACT TO THE NATIONAL DEVELOPMENT
4.1 Role of GLRO in Ensuring STIE Sovereignty
4.2 Framework for Measuring the ROV and Impact
4.3 Measuring ROV and Impact of a Malaysian GLRO - MIMOS and MIMOS STC
4.4 Conclusions
CHAPTER 5: RECOMMENDATIONS AND WAY FORWARD
5.1 GLRO Enterprise ROV (GERoV) Model
5.2 Way Forward
5.3 Sustainable Leadership for GLRO
FOREWORD
The world is experiencing unprecedented changes impacting societal, economic, environmental, and governance systems. These changes happening in simultaneity are collectively called the post-normal times and are characterised by the ‘3Cs’. ‘Complexity’ – brought upon by rapid advances in science, technology, and innovation development; ‘chaos’ – due to the everincreasing independent variables interacting in many ways in networked complex systems; and ‘contradiction’ – by the various logical inconsistencies within these complex systems. At the heart of this new era lies knowledge, catalysing a shift from production-centric economies to ones propelled by knowledge where countries compete for high-skilled knowledge-based talent that can harness advanced technologies and embrace new business models.
The trajectory of Malaysia's future rests on fostering knowledge-based, values-driven talent. Economic prosperity and societal progress now demand a departure from infrastructurefocused development, which burdens our ecosystem and planet. There is a need to transition to a humanity-centric model in nurturing the ‘right talent’ with proficiency in science, technology, and innovation (STI). The willingness and desire to learn is also central. There needs to be a shift in mindset from viewing talent development as a means of enhancing human capital—focusing solely on individuals' economic productivity—to one centred on nurturing individuals who are morally upright, values-based, and adept critical thinkers. These attributes are indispensable for navigating the complexities, uncertainties, and challenges in this new horizon.
As the nation’s Thought Leader for science, technology, innovation, and economy (STIE), the Academy of Sciences Malaysia (ASM) emphasises talent development for STIE. As such, ASM, through the Special Interest Group on Industry-Ready Talent (SIGIRT), produced this position paper on ‘Nurturing Next-Generation Talent for a Knowledge-Based, Values-Driven Development’ to put forward comprehensive insights into the landscape of post-secondary education, workforce dynamics, emerging trends in talent cultivation, and transformative recommendations.
I want to take this opportunity to congratulate our Special Interest Group on Industry-Ready Talent under the joint leadership of Professor Dato’ Ir Dr Abdul Rahman Mohamed FASc, Professor Dr Mahendhiran Sanggaran Nair FASc, and Dr Shahidah Mohd Shariff FASc on formulating this position paper. This paper captures insights from stakeholders that have been synthesised into recommendations. I believe that the inputs from this position paper will catalyse a shift from a business-as-usual approach to a ‘by-design’ approach for developing knowledge-based, valuesdriven talent.
Academician Datuk Dr Tengku Mohd Azzman Shariffadeen FASc President of the Academy of Sciences Malaysia &wSTI Advisor to the Prime Minister and the Nation
PREFACE
The New Business Model for Government-Linked Research Organisations (GLRO) report provides strategic recommendations to enhance the performance and financial sustainability of GLROs within Malaysia’s Science, Technology, Innovation, and Economy (STIE) ecosystem. GLROs play a crucial role in driving Malaysia’s innovation and economic growth. This report addresses key challenges such as leadership, financial sustainability, and strategic relevance, offering solutions to strengthen GLROs as vital contributors to the nation’s future.
This report focuses on six key GLROs in Malaysia and benchmarks them against international counterparts. We evaluate their roles, structures, and financial models, examining how they contribute to the broader Research Development, Innovation, Commercialisation, and Economy (RDICE) ecosystem. We aim to propose a comprehensive business model that enhances the Return on Value (ROV) for GLROs. This includes identifying pathways for financial sustainability and offering recommendations to ensure their long-term impact on the nation’s innovation agenda.
The significance of this report lies in addressing critical gaps in the current GLRO framework. By focusing on their ability to contribute to Malaysia’s STIE sovereignty and national development, we aim to position GLROs as essential partners in creating a better future for all Malaysians. This report was developed through extensive desktop analysis, Focus Group Discussions (FGDs), and stakeholder interviews, engaging over 90 individuals from government, industry, and academia. Global benchmarking efforts further refined our recommendations, ensuring a robust and informed approach.
We would like to express our heartfelt gratitude to the Task Force for the New Business Model for GLROs for their invaluable contributions. Your dedication, insights, and collaboration made this report possible. We also extend special thanks to the policymakers, industry leaders, and academic experts who shared their knowledge and perspectives during our Focus Group Discussions. It is through the collective effort of these brilliant minds that this report was shaped.
As we present this report, we hope it serves as more than just a guide. We hope it reflects the collective vision, commitment, and heart of everyone involved in shaping the future of GLROs in Malaysia. Our aspiration is for these organisations to continue making meaningful impacts, not just for the advancement of science and innovation, but for the benefit of society and the well-being of future generations.
ASM GLRO TASK FORCE MEMBERS
ADVISOR
YM Academician Datuk Dr Tengku Mohd Azzman Shariffadeen FASc
CO-CHAIRS
• Professor Dr Mahendhiran Sanggaran Nair FASc
• Professor Dr Mohamad Kamal Hj Harun FASc
TASK FORCE MEMBERS
1. Professor Dr Pervaiz K Ahmed
2. Professor Dr Santha Vaithilingam
3. Dato' Dr Kamarudin Ab Malek FASc
4. Dato' Dr Jalaluddin Harun FASc
5. Dr Zainal Ariffin Ahmad FASc
6. Dr Nur Aainaa Syafini
7. Pn Nur Asikin Hassan
8. Professor Dato’ Dr Ahmad Ibrahim FASc
9. Professor Dato’ Dr Aishah Bidin FASc
10. Professor Ir Dr Denny Ng Kok Sum
11. Yeng Hong Qing
12. Eve Loo Yeen Chenng
13. Naqiuddin Naqib Mohamad Khairri
ASM ANALYSTS
1. Nitia Samuel
2. Muhammad Haikal Hikmal Hazam
3. Nurul Rahimah Abu Bakar
4. Amira Aqilah Shaidin
5. Mohamad Hasril Abd Hamid
LIST OF FIGURES
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Methodology of Study
Framework to Characterise the STI Ecosystem
Six Dimensions of Sustainable Impact (ROV) of the GLRO
Dynamic Capabilities Components
Sustainable Development of the GLRO Ecosystem
Mapping of Global GLROs
Innovation Linkages Score for Selected Countries, 2013 to 2022
University and Industry R&D Collaboration for Selected Countries, 2013 to 2022
State of Cluster Development and Depth for Selected Countries, 2013 to 2022
BRIN’s Funding Source and Percentage of Total Funds and Realisation in 2022
Financial of CSIRO from 2017 to 2021
Revenue of Fraunhofer from Contract Research from 2018 to 2022
Funding Share of Fraunhofer in Percentage from 2018 to 2022
Value-Driven Function of Global GLROs
R&D Funding Sources for PROs based on Total R&D Expenditure (2018)
Average Sources of Funding for PROs and RCs
Predisposition of GLROs and RCs in Technology Transfer Activities (2017–2018)
Median of Technology Transfer Activities per FTE of GLROs and RCs (2017–2018)
The Breakdown of Public Good Technologies based on MARDI’s Agrifood Clusters
Financial Position of MIMOS
Relationship between GLROs, STIE Sovereignty and Sustainable Development
Gaps in the GLRO ecosystem, Lock-In to Foreign STIE & Challenges for the Nation
Return-on-Value (ROV) Transmission Mechanism
Role of GLRO in Generating Shared Ecosystem Value
Negative Externalities - GLROs Crowding-Out Impact on the STIE Ecosystem
Return on Value Dimensions
Key Metrics for Capturing Tangible and Intangible ROV Impact
Key Metrics and Value Estimation Guide for Creative Talent
Key Metrics and Value Estimation Guide for Generation of New Knowledge
Key Metrics and Value Estimation Guide for Knowledge Networks & Value Chains
Key Metrics and Value Estimation Guide for Wealth Creation
Key Metrics and Value Estimation Guide for Societal Development
Key Metrics and Value Estimation Guide for Branding & Positioning
Key Metrics to Measure ROV of MIMOS and STC
Main Contributors to MIMOS’ ROV
Estimated Total ROV generated by MIMOS
Main Contributors to STC’s ROV
Estimated Total ROV generated by STC
Transcending the “STI Valley of Death”
The GLRO Enterprise ROV (GERoV) Model
Role of GLRO in the National STIE Ecosystem - Sustainable Collaborative Network
LIST OF TABLES
Table 1:
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A*STAR Key Performance Indicators
Fund Allocation and Realisation in 2022 of BRIN
National Level Targets from 2020 to 2045 of BRINa
Yearly Statement of Comprehensive Income, 2018 – 2022 (Million NTD)
Global Benchmarking of GLROs
Local Benchmarking on Types of GLROs
The Vision, Mission, Manpower, Revenue and Notable Products of the Three Research Institutes under NIBM
LIST OF ABBREVIATIONS
ANM
A*STAR
BATAN
BPPT
BRIN
CRM
CLBG
CLBS
CSIRO
UNCTAD
FGD
GDP
GERD
GERoV
GLC
GLRO
GRI
IHL
IMEC
ITRI
LAPAN
LIPI
MARDI
MASTIC
MNC
NGO
NIBM
PPP
R&D
RDICE
ROI
ROV
SME
USA
Agensi Nuklear Malaysia
Agency for Science, Technology & Research
National Nuclear Energy Agency of Indonesia
Agency for the Assessment and Application of Technology
Badan Riset dan Inovasi Nasional
Cancer Research Malaysia
Company Limited by Guarantee
Company Limited by Shares
Commonwealth Scientific and Industrial Research Organisation
United Nations Conference on Trade and Development
Focus Group Discussion
Gross Domestic Product
Gross Expenditure On R&D
GLRO Enterprise Return on Value Model
Government-Linked Company
Government-Linked Research Organisation
Government Research Institutes
Institutes Of Higher Learning
Interuniversity Microelectronics Centre
Industrial Technology Research Institute
National Institute of Aeronautics and Space
Indonesian Institute of Sciences
Malaysian Agricultural Research and Development Institute
Malaysian Science & Technology Information Centre
Multinational Corporation
Non-Governmental Organisation
National Institutes of Biotechnology Malaysia
Purchasing Power Parity
Research and Development
Research, Development, Innovation, Commercialisation and Economy
Return on Investment
Return on Value
Small And Medium Enterprise
United States of America
EXECUTIVE SUMMARY
Government-Linked Research Organisations (GLROs) are key government agencies that ensure a nation's science, technology, innovation, and economy (STIE) sovereignty. This is to ensure adequate local science, technology, and innovation (STI) development and that the nation is less reliant on foreign STIs for the national development agenda. These include protecting national security, economic security, environmental sustainability, and societal development of the nation.
The key roles of GLROs are to foster strong innovation linkages, university-industry collaborations, and industrial cluster development in an economy. They play a central role in translating fundamental research and development (R&D) into applications that have commercial value. This report reviewed the role of GLROs in several developed countries and Malaysia. This study found that contributions to developing strong innovation linkages, university-industry collaboration and state of cluster development in Malaysia are relatively low compared to many developed countries. Among the key challenges faced by Malaysian GLROs are as follows:
• Lack of leadership in balancing their role in undertaking R&D activities, STI entrepreneurship (local industry development), and making broader contributions to the ecosystem development – contribute to the development of other players in the ecosystem such as universities (researchers and students), other research institutions, industries (especially micro and SMEs), the diverse communities across the country, government agencies, and policymakers.
• There is a lack of cohesive direction (“big picture thinking”) among GLROs in examining their role in the context of the entire research, development, innovation, commercialisation, and economic (RDICE) value chain. Many GLROs operate in silos and are unable to create and capture the multiplier impact and network externalities in an increasingly converging STI platform environment. This has led to many missed opportunities for Malaysia to provide leadership in several STIE areas in the region and globally.
• Many GLROs focus on deriving return on investment (ROI) and, as such, focus on short-term outcomes of increasing profitability instead of deriving return on value (ROV) for the other players in the RDICE ecosystem.
• Many GLROs compete for talent, resources, and markets with industry players and other research institutions and, as such, do not see themselves as a “public good” to nurture the dynamic
capability (absorptive, adaptive, and innovative capabilities) of all players in the ecosystem.
• The financial model of GLROs is not appropriate to ensure the entities serve as a “public good” for the local RDICE value chain. Instead, many pursue strategies to maximise their profits, which leads them to “crowding out” other research institutions/ universities for national research grants and industries for market share. The ‘crowding-out’ factor leads to a lack of trust between GLROs and other research institutions/universities and industry players. This leads to fragmentation of the RDICE value chain; all players are unable to capture greater ROV from multiplier impact through collaborative partnerships.
• Due to limited external funding opportunities, GLROs depend highly on government funding. Hence, fluctuation in the annual national budget hinders sustained funding and growth of GLROs development, research outcomes and impact. This has an adverse impact on sustaining national STIE development and the competitiveness of local industries.
• There is a lack of policy research undertaken by GLROs, including foresighting and forecasting new STIs and their impact on key economic and industrial sectors of the nation. As such, many of the STIs developed by GLROs do not meet the needs of the industry or are outdated.
• The fragmentation in the RDICE ecosystem due to weakness in the GRLO business model has resulted in very low translation of local R&D from universities and other research institutions into viable commercialisation activities.
• Weaknesses in the GLRO ecosystem have led to a “lock-in” culture (high dependence) of local industries on foreign players for STI to improve their products and services. Hence, many Malaysian industries do not invest in local R&D and operate at the lower end of the STI value chain. Many compete on cheaper prices, as opposed to quality and design sophistication.
• The “lock-in” culture threatens the STIE sovereignty of the nation. This has an adverse impact on the nation's national, economic, social, and political security.
To strengthen the role of GLROs in the RDICE ecosystem and for these entities to play a pivotal role in ensuring the STIE sovereignty of the nation and creating a dynamic RDICE ecosystem, the following were recommended in the report:
• Develop a GLRO enterprise return on value model (called the GERoV), which closes the “STI Valley of Death gaps ”. These include identifying key stakeholders in the ecosystem and the value propositions (ROVs) GLROs bring to each of the stakeholders in the ecosystem; ensuring clear channels of translational R&D and commercialisation activities; managing stakeholder relationships to derive the best value proposition for all players in the ecosystem; ensuring sustainable financial model (mixture of government funding and other external sources of funding); and become key resource centres for other researchers in the ecosystem (access to expertise, advanced research facilities, training services and foresight of future STI trends for policy-makers and industry).
• Provide continuous government support, policy consistencies and long-term investments to enhance the competitiveness of the GLROs. These include the following: putting in place dedicated operational funding for GLROs; aligning them to address the national priorities and futureproof the national priority areas; assisting the development of sectoral-based research areas that contribute to the competitiveness of local industries and socioeconomic development of the nation; and expand the roles of GLROs to undertake foresight and sign-posting activities to future-proof the national development agenda.
• Enhance the governance structure of the GLROs to include transformative leadership and promote institutional integrity through the diversification of the GLRO board. This is to nurture a more collaborative and dynamic board that will enable the GLRO to make significant contributions to all stakeholders in the RDICE ecosystem.
• Empower the Research Management Agency (RMA) in appointing and monitoring the board members of the GLROs. The board of the GLROs should have the leadership to future-proof the GLROs, reduce duplication of functions, and increase their contribution to national development.
• Integrate and harmonise the planning and activities of GLROs in the RDICE ecosystem. These include forming a “consortium of GLROs” with commercial and research leaders to have a stronger voice in nurturing a dynamic, vibrant and value-creating RDICE ecosystem. These include reducing duplication of activities and optimally using resources in the country to create high ROV for all stakeholders in the ecosystem.
• Cultivate a high-performance and knowledge-sharing culture among GLROs. In this context, performance assessment metrics should be formulated based on an ROV-driven framework for the GLROs and all levels of staff in the GLROs.
• Attract, develop, engage, and retain worldclass talent to service the current and future needs of GLROs. Put holistic talent management plans in place, which will nurture next-generation creative talent, develop a sustainable career development plan, and introduce a talent mobility strategy across the different GLROs, universities and industries. All of these will provide good career opportunities for current and future talent and retain them in Malaysia.
In summary, this report highlights that GLROs are key “trust partners” for fostering strong collaborative partnerships among all stakeholders in the RDICE ecosystem. Collaborative partnerships are important for translating fundamental R&D into applied R&D that has commercial value and enhances ROV for all stakeholders in the ecosystem. The GLROs are critical for nurturing local R&D activities, jobs, and industries, as well as ensuring the nation's STIE sovereignty. That is, the nation becomes more self-sufficient in developing indigenous STIs to meet its strategic development goals.
CHAPTER 1
INTRODUCTION
Role of GLROs
In a rapidly evolving world, global challenges such as climate change, healthcare crises, and economic inequality continue to loom over countries and are characterised by uncertainty, complexity, and the blurring of traditional boundaries in these Post-Normal Times (Funtowicz & Ravetz, 2020). Countries across the globe and their respective research institutions are tasked not only with producing rigorous scientific data but also with navigating the intricate interplay of facts, values, and politics that shape many of today’s global challenges. More importantly, use evidencebased approaches to find solutions to the challenges that impact society.
Research institutions in the era of post-normal times must exhibit a heightened sense of responsibility towards addressing society’s challenges and contributing to nationbuilding. These include addressing issues related to the rapidly changing technology landscape, including the emergence of disruptive technologies. Others include ethics, environmental sustainability, and social justice that ensure equitable access to knowledge, science, technology, and innovation. Research institutions also play key roles in fostering ethical and responsible research practices. In essence, research institutions or GLROs are not just repositories of knowledge but active participants in shaping the future, where their capacity to navigate uncertainty, contribute to inclusive and sustainable socioeconomic development and uphold ethical standards.
To achieve this, a mission-oriented approach must be adopted by engaging a diverse range of stakeholders, including policymakers, community leaders, and the public, to cocreate knowledge and solutions that are robust and contextually relevant. A mission-oriented approach entails defining bold, societal missions and mobilising resources, talent, and innovation toward achieving these goals. This approach not only serves as a rallying point for researchers and policymakers but also addresses the urgent need for strategic, outcome-driven research that can catalyse transformative change.
One key advantage of adopting a missionoriented approach is its ability to drive innovation and socioeconomic development. By setting clear and ambitious goals, public research institutes can foster collaboration across sectors and disciplines, encouraging the development of cutting-edge technologies and solutions. Moreover, this approach places a premium on public engagement and
accountability, ensuring that the benefits of research are widely shared and that the public’s needs and values are integrated into the innovation process. In a world beset by complex and interconnected challenges, the missionoriented approach offers a beacon of hope, inspiring public research institutes to become proactive agents of change, catalysing the innovations needed to build a more sustainable, equitable, and prosperous future for all.
The capability of acquiring scientific knowledge and translating it into beneficial technology and innovation (STI) is an important driver for any nation’s socioeconomic development. This usually happens when the country can provide the required ecosystem that will not only encourage new and innovative solutions through its STI initiatives but also be able to develop the necessary value and supply chain needed to address the processes of resolving the challenges that impact society and industries. More importantly, the STI ecosystem must be agile and adaptable to future uncertainties and challenges, spawning new industries and employment. The market for frontier technologies is estimated to increase from $350 billion in 2018 to $3.2 trillion by 2025 – with IoT, robotics, solar PV, 5G and AI as its top 5 technologies with the most enormous estimated market value (UNCTAD, 2021). This highlights STI’s importance in modern-day development, where its advancement will boost productivity and improve the livelihoods of many nations and their people.
STI capability is fundamental in the national sustainable development policies and strategies to empower and buttress a knowledgebased society toward a high-tech nation (EU Commission, 2015). The Addis Ababa Action Agenda underscores the influential role of a vibrant STI ecosystem in ensuring nations’ sustainable economic development and competitiveness (United Nations Department of Economic and Social Affairs, 2015). Recently, Malaysia has introduced the concept of STIE to highlight the linkages between STI and the various economic sectors of the nation and the role of a sound STIE ecosystem in transforming Malaysia into a progressive, developed and globally competitive nation (Academy of Sciences Malaysia, 2020).
Definition, Purpose, and Characteristics of GLROs
For Malaysia to achieve its visions and goals of becoming an advanced nation, it needs a holistic STIE ecosystem driven by strong GLROs to helm identified national research interests. As a working definition, GLRO can be defined as an organisation that is established, maintained, and financed completely or partially by the government to perform or support any of the components of the RDICE value chain or as an intermediary body for RDICE which works towards meeting national interests.
The characteristics of GLROs are that they are institutions identified to lead national research interests, including areas of research that are less prioritised or too risky for any private sector to undertake. This R&D and STI are important for ensuring the global competitiveness of the local workforce and industries. To serve the national STIE interests, GLROs are mainly non-profit, serve as a public good and are usually structured as research institutes, a company limited by guarantee (CLBG) or company-limited by shares (CLBS). GLROs are uniquely positioned to create and mediate collaborations between the various stakeholders in the ecosystem. These include researchers for universities, industry captains, policymakers, and the scientific community.
In Malaysia, research entities fall within the jurisdiction of various governmental bodies and may be categorised as departments within a ministry, an independent statutory entity, or a CLBG. These entities serve a crucial function in facilitating the flow of knowledge within the innovation landscape, particularly between knowledge generators such as universities and research organisations (PROs), and the end users, including businesses and communities within the STIE framework (World Bank Malaysia, 2020).
In Malaysia, GLROs exhibit a range of structures, including: 1. Government-Linked Companies (GLCs); 2. Statutory Bodies; 3. Government Departments; and 4. Non-Profit Organisations.
Presently, the nation hosts twenty-six GLROs distributed across its territories. These entities serve as central hubs dedicated to research, development, innovation, and the commercialisation of knowledge and technologies. The GLROs provide a broad spectrum of services for all stakeholders in the national STIE ecosystem. GLROs are also pivotal facilitators in disseminating knowledge about research, development, and innovation within the ecosystem. They play a key catalyst for the transfer of knowledge among the different players in the ecosystem, which include researchers in academic institutions, government agencies, and industry. All of these lead to a continuum from ideation, R&D, application of R&D, commercialisation of R&D,
competitiveness of workforce and industries and contribution to the wealth of the nation.
Role of GLROs in Driving the RDICE Ecosystem
In the RDICE ecosystem, GLRO plays a vital role in supporting the whole value chain. Currently, research and development are done in most of the value chain stages in Malaysia. Fundamental R&D is primarily undertaken in universities. Very few R&D undertaken by universities are ready for the market.
GLROs complement the role of universities by working closely with industry to translate basic R&D into applications and commercially viable products and services. GLRO plays a key trusted bridging role between organisations in the RDICE value chain. GLRO also plays a significant role as the source of access to advanced infrastructure due to the government investment in providing GLRO with state-of-theart facilities and equipment. GLROs also have the necessary expertise to support researchers from academia, other government agencies, and industries. One of the primary roles of GLRO is to translate basic R&D into viable applications that benefit the industry and the broader society. These include developing applications that help governments achieve national development objectives, including developing ‘home-grown’ STIs that protect the nation’s national sovereignty and economic security.
In essence, GLROs become bridges for the university and the industry to transform products from fundamental to application up to commercialisation. In this context, GLRO is seen to play multiple roles of having a sound understanding of fundamental R&D undertaken by universities, knowledge of commercialisation opportunities of R&D that are potentially taken up by industries, and the types of STIs that enhance the nation’s national security. GLROs act as collaborative partners that build strong linkages with key players in the RDICE ecosystem.
The final role of GLRO is that it is regarded as a “trusted partner” for all players in the ecosystem. Hence, it has an important role in gathering market intelligence on the directions of fundamental, applied, and translational R&D and the needs of the economy and society. In this context, GLROs are in a good position to provide strategic insight, stewardship, and market intelligence to all the players in the RDICE value chain. Spillover impact on the value chain where feedback can be relayed to the government and other organisations on market demands, talent requirements, technology, and product foresight leads to a greater value proposition for all stakeholders in the ecosystem.
CHAPTER 2
APPROACH AND METHODOLOGY
Case Study
• National level - case studies of national organisations:
• Global level - global benchmarking of best practices of organisations: ITRI, A*STAR, Fraunhofer, Imec, RIKEN and CSIRO
APPROACH AND METHODOLOGY
This study will focus on the role and functions of GLROs in Malaysia’s national RDICE value chain. While the study will examine the broader contributions of GLROs to nation-building, this study will undertake a more detailed analysis of six GLROs, and they are as follows:
1. MIMOS Berhad
2. Malaysian Agricultural Research and Development Institute (MARDI)
3. Cancer Research Malaysia (CRM)
4. National Institutes of Biotechnology Malaysia (NIBM)
5. NanoMalaysia Berhad
6. Agensi Nuklear Malaysia (ANM)
The following methods were utilised to achieve the objectives and complete the study:
a. Desktop analysis to review annual and financial reports, establishment documents, and policies related to the selected GLROs; and,
b. Qualitative analysis through focus group discussions (FGDs) and stakeholder interview sessions. This design comprises qualitative FGDs and interviews with different sets of stakeholders to obtain more comprehensive insights and perceptions of the state of GLROs and the impact
of these institutions on each group of stakeholders. These stakeholders consist of representatives of the selected GLROs, Ministries, key STIE leaders and key industry players on the role GLROs play and whether the technologies developed by these GLROs have significantly impacted this ecosystem. Key industry players included selected multinational corporations (MNCs) and large local companies.
The study carried out a total of 12 stakeholder engagements consisting of six FGDs, three interview sessions, and three working group meetings. Through these engagement sessions, the study team has collected key inputs and insights from 93 individuals from policymakers, the scientific community, academia, industry captains, professional bodies, and nongovernmental organisations (NGOs). The study team has analysed eight local GLROs and benchmarked six global GLROs for this study. The methodology is summarised in Figure 1.
This study used an 8i-ecosystem framework shown in Figure 2 to characterise eight enablers of the STIE ecosystem (hereafter referred to as the STI ecosystem). This ecosystem consists of two important building blocks: foundation and driver conditions.
Focus Group Discussions and Interviews
• Focus group discussions (FGDs) will be carried out with two groups of stakeholders which are with MNCs and local large companies
• Interviews will be carried out with the following organisations based on the approved set of questionnaires: - EPU, MOF, MITI, MAFI & MOSTI, MIMOS, SIRIM, MARDI, CRM, NIBM, ANM & NanoMalaysia.
• FGDs will be undertaken by W3-W4
undertaken by W1 of June 2022
Gap Analysis and Synthesis
• To undertake gap analysis on national organisations in order to recommend alternative business model and strategies
• Ecosystem mapping with robust framework
• - 8i analysis, 6 dimensions of sustainable impact
Development of New Business Model
Recommendations would cover:
• ROV-based
• Enterprise Economic Model
• Seamlessly integrate RDIC to the "E" - Entrepreneurship, Enterprise (Supply Chain & GLC) and the Economy
• Propose the next stage of evolution of the GLROs ecosystem based on national imperative and dynamics
Figure 1: Methodology of Study
interviews will be
Internationalisation and Global Best Practices & Standards
Smart Partnerships, Cooperation, and Interaction
Quality of Institutions of Governance
Fiscal & Non-fiscal Incentives for Enhancing Creativity, Innovation, and Competitiveness
Drivers of STI Ecosystem
Physical and Natural Infrastructure
Digital Infrastructure and Infostructure
Talent Stock Intellectual Capital
Good Governance and Integrity Systems
Figure 2: Framework to Characterise the STI Ecosystem Source: Values-Based Development and Competitiveness: A Conceptual Analysis.
(Nair, Ahmed, & Vaithilingam, 2022)
The first set of enablers of the STI ecosystem is the foundation conditions that foster connectivity of people, goods, services, and information, which are:
Physical and Natural Infrastructure – Quality and sophistication of the infrastructure that supports the growth and development of the society, industry, and the broader economy. These include the level of use of technology and knowledge systems to deepen the impact on sustainable socioeconomic development and planetary health.
Digital Infrastructure and Infostructure – Digital infrastructure that seamlessly integrates multiple value chains within and across industries and communities. These systems provide a seamless flow of information for market intelligence and strategic decisionmaking.
The second building block of the STI ecosystem is the driver conditions which are defined by the following factors:
Talent Stock Intellectual Capital – the skill sets and entrepreneurial acumen for a knowledge society which includes general and specialised knowledge, as well as technical, entrepreneurial, and leadership skills that can raise the value for all stakeholders in the ecosystem.
Good Governance and Integrity Systems – governance systems that manage resources efficiently and raise valuecreation opportunities for all stakeholders in a transparent and accountable manner. These include policies, regulatory architecture, legislative framework, global best practices and standards that ensure rules of engagement are effectively developed, managed, implemented and outcome-tracked, aligned with the United Sustainable Development Goals.
Fiscal and Non-Fiscal Incentives
– Fiscal incentives include grants, subsidies, tax incentives, cash transfers and other financial support. Non-fiscal incentives include access to R&D, testing centres and specialist facilities, mentorships, and other support schemes to encourage the adoption of new technology, innovation, and knowledge systems.
Institutions of Governance
– the quality of institutions of governance (federal, state and local council), including regulatory framework and standards bodies that ensure transparency and accountability for industry associations, community organisations, institutions of learning, and research institutes. These include the role of these institutions in ensuring the effective formulation and implementation of economic, industrial, social, environmental and other policies that will deepen the impact of STI on sustainable socio-economic development and environmental sustainability.
Smart Partnerships, Cooperation, and Interaction
– quality and depth of cooperation, collaboration and knowledge sharing between all stakeholders in the ecosystem to create value, network externalities and multiplier effect within the economy.
Internationalisation and Global Best Practices & Standards
– participation in developing, formulating, and adhering to international laws, treaties, regulations, global best practices and engagements that ensure sustainable management of the country’s STI ecosystem and resources. These include the depth and breadth of engagement with global knowledge networks, institutions of governance, and supply chains.
The foundation condition, also known as the Reach factor, is the basic building block that connects people, goods, information and knowledge for all stakeholders in society – the condition that enhance the reach to information, knowledge, and markets.
The driver condition, also known as the richness condition, that deepens knowledge intensity in a society.
ROV is the value an organisation gains as a result of continuous improvement using new technology, systems, processes and new business models. The ROI is, hence, a function of ROV. In the context of STI, managing organisational and national resources effectively and efficiently will enhance the value proposition of the STI initiatives for all stakeholders, which in turn will increase its ability to raise the ROI.
The six dimensions of sustainable impact will be used along with the 8i ecosystem analysis to identify and determine the intensity of the collaborations between GLROs and their stakeholders (Figure 3). Together, the study would illustrate the sustainable GLRO ecosystem.
Source: 1. Inclusive Innovation and Sustainable Development: Leap-Frogging Strategies to A High-Income Economy’. (Nair, 2011) 2. Values-Based Development and Competitiveness: A Conceptual Analysis. (Nair, Ahmed, & Vaithilingam, 2022)
A key role of GLRO is to build strong dynamic capabilities of the local workforce and industries. There are three dynamic capability components. First is absorptive capability, which includes incorporating external STIs and knowledge to improve the productivity and efficiency of existing products, services, and business models of local stakeholders in the ecosystem. Second is adaptive capabilities, the component where local firms adapt external STIs and knowledge to their operations and create new products for their clientele. The third component is innovative capability, where firms invest in R&D and STIs to create new products, services and business models. Figure 4 shows the continuum of dynamic capabilities components.
Source: Values-Based Development and
A Conceptual Analysis.
& Vaithilingam, 2022)
Figure 4: Dynamic capabilities components Source: Values-Based Development and Competitiveness: A Conceptual Analysis. (Nair, Ahmed, & Vaithilingam, 2022)
Figure 3: Six Dimensions of Sustainable Impact (ROV) of the GLRO
Competitiveness:
(Nair, Ahmed,
The GLRO value chain is shown in Figure 5, where strong enablers of the ecosystem will enhance the dynamic capability components. These will lead to an increase in the ROV contribution of the GLRO to all stakeholders in the ecosystem and to the wealth of the country.
Strong ROV will enhance the REACH and RICHNESS OF THE
ECOSYSTEM
Figure 5: Sustainable Development of the GLRO Ecosystem Source: Values-Based Development and Competitiveness: A Conceptual Analysis. (Nair, Ahmed, & Vaithilingam, 2022)
Using the above methodology and frameworks, this study will propose a new business model for GLROs in Malaysia. These new models will show how GLROs can generate ROV for their stakeholders in the ecosystem.
CHAPTER 3
GLOBAL AND NATIONAL LANDSCAPE OF GLRO
GLOBAL AND NATIONAL LANDSCAPE OF GLRO
In this chapter, we discuss the role of GLROs in several developed countries and Malaysia. The reasons for the establishment of the institutions and their contribution to nation-building will be discussed in this chapter. We examine GLROs from Singapore, the United States of America, Belgium, Indonesia, Australia, Germany, Taiwan, and Japan. This chapter also examines the role of different types of national GLROs and their contribution to Malaysia.
Why do countries establish GLROs and what is their nature?
Countries often prioritise their domestic capabilities as a fundamental aspect of their national economic agenda. Consequently, entities known as GLROs are established to foster the advancement of knowledge and technologies aligned with the nation’s socioeconomic development agenda. GLROs are tasked with enhancing the capabilities of existing domestic industries, notably SMEs, while also pioneering the development of new sectors. Their mandate includes providing research services to address present challenges encountered by industries. GLROs also play a key role in exploring the potential of emerging technologies that may pave the way for the creation of new sectors and employment opportunities. Acting as intermediaries between industries and various research entities such as universities, GLROs foster open, horizontal, and international collaborations that will deepen the adoption of STI in the economy and society. They play a vital role in bridging the gap between user needs and available resources within the national STIE ecosystem by establishing sustainable and strategic collaborations and partnerships. These strategic interlinkages enable all stakeholders in the ecosystem to benefit from the network externalities and multiplier impact of a collaborative STIE ecosystem.
Thus, in line with the purpose and nature of the GLROs, we wish to propose that the framing of the business model for GLROs, should centre around the following:
1 2 4 3 5 6
GLROs are non-profit entities, taking the form of either a government-linked company, statutory body, government department, or non-profit organisation.
GLROs provide leadership and directions for the national research priority areas.
GLROs conduct and uphold research for the public good.
GLROs focus on creating the economic value chain through knowledge, expertise, and innovation, and as such, they should be evaluated through their abilities to create the ROV rather than just the ROI.
GLROs core purpose must be uniquely positioned and governed so that it could lead and orchestrate quality collaborations and become effective intermediaries for research, innovation, and knowledgedriven value creation activities between government, universities, industries, communities, and the international front.
The required governance competencies and attributes for GLROs must be reflected through the members of its board.
USA: SRI International
State of International and Malaysian GLROs
This section presents the key characteristics and functions of GLROs from eight countries. The GLROs are shown in Figure 6.
BELGIUM: Interuniversity Microelectronics Centre (Imec)
GERMANY: Franhofer Society
TAIWAN: Industrial Technology Research Institute (ITRI)
JAPAN: RIKEN
INDONESIA: Badan Riset & Inovasi Nasional (BRIN)
AUSTRALIA: Commonwealth Scientific and Industrial Research Organisation (CSIRO)
SINGAPORE: Agency for Science, Technology and Research (A*STAR)
6: Mapping of Global GLROs Source: ASM Analytics, 2023
Most developed economies invest significant resources to develop their STI ecosystem. A key feature of this development is establishing government agencies that will play a key role in bridging fundamental R&D with translational R&D that contributes to the competitiveness of local industries and national development priorities. These agencies play a key role in building strong innovation linkages, fostering university-industry R&D collaborations and cluster development. All of which will have a positive and significant impact on the socioeconomic development of these countries.
Figure 7 shows the innovation linkages in the sample countries. Innovation linkages in Malaysia remain low compared to the USA, Belgium, Singapore, Germany, Australia, and Japan. From 2016 onwards, the innovation linkages in Malaysia have declined significantly. Figure 8 shows the level of university-industry R&D collaboration. Malaysia records the lowest levels of university-industry R&D collaboration. Based on the recent data by MASTIC in 2021, 87.5% of researchers are in institutes of higher learning (IHLs) and government research institutes (GRIs). In contrast, only 12.5% of them worked in the industry, which proves a challenge to Malaysia. The state of cluster development is shown in Figure 9. The level of cluster development in Malaysia experienced the most drastic decline from 2018 onwards among all the sample countries.
Figure 7: Innovation Linkages Score for Selected Countries, 2013 to 2022
Notes: Innovation linkages score refers to the combination of components of university-industry R&D collaboration, state of cluster development, GERD financed abroad, % GDP, joint venture/ strategic alliance/bn PPP$ GDP, and patent families/bn PPP$ GDP. The data for Taiwan is unavailable.
Notes: The universityindustry R&D collaboration score is the measurement of the extent to which businesses and universities collaborate on R&D. The data for Taiwan is unavailable.
Figure 8: University and Industry R&D Collaboration for Selected Countries, 2013 to 2022
Notes: The state of cluster development is the measurement of how widespread clusters are. The data for Taiwan is unavailable.
Figure 9: State of Cluster Development and Depth for Selected Countries, 2013 to 2022
Source: State of Cluster Development - Global Innovation Index. (World Intellectual Property Organisation, 2013 – 2022)
Next, we will examine the nature of the GLROs and their contribution to the RDICE ecosystems in the sample countries.
Agency for Science, Technology, & Research (A*STAR), Singapore
A key GLRO leading mission-oriented STIE in Singapore is the Agency for Science, Technology, & Research or A*STAR. A*STAR acts as a catalyst and enabler for local and global innovations through open innovation platforms.
A*STAR directs its primary efforts toward the fields of biomedical sciences, physical sciences, and engineering. It works with research institutes to enhance fundamental research, patented innovations, and readily applicable technologies. A*STAR has led R&D in the areas of biomedical research, nutrition, bioimaging, biodevices, diagnostics, bioprocessing, clinical analysis, computational biology, and various other fields. Additionally, its physical sciences and engineering endeavours encompass advanced manufacturing, chemicals, communications, computational sciences, and more. Within these domains, A*STAR further
narrows its focus in areas such as chemicals and material sciences, GreenTech; electronics; engineering; infocomms; food and consumer; medical technology; pharmaceuticals and biologics; robotics and automation; security and transport; and biomanufacturing.
A key success factor of A*STAR in achieving its STIE outcomes is the cultivation of strong public-private partnerships. These include enhancing capabilities within the public and private R&D sectors. In alignment with this vision, A*STAR collaborates with diverse stakeholders through four engagement models tailored to specific research needs and capability areas. These models facilitate different modes of collaborative research and innovation, including:
1. Many to One Strategic Partnerships;
2. One-to-One Partnerships/Projects;
3. One to Many Consortia; and
4. Many to Many Consortia.
A*STAR actively supports commercialisation endeavours through its subsidiary company, A*ccelerate, serving as a comprehensive open innovation hub for local enterprises seeking technological advancement. A*ccelerate, fully owned by A*STAR, oversees the commercialisation of A*STAR’s Intellectual Property and manages spin-off activities, with subsidiaries including Accelerate Venture Creation Pte Ltd and ASTAR (Suzhou) Co. Ltd. With a robust research ecosystem comprising numerous institutions, platforms, and over 5,800 scientists, researchers, and staff, A*STAR plays a pivotal role in driving innovation and economic growth in Singapore (Agency for Science, Technology and Research, 2022). Table 1 shows the key performance indicators of A*STAR.
Funding for A*STAR’s operations and development primarily stems from the Research, Innovation & Enterprise (RIE) plan, with significant allocations received under initiatives like the RIE2020 Plan and the RI2025 plan. Additionally, A*STAR generates
revenue through contract research, industry collaborations, licensing, technology screening, and spin-off activities, further fuelling its research and innovation endeavours.
In 2021, the National Research and Innovation Agency (BRIN) was established as a “supergovernment agency” designated to oversee R&D endeavours. This agency consolidated various entities, including the Indonesian Institute of Sciences (LIPI), the Agency for the Assessment and Application of Technology (BPPT), the National Nuclear Energy Agency of Indonesia (BATAN), and the National Institute of Aeronautics and Space (LAPAN), alongside research institutions spread across ministries and other institutions (Burhani, Mulyani, & Pamungkas, 2021).
BRIN was established to formulate, coordinate, and synchronise the implementation of STI policies in the country. It is also seen as a key catalyst for intensifying R&D activities that add value to industries and broader society. BRIN plays a key role in coordinating the National System of Science and Technology and assisting the nation in developing comprehensive strategic STIE master plans.
Apart from consolidating major research institutions, BRIN aims to make Indonesia the centre for local natural resources and create high-value-added products and services from these rich natural resources. These include channelling financial resources in a more focused way to nurture strong colouration among industry, research institutions, government agencies, and community organisations. Building a strong quadruple helix will enable local firms to move up the STI value chain, creating more value-added products, services, and business models.
Source: A*STAR Annual Report April 2021 – March 2022. (A*STAR, 2022)
Badan Riset dan Inovasi Nasional (BRIN), Indonesia
Table 1: A*STAR Key Performance Indicators
A key role of BRIN is to mobilise financial support from multiple sources to raise innovative outcomes for the nation (refer to Table 2 for the financial resources mobilise in 2022 and Figure 10 in percentage). These financial resources to develop the STIE ecosystem are envisaged to raise Indonesia’s innovative capability.
Table 2: Fund Allocation and Realisation in 2022 of BRIN
5,685,771,006,317
Source: BRIN, 2022
Figure 10: BRIN’s Funding Source and Percentage of Total Funds and Realisation in 2022 Data Source: BRIN, 2022
Table 3 shows the projections of the research talent stock, research outcomes, and contribution of STI to the nation’s multifactor productivity.
Ratio of Master (S2) & Doctoral (S3) students to number of undergraduate (S1) students to approximate total 'research candidates for science and technology (%)'
Notes:
a Source: Presidential Regulation No. 38 of 2018
b Data provided by Science and Technology Development Research Centre (Puspiptek) LIPI
c Based on SCImago, the proprietary ranking system for journal impact (Scopus) https://www.scimagojr.com
d
Multi-factor productivity (MFP)—that is also often called total-factor productivity (TFP)—reflects the contribution of economic growth outside the growth of capital and workforce
CSIRO,
Australia
Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO) is an important public research entity renowned for its groundbreaking scientific research that has led to many industrial applications. Situated in Canberra, the nation’s capital, CSIRO extends its influence globally with an additional presence in France, Chile, and the United States, boasting a rich history spanning over a century. It plays a significant role in advancing scientific pursuits both within Australia and abroad. CSIRO is widely recognised as a catalyst for innovation and technological advancement, catalysing local industries to enhance their operational processes, product quality, and global competitiveness. Its impactful contributions span diverse domains, including agriculture, food security, health, biosecurity, energy, manufacturing, mineral resources, and the environment. Furthermore, CSIRO offers a spectrum of services catering to industry, academia, government agencies, and various communities across Australia and its partner nations, encompassing material and infrastructure services, agricultural and environmental analysis, biological, food, and medical science services, and animal health services.
the potential negative repercussions of imposing higher revenue targets, which could inadvertently sideline other stakeholders within the ecosystem2. To safeguard CSIRO’s commitment to its role as a public good for all stakeholders, policymakers prioritised maintaining profitability while simultaneously fostering broader societal value across the ecosystem. This encompasses endeavours such as scientific manpower training, generation of novel knowledge to enhance local industry competitiveness, establishment of global knowledge networks to amplify Australia’s scientific and technological impact worldwide, creation of new value-added employment opportunities, development of innovative solutions to address local and global challenges, and positioning Australia as a premier hub for research excellence in identified domains.
2 Several reviews of CSIRO were undertaken to ensure that it provided maximum value to the various stakeholders (Lefroy and Porfirio, 2017)
Financial data from Figure 11 illustrates CSIRO’s balanced budgetary performance from 2017 to 2020, with a notable increase in net profit recorded in the subsequent fiscal year. Despite early pressures to boost external revenue, policymakers recognised
Table 3: National Level Targets from 2020 to 2045 of BRINa
Figure 11: Financial of CSIRO from 2017 to 2021
Source: CSIRO, 2021
The Fraunhofer Institute, Germany
Established in 1949, the Fraunhofer Institute embarked on a mission of applied research and development aimed at fostering advancements benefiting both industry and society. Comprising 76 individual entities scattered across Germany, the institutes’ purview spans an array of human necessities, including health, safety, communication, mobility, energy, and environmental concerns. In January 2021, the Fraunhofer institutes underwent a restructuring process, grouping the entities into nine distinct clusters aligned with related focus areas. This restructuring aimed to streamline cross-institute research and development strategies in contract research, with focus areas encompassing energy technologies and climate protection, health, ICT group, innovation research, light & surfaces, materials and components, microelectronics, production, and resources technologies and bioeconomy.
As Germany’s leading applied research institute, the Fraunhofer Institute contributes significantly as a key player in crafting impactful and extensive solutions across diverse industries and policymakers. Such strategic research activities bring remarkable impacts of investment in the country’s economy, fostering job opportunities in Germany with the increasingly socially acceptable modern technology and the relevant qualifications accessible for skilled workers. Over the past ten years, the institute has seen significant growth in its workforce, expanding from 22,000 employees to 30,350, contributing to the development of skilled professionals to stimulate the advancement of technology innovation (Fraunhofer, 2023). For small and medium companies, Fraunhofer is the predominant catalyst of innovative know-how by advancing the identified trending technologies with high relevance to society and substantial market potential through in-house research programmes at an organisation-wide level (National Research Council, 2013).
The Fraunhofer Institutes collectively generate an annual business turnover of €3.0 billion in 2022. Contract research undertaken by Fraunhofer constitutes a significant portion of this turnover, amounting to €2.6 billion, with approximately two-thirds originating from industry contracts and publicly funded research initiatives. The remaining onethird is contributed by the German federal and state governments as operational funding, empowering the institutes to devise forward-thinking solutions with far-reaching implications for both industry and society (Fraunhofer, 2023).
The Fraunhofer Institute’s overall business revenue consistently increased from 2018 to 2022 despite the decrease in the base funding provided by the German Federal Ministry of Education and Research (BMBF) in the last three years. This institute’s financial model depends on three sources: base funding,
public-sector revenue and industrial revenue (as shown in Figure 8). The institute was wellprepared to overcome such economic crises and remain financially stable, especially during the COVID-19 pandemic (Fraunhofer, n.d.). Contract research from publicly funded projects and industry are the main sources of funding for this institute (refer to Figures 12 and 13). The institute plays a key role in transforming basic research from universities or non-university research institutions into practical applications for government agencies and industries.
Industrial revenue
Base funding
Figure 12: Revenue of Fraunhofer from Contract Research from 2018 to 2022
Source: Fraunhofer (2022) Finances: Contract research 2018–2022. (Accessed: 20 December 2022)
Total project revenue*
Revenue from publicly-funded projects Industry
Federal and state governments
EU * Funding share from other revenue in 2022: 4.7%
Figure 13: Funding Share of Fraunhofer in Percentage from 2018 to 2022
Source: Fraunhofer (2022) Finances: Contract research 2018–2022. (Accessed: 20 December 2022)
Industrial Technology Research Institute (ITRI), Taiwan
ITRI is responsible for catalysing industrial innovation and facilitating Taiwan’s industrial transformation and enhancement of international competitiveness. It is a prominent public research institution established in 1973 to transform Taiwan into an industrial powerhouse, especially in the high-tech areas. Central to ITRI’s endeavours was the development of Taiwan’s semiconductor industry, which propelled advancements across various sectors, including computers, lighting, displays, telecommunications, photovoltaics, and machinery. With a workforce comprising 6,042 employees in 2023, including 21.0% with PhDs, 62.0% with master’s degrees, and 17.0% with bachelor’s degrees, ITRI is renowned for its expertise in applied technology research (ITRI, 2023). The institute is steadfast in its mission to drive industrial development, generate economic value, and enhance societal wellbeing through technology-focused research and development initiatives.
In collaboration with its partners, ITRI has established an Open Innovation System Platform aimed at nurturing collaborative ecosystems. Guided by its 2035 Technology Strategy Roadmap, ITRI focuses on four key domains: ‘Smart Living’, ‘Quality Health’, ‘Sustainable Environment’, and ‘Building a Resilient Society against Cyber Threats’, leveraging key enabling technologies to address pressing societal challenges, develop marketdriven solutions and drive sustainable progress.
Furthermore, ITRI has a track record of incubating and fostering the growth of numerous high-tech companies. These companies emerge from technological advancement and innovative research within ITRI’s lab. Some notable companies that have been incubated by ITRI are the Taiwan Semiconductor Manufacturing Company (TSMC)
and United Microelectronics Corporation (UMC), which have made a transformative impact on Taiwan’s global technology landscape.
The ITRI financial overall remains consistent from 2018 to 2022 despite the COVID-19 pandemic crisis. The institute’s resilience was notably demonstrated through its ability to sustain revenues from technological services and contracted projects, which have been ITRI’s main source of income. The institute continues making breakthroughs in COVID-19 testing, sustainable development for industries, and innovations and applications to address global and local challenges.
Interuniversity Microelectronics Centre (IMEC), Belgium
IMEC was established in 1984 during the technology boom of personal computing and originated from Leuven, Belgium, to increase the efficiency, power, and miniaturisation of CMOS computer chips. In 2016, IMEC and iMinds merged. This resulted in the emergence of the Internet of Things (IoT), new data & knowledge systems, and digital security and privacy. The merger positioned IMEC as a key global market player in driving and leading the development of next-generation digital technologies.
In 2016, IMEC expanded its portfolio by establishing a research centre in Osceola County, Florida. This centre focused on the development of high-speed electronics Integrated Circuits (IC) and photonics. In 2019, IMEC worked with Berkeley University, California on artificial intelligence, novel architectures for machine learning, and designing technologies and systems for future smart devices. IMEC expanded its research areas to include nanoelectronics, semiconductor technology, life sciences, data and telecommunications, automotive
technologies, robotics, agrifood technology, sustainable energy, and smarter consumer electronics and home automation.
IMEC operates an open innovation R&D platform that fosters collaboration across the semiconductor value chain, facilitating pre-competitive research initiatives. This collaborative model enables stakeholders to expedite technological progress, mitigate risks, and optimise returns on investment.
A notable exemplification of the efficacy of this open innovation approach is IMEC’s collaboration with Dutch partner, OnePlanet Research Centre, focusing on precision health and agriculture. Similarly, IMEC’s partnership with Holst Centre exemplifies another impactful collaboration, yielding innovative microelectronics and sensor technology solutions in areas such as health and vitality, energy and climate, and mobility and industry 5.0.
To address the carbon footprint of semiconductor companies, IMEC developed a Sustainable Semiconductor Technologies and System (SSTS) programme to control the ecological impact of the IC value chain based on three pillars: assess, improve, and disrupt the value chain. In November 2023, IMEC released imec.netzero web application available to both the public and private sectors. This provided the necessary tools for identifying and accessing high-level information on the environmental impact of chip manufacturing. This initiative enables companies to be at the forefront of innovation in green technology.
RIKEN, Japan
One of Japan’s largest and most comprehensive research organisations is RIKEN. It is wellknown for its basic and applied science work in a wide range of natural sciences fields such as developmental biology, neuroscience, quantum physics, computer science, etc. With more than a century of establishment, RIKEN has various campuses for different research areas across Japan, and around the world, with over 3,000 employees, both permanent or fixed-term research or administrative staff, of which 600 are research personnel from all over the globe (RIKEN, n.d.).
RIKEN prioritises collaboration and support between its centres, laboratories and advanced research facilities which can be divided into four main categories, where each of them interacts within an integrated research system to come up with pioneering science through its top-class research facilities within and outside of RIKEN & Japan:
1. Strategic Research Centres
Focus on fields in life sciences and green innovation such as neuroscience, quantitative biology, biochemistry and phytology.
2. Research Infrastructure Centres Support RIKEN’s research and development by providing world-class research infrastructure to researchers from and outside Japan to conduct advanced scientific activities.
3. Cluster for Pioneering Research RIKEN’s researchers are given the independence to conduct their research within RIKEN and establish their own research institutes.
4. Cluster for Science, Technology & Innovation Hub RIKEN contributes to the international scientific community through its activities in sharing new knowledge among its scientists, subsidiaries and research institutes to ensure that the knowledge and know-how produced assist in the commercialisation of research ideas through partnerships with private entities.
During its early founding years, RIKEN had to depend on the private sector for financial support as they could not secure government funding; RIKEN raised approximately 2 million yen (RIKEN, n.d.). Consequently, as RIKEN grew over the years, it began to receive annual funding from the Japanese government. Government grants contribute to the largest portion of RIKEN’s income. The income was used to fund its general operations and facility maintenance. RIKEN also receives large sums of funds from government sues for its operation and construction of major or large-scale facilities. RIKEN also generates income through competitive grants industrial collaborations and royalty income. Although RIKEN receives more than 80% of its funding from the Japanese government, RIKEN spends and invests around 60% of its budget into R&D activities. (RIKEN, n.d.)
SRI International, The US
A California-based nonprofit organisation, SRI International traces its origins back to 1946 when it was founded as the Stanford Research Institute (SRI International, n.d.). Its mission was to engage in research that leads to the betterment of society through the generation of new knowledge and discovery in STI. As GLRO, SRI International serves a diverse clientele, including government agencies, commercial enterprises, and nonprofit organisations, offering a wide range of services such as basic and applied research, laboratory support, advisory services, technology development and licensing, and the creation of deployable systems, products, and venture opportunities. SRI’s areas of focus are:
1. Advanced Technology & Systems; 2. Biosciences; 3. Education; 4. Global Partnerships; 5. Information & Computing Sciences; and 6. Integrated Systems and Solutions.
Throughout its illustrious 70-year history, SRI has been at the forefront of pioneering collaborations with the U.S. government, foreign governments, and some of the world’s largest corporations to drive groundbreaking innovations. In the past decade alone, SRI has undertaken over USD4 billion worth of R&D projects, with its clientele largely from the private sector and the US Federal Government. Its funding primarily comes from research and development contracts, licensing royalties, and revenues generated through spin-off ventures, with a significant portion originating from federal government contracts and grants. The revenue generated from these activities is reinvested to bolster SRI’s capabilities, facilities, and staff in pursuit of its mission. Some of its most notable innovations include the Siri virtual personal assistant, the computer mouse, pioneering personal computing demonstrations, wired and wireless internet transmissions, automatic check processing for the banking industry, minimally invasive robotic surgery, and ultrasound imaging for medical diagnostics.
SRI International’s current location is in Menlo Park, covering approximately 63 acres with extensive research laboratories, technical offices, administrative spaces, and support facilities. Currently, SRI employs 1,655 staff members, with 1,013 situated at the Menlo Park Campus, comprising scientists, engineers, technologists, policy researchers, corporate
personnel, and support staff, many of whom are esteemed leaders in their respective fields (IBank, 2020). Moreover, a significant portion of SRI’s team holds advanced degrees, with more than 25 per cent possessing doctorates and an additional 45 per cent holding advanced degrees (SRI International, 2020). To date, SRI International has filed over 13,000 patents and has over 50 spin-off companies. SRI International’s robotics arm alone produced seven companies from 2013 to 2023 (DiFeliciantonio, n.d.). International’s annual revenue stands at approximately USD400 million – largely from government funding –with net assets of USD200 million. Annually, SRI International manages over 500 R&D projects per year (SRI International, n.d.).
Value Created by the International GLROs
Figure 14 illustrates the role played by global GLROs from the benchmarked countries categorised as their ‘core functions’ (highlighted in red), which are high-risk, high-cost and supported by the government, while their ‘supplementary functions’ (highlighted in blue), which are their cost-covering services provided to their stakeholders.
Provides analytics and modelling
Contract research
Mission-oriented high impact R&D of national priorities
Consultancy and strategic advice
Provide network of specialists
Provide access to world-class experimental facilities
Functions of Global GLROs: Values Driven
Build university-industry-collaboration
Facilitates technology transfer
Provide next-generation talent training
IP licensing and management
Market research
Create high-value spin-offs in emerging technologies
Product testing
Figure 15: R&D Funding Sources for PROs Based on Total R&D Expenditure (2018)
Source: New Business Model for Government-Linked Research Organisations (GLRO), ASM, 2022
3 RTI International assessed the impact of case studies in CSIRO. Applying a case study portfolio Benefit-Cost Ratio (BCR) of 8.4 to CSIRO’s operational expenditures of $1.4 billion for the fiscal year 2021-2022, suggests that CSIRO has generated benefits amounting to $11.7 billion, resulting in a Net Present Value (NPV) of $10.2 billion.
For example, CSIRO in Australia conducts and encourages the uptake of world-class scientific research and mobilises its best talent for the benefit of Australian companies. The annual revenue generated by CSIRO is AUD400 million (66% of annual revenue funded by the federal government). But if we look at the ROV generated from their activities, it is estimated at AUD4.5 billion, three times the annual budget provided by the Australian government (CSIRO, 2020). A recent estimate by RTI International shows that for every AUD1 invested by CSIRO into its research activities, a return of AUD8.4 of value is generated to Australia’s economic, social, and environment (RTI International, 2022)3
In Taiwan, ITRI receives strong governmental support and half of its funding from the government. A similar pattern can be seen in RIKEN, Japan, which receives 70% of its funding from the government and the remaining 30% from its research activities. In Australia, the federal government funds CSIRO by over 60%, while the remaining income is derived from collaboration with industry partners. In India, the National Institute of Oceanography (NIO) is fully funded by the government with additional earnings from its external cash flows.
By contrast, the funding of Germany’s Fraunhofer is 30% from government sources while 70% is from research earnings and
licensing fees for intellectual property. Similarly, in Belgium, two-thirds of the total revenue in IMEC is contributed by the private sector, with the remaining one-third being government funding.
Meanwhile, Singapore has a streamlined R&D policy formulation and implementation and has a large industry-university partnership. For instance, A*STAR in Singapore plays a key role in bridging the innovation chasm between the research community and the private sector by focusing on mission-oriented research and assisting in commercialisation activities.
Conclusively, from the benchmarking analysis, we have observed that global GLROs focus on ROV-based activities instead of ROI and receive a majority of their annual funding from the government yearly. For example, ITRI and CSIRO receive more than 50% of their operational funding from their respective governments while the remaining share of their income is generated from commercial services such as testing, consultancy and IP licensing (refer to Table 5).
A*STAR Singapore (2002)
BRIN Indonesia (2019)
Materials and GreenTech; Electronics; Food and Consumer; Medical Technology; Pharmaceuticals & Biologics; Robotics.
Aeronautics & Space; Earth Science & Maritime; Life Science; Environment; Agriculture & Food; Health; Social Science; Nanotechnology.
• Acts as a one-stop open innovation resource for local enterprises.
• Focuses on missionoriented research based on national priority areas.
• Provides access to worldclass experimental facilities.
• Acts as a research platform to value-add local natural resources and diversity.
• Provides product development services and training to industry players.
• Receives a large portion of operational and development funding through RIE Plans.
• Generates minimal income through commercial services (A*STAR, 2021).
• A fully funded agency under the government.
CSIRO Australia (1916)
Agriculture; Construction; Energy & Food; Health; Manufacturing; Mining and Resources; Space and Technology.
• Provides consultancy, strategic advice, and data processing.
• Conducts R&D from basic to experimental development.
• Provides sample procurement, testing and certification, and research repository.
• Receives over 60% government funding.
• Receives 30-40% income from collaboration with industry partners.
Table 5: Global Benchmarking of GLROs
Fraunhofer Germany (1949)
ITRI Taiwan (1973)
Bioeconomy; Digital Healthcare; AI; Quantum Technologies; Resource Efficiency and Climate Technologies.
• Conduct research and develop knowledge on various aspects of the waters around India.
• Disseminate knowledge of the waters around India.
• Provide support to government, various industries, and nongovernment organisations through consultancy and contract research.
• Receives the majority of funding through government grants.
• Receives the remainder of the funding from external cash flows from its research activities.
National Landscape of GLROs
The primary source of R&D funding for GLROs predominantly originates directly from the national government, often constituting up to 100% of their funding. However, there are instances where a significant portion of R&D funding is reported to come from alternative sources, as illustrated in Figure 15. This variance can be attributed to the diverse organisational structures of the GLROs in question, with certain entities having the capacity to generate revenue autonomously. Notably, this tendency is more prevalent among corporatised GLROs or entities operating under a company limited by guarantee. In contrast to Research Centres (RCs), GLROs typically depend on government funding to sustain their technology transfer and commercialisation endeavours, which tend to be resource-intensive activities (Figure 16).
Local governments
National governments
Private sector
Own sources
Rest of the world
Figure 15: R&D Funding Sources for PROs Based on Total R&D Expenditure (2018)
Figure 16: Average Sources of Funding for PROs and RCs
The level of commercialisation of research outcomes remains notably low across both GLROs and RCs. While certain GLROs partake in activities such as contract research or the provision of technology services, the proportion engaged in such endeavours pales in comparison to those involved in knowledge transfer initiatives, as indicated in Figure 17.
GLROs primarily facilitate technology transfer through licensing contracts related to patents and contracts for technology services that do not entail Intellectual Property Rights (IPRs),
as shown in Figure 18. Conversely, RCs rely more heavily on agreements for contract research and technology services that do not involve IPRs. It is important to acknowledge that the degree of success in technology transfer and commercialisation varies significantly among both GLROs and RCs. While a select few have consistently achieved favourable outcomes, a substantial portion of both GLROs and RCs encounter challenges in realising significant success.
Licensing contracts involving patents
established (firms and startups with research staff)
Products commecialised through spinoffs (staff involved)
Products commecialised (through licensing)
Confidential agreements (no formal IPRs)
All licenses, options and assignments for all types of IPRs
Technology services contracts not involving IPRs
research agreements
Licensing contracts involving patents
established (firms and startups with research staff)
Products commecialised through spinoffs (staff involved)
Products commecialised (through licensing)
Confidential agreements (no formal IPRs)
All licenses, options and assignments for all types of IPRs
Technology services contracts not involving IPRs
research agreements
Figure 17: Predisposition of GLROs and RCs in Technology Transfer Activities (2017–2018)
Source: World Bank, 2020
Figure 18: Median of Technology Transfer Activities per FTE of GLROs and RCs (2017–2018)
Source: World Bank, 2020
Core Function
Current State of Play of GLROs
Table 6: Local Benchmarking on Types of GLROs
Companies (GLC)
• Provides technical & consultancy services in technologies areas across industries.
• Provides product testing; inspection; personnel and product certification.
• Drives commercialisation of promising innovations from a broad range of technology areas.
• Acts as a catalyst for collaborations with industry by mobilising experts with industry partners.
• Conduct R&D with regards to production, utilisation, processing and commercialisation of crops, livestock and food and farming.
• Provides training, consultancy services, laboratory analysis, quality assurance and contract R&D expert services in agriculture and agro-based industries.
• Conduct R&D&C&I and provide technical service & training in the field of nuclear science and related technology.
• Coordinate and manage nuclear affairs at national and international level.
• Act as the National Centre for Radiation Metrology and as the National Radioactive Waste Management Centre.
• Conducts frontier research on cancer detection, prevention and drug repurposing for the treatment of cancer.
• Provides sample testing services and access to facilities.
Funding Model
• Ministerial departments that were corporatised to undertake commercial activities in RDIC through joint ventures or subsidiaries.
• Gains revenue from technology monetisation and R&D services provided to industry partners.
• Statutory body with an act of establishment and includes a private arm (MARDITech Corporation Sdn. Bhd.).
• Receives publicsector funds while also generating income revenue through commercialisation activities.
• Receives annual operational and development funding from the ministry. Allocations vary depending on the priority of the ministry.
• Conducts limited commercial activities through services provided to the private sector.
• A non-profit cancer research organisation by donations and research grants to support significant scientific breakthroughs in cancer research have led to the development of novel medications and therapies, as well as valuable insights into preventative measures against the disease.
National Institutes of Biotechnology Malaysia (NIBM)
The National Institutes of Biotechnology Malaysia (NIBM) is a tripartite entity consisting of the Malaysia Genome and Vaccine Institute (MGVI), the Malaysian Institute of Pharmaceuticals (IPharm), and the AgroBiotechnology Institute (ABI) to advance the field of biotechnology through research, development, innovation, commercialisation, and economy (RDICE) in collaboration with parties across the quadruple-helix (EPU, 2017).
The focus of the research institutes under NIBM are as follows:
1. Malaysia Genome and Vaccine Institute (MGI): Research organisation focusing on discovery through genome sequencing, comparative genomics, and structural biology as well as vaccine development.
2. Malaysian Institute of Pharmaceuticals and Nutraceuticals (IPharm): Research institute focused on RDICE activities in the field of medicinal and nutritional products.
3. Agro-Biotechnology Institute Malaysia (ABI): Conducts agro-biotechnology RDICE projects.
With state-of-the-art facilities and a team of talented researchers, NIBM has a mandate to:
1. Act as a national centre focusing principally on research, development, innovation, and commercialisation of industrial, agriculture and healthcare biotechnology and bioinformatics knowledge and technologies, and become a national resource and reference centre for industrial, agriculture and healthcare biotechnology and bioinformatics.
2. Mobilise expertise from industrial, agriculture, healthcare biotechnology and bioinformatics sectors to support R&D initiatives and programmes of the Institutes.
3. Provide the platform and act as a catalyst for the acceleration in growth of the Malaysian biotechnology industry.
Established in 2005 in tandem with the launch of the National Biotechnology Policy (NBP) 20052020, NIBM has made significant contributions to Malaysia’s economy and the biotechnology fraternity. As one of the implementing agencies of the NBP 2005-2020, along with Bioeconomy Corporation, NIBM was tasked to assist in the following targets by 2020:
1. At least 20 global Malaysian biotechnology companies.
2. Contribute 5% of GDP to the biotechnology industry.
3. Create 280,000 biotechnology-related jobs.
NIBM and the Bioeconomy Corporation are the implementing agencies of the National Biotechnology Policy 2.0 (NBP 2.0), which was launched in 2022.
The policy is focused on mobilising biotechnology to steer Malaysia towards a hightech bio-innovation nation by 2030 to achieve the following targets:
1. To produce three bio-innovation unicorns from BioNexus companies and STI-driven companies.
2. To nurture 30% of high-potential BioNexus companies to go global and 70% to be locally focused.
3. Develop the national institutes of biotechnology to be of global prominence in terms of:
• Research & Publications
• Renowned Research Scientists
• High-Technology Platforms for Scientific Community
4. 5% of GDP contributed by all biotechnology companies (both BioNexus and non-BioNexus) across the NBP 2.0 Major Thrusts.
5. 80% of biotechnology graduates are certified through microcredential programmes and 20% in postgraduates’ programmes (Masters and PhD level) in highly specialised biotechnology fields as identified by the 10-10 MySTIE Framework in Biosciences Technology Drivers.
NIBM’s work in advancing biotechnology through RDICE activities and providing training and education programmes to nurture the next generation of biotechnologists in Malaysia is anchored by a small team across the three institutions (MOSTI, 2022). The vision, mission, manpower, revenue and notable projects are shown below:
Agro-Biotechnology Institute Malaysia (ABI)
Vision Aspires to be the national reference centre for agrobiotechnology.
• Generating technology, knowledge and products from R&D in agrobiotechnology for agricultural development;
and Vaccine Institute (MGI)
Mission
• Generate highly specialised human capital for sustainable development of the agri-biotechnology industry;
• Linking Malaysia to various networks and organisations at the international biotechnology; as well as strengthening existing networks and relationships among local agricultural biotechnology organisations.
Manpower (as of 2020) 19 Scientists (full capacity 120)
Revenue – rent and technical services (as of 2020)
Notable products (as of 2020)
RM 131,998 (2020)
1. Tiger Milk Mushroom (Tuber)
2. Tiger Milk Mushroom (Powder)
3. Rhinobooster
4. LiPro®5000 Workstation
5. Halal Formulated for Fish Feed Pellet
Malaysian Institute of Pharmaceuticals and Nutraceuticals (IPharm)
A premier networkbased institute in genome research for knowledge generation, innovation and technology transfer for economic development. A centre of excellence for commercialisationdriven R&D in healthcare biotechnology.
• Implementing the National Biotechnology Policy via genomics and molecular biology research to develop home-grown technologies in selected industrial and healthcare biotechnology niches.
• To conduct world-class R&D to accelerate the discovery, development and commercialisation of pharmaceutical and nutraceutical products
(full capacity 300)
(full capacity 200)
RM 209,928 (2020) RM 1,096,315 (2020)
1. Reagent and method for precipitation of biological materials from Hydro-Base Colloids/Solutions (raw honey authenticity)
1. Carica Oral Rehydration Salts (ORS)
2. Carcica Soluble Tablet
3. Ipharmix Spa Kit
4. Ginger Double Natural Goodness
Malaysian Genome
Table 7: The Vision, Mission, Manpower, Revenue and Notable Products of the Three Research Institutes under NIBM
NMB, operating as a commercial arm under the purview of the Ministry of Science, Technology, and Innovation (MOSTI), is tasked with spearheading initiatives in nanotechnology commercialisation and industrial advancement. NMB’s primary focus encompasses four strategic sectors: Food and Agriculture, Wellness, Healthcare and Medicine, Energy and Environmental Conservation, as well as Electronic Devices and Systems. Employing a collaborative venture-building approach, NNB serves as a central hub, fostering partnerships among industry stakeholders, academia, research institutions, and the wider community to collectively innovate and bring to market viable nanotechnology solutions in various product and service formats while concurrently nurturing supportive ecosystems. Aligned with the National Nanotechnology Policy and Strategy for the period 2021-2030, NNB collaborates closely with the National Nanotechnology Centre (NNC), a division operating under MOSTI’s auspices, responsible for overseeing and coordinating the national nanotechnology agenda, aiming to bridge the gap between fundamental and applied research and marketdriven societal needs.
As nanotechnology is an emerging field in Malaysia, significant risk mitigation is required for the industry to embrace the shift into incorporating nanotechnology into their products and businesses. Without government intervention, the rate of industry adoption of nanotechnology will not position Malaysia strategically in the emerging 4IR global supply chain, and as such, NMB’s existence as a business entity and a government agency under MOSTI to create the nexus between the government, industry, academia, and society to enable the entire nanotechnology
commercialisation ecosystem to grow, generate revenue and create jobs.
The NMB assumes several key roles, including: Serving as a corporate entity dedicated to advancing the commercialisation and growth of nanotechnology.
1. Strategic planning and coordinating the commercialisation of nanotechnology R&D in impactful sectors such as electronics, agriculture, energy, environment, and healthcare.
2. Orchestrating initiatives aimed at fostering the growth of nanotechnologydriven industries.
3. Devising strategies to position Malaysia’s nanotechnology sector within the global supply chain and value network.
4. Streamlining processes to facilitate investment in nanotechnology commercialisation endeavours.
5. Spearheading efforts to cultivate talent and expertise in nanotechnology, encompassing scientists, engineers, researchers, and industry professionals.
As the primary driver of commercialisation efforts, NMB extends comprehensive assistance to commercial entities operating within the nanotechnology sector. This support encompasses a range of services, including global marketing initiatives, fostering talent development within specific sectors, allocating financial and infrastructural resources, facilitating technology and knowledge transfers, and catalysing product innovations capitalising on nanotechnology. Over a decade dedicated to coordinating and advancing the country’s nanotechnology industry, NMB’s initiatives have yielded notable outcomes. These achievements span various facets, including manufacturing nano-products, market penetration, securing funding, attaining certifications, and provisioning essential facilities and infrastructure.
Nano-products manufacturing in four nanotechnology jump-start sectors of NMB is projected between RM1-2 billion market size by 2025, as shown below:
Food & Agriculture
• The Malaysian trade performance for the food and agricultural industry was valued at RM157.4 billion in 2019 where RM69.6 billion stood for exports and RM 7.786 billion for imported goods (DOSM, 2019).
• The total nanotechnology market size in food and agriculture to reach RM1.31 billion in 2025 (DOSM, 2019).
Energy & Environment
• The Malaysian trade performance for energy and environment was valued at RM16.33 billion in 2019 where 66.7% (RM16.82 billion) are imported goods (DOSM, 2020).
• It is expected that the nanotechnology market size in energy and environment will reach RM2.1 billion in 2025 (DOSM, 2020).
Electronic Devices & Systems
• Electronic devices and systems in Malaysia were valued at RM576.9 billion in 2019 where 60% (RM 346.6 billion) are exported goods (Malaysia External Trade Statistics, 2019).
• It is expected that the nanotechnology market for electronic devices and systems will be estimated at RM1.78 billion in 2025 (Malaysia External Trade Statistics, 2019).
Wellness, Medicine & Healthcare
• The Malaysian health and wellness trade performance was valued at RM39.9 billion in 2019 where imports and exports are balanced (NMB, 2019).
• The total addressable market for nanotechnology applications in health and wellness is expected to reach RM1.93 billion in 2025 (NMB, 2019).
• Agensi Nuklear Malaysia (ANM)
Established on 19 September 1972 under the purview of the Ministry of Science, Technology and Environment (MOSTE), the entity known as the Tun Ismail Atomic Research Centre (PUSPATI) underwent several transformations over the years. Initially named PUSPATI, it was subsequently rebranded as the Nuclear Energy Unit (UTN) and placed within the Prime Minister’s Department on 16 June 1983. However, it returned to MOSTE’s jurisdiction on 10 October 1990, where it underwent another name change, becoming the Malaysian Institute for Nuclear Technology Research (MINT) on 10 August 1994. Finally, on 28 September 2006, it assumed its current designation as the Malaysian Nuclear Agency (Agensi Nuklear Malaysia, ANM) under the Ministry of Science, Technology and Innovation (MOSTI).
The transition to Agensi Nuklear Malaysia (ANM) aimed to align the agency’s functions with its core responsibilities, which include conducting research, development, and commercialisation endeavours in nuclear science and technology. Additionally, ANM is entrusted with coordinating and overseeing nuclear affairs and policies both domestically and internationally. Its mandate encompasses a range of functions, including conducting research and development, facilitating technology transfer and commercialisation, coordinating nuclear affairs at national and international levels, and serving as the National Authority for the implementation of the Comprehensive Nuclear Test Ban Treaty Organisation (CTBTO).
ANM’s primary objectives include generating new products and technologies aligned with the national development agenda, achieving a minimum income equivalent to 30% of the annual operating budget through technology transfer and commercialisation, ensuring organisational excellence through strategic planning and quality management, serving as a Technical Support Organisation (TSO) for various industries, conducting focused R&D projects, and fostering collaboration with international organisations to strengthen relationships and cooperation in the field of nuclear science and technology.
ANM’s R&D covers the following areas:
Agriculture & life sciences
Environmental sectors
Industrial & manufacturing sectors
Reactor technology & nuclear power
Medicine
From 2011 to 2015, 85% of expenditure was R&D-related, and 41% of the staff consisted of researchers. ANM pioneered the development of nuclear technology in agriculture in Malaysia in 1981. This can be seen through the achievement of producing the IS21 rice seeds through the use of gamma radiation-induced mutation breeding techniques. The IS21 rice seeds garnered international acclaim, and ANM was awarded the Outstanding Achievement Award by the Food and Agriculture of the United Nations (FAO)/ IAEA and Forum Outstanding Research Award Nuclear Cooperation in Asia (FNCA) for the breeding category. The IS21 rice seed has also been recognised nationally and was included in the national rice subsidy scheme.
brand building and marketing channels without the need to invest in lengthy and uncertain research endeavours. MIMOS oversees various labs, including the Semiconductor Technology Centre (STC), which provides crucial testing services to industries. The impact of MIMOS and its subsidiary, MIMOS STC, is examined in detail in Chapter 4.3.1 of the report.
• Malaysian Agricultural Research and Development Institute (MARDI)
MIMOS Berhad is a company limited by guarantee (CLBG) that commenced operations in 1985 to innovate ICT and develop new market creations for its partners and industry players. MIMOS Berhad develops and commercialises patented technology to foster and spur economic growth within Malaysia. It is contributing to the national agenda of transforming Malaysia into a Digital, Innovation Economy.
The primary objective of MIMOS is to lead the way in research and development within the realms of ICT, semiconductor technology, and microelectronics. It focuses on practical research and technology transfer, facilitating the emergence of new technology ventures in ICT and microelectronics to bolster the competitiveness of domestic industries. MIMOS concentrates its applied research endeavours on crafting technology platforms that serve as foundations for local industries to develop globally marketable products. Its fundamental role revolves around transferring or licensing these technology platforms to Malaysian companies, empowering them to further refine these technologies into market-ready products and applications, thus contributing to global market demands. The overarching goal is elevating Malaysia’s ICT industry along the value chain, fostering economic growth.
Over 16 years, MIMOS has amassed a portfolio of more than 900 Intellectual Properties across various technological domains and socioeconomic sectors. Positioned as a pivotal player in Malaysia’s transformation journey and ICT Vision, MIMOS aims to foster an environment of innovation by cultivating partnerships with both internal and external stakeholders, embracing smart collaboration models and inclusive growth strategies. The technology platforms offered by MIMOS afford local companies, recipients of MIMOS’ technology, rapid entry into the market and flexibility in pricing, enabling them to establish a global presence. Leveraging the intellectual property generated by MIMOS, the objective is to reposition Malaysia’s domestic industries to compete in specialised global markets. This approach allows local industries to focus on
Established under the Malaysian Agricultural Research and Development Institute Act 1969, MARDI is a statutory body founded on October 28, 1969, and commenced its operations in March 1971. Its primary mission is to pioneer technological advancements in the food, agricultural, and agro-based sectors. MARDI adopts a strategic approach to technology development, employing planned innovation methodologies to ensure the competitiveness of its technological solutions.
The core mandates of MARDI encompass:
1. Generating inclusive and competitive technologies and innovations in agriculture and agro-based industries to enhance societal well-being.
2. Enhancing the technological and service delivery systems to boost productivity within the agro-food sector.
3. Fostering a conducive environment and capabilities for agricultural research and development.
4. Cultivating competitive agropreneurs and fostering the growth of agro-based industries, emphasising efficiency, sustainability, modernisation, and global relevance.
Outlined in Section 3 of the Malaysian Agricultural Research and Development Institute Act 1969, MARDI’s functions encompass conducting scientific, technical, economic, and sociological research on:
1. The production, utilisation, and processing of various crops, excluding rubber, oil palm, and cocoa, as well as livestock and food.
2. Mixed farming practices.
3. Conducting commercial research and production activities.
The technologies and innovations generated include techniques, processes, product formulations, prototypes, varieties, livestock breeds, software applications or hardware in the field of agriculture. These technologies and innovations are then transferred to the local farming community based on the agrifood clusters under MARDI. Figure 20 shows that in 2020, MARDI had developed 26 ‘public good’ technologies – which refer to seed technologies offered without charges – to the local community. MARDI also conducts the MARDI Techno Entrepreneur Development programme, which aims to nurture local technopreneurs in the agriculture industry that utilises MARDI’s homegrown technologies. In 2020, a total of
• MIMOS Berhad
105 out of 913 MARDI techno entrepreneurs successfully increased their entrepreneurial level.
TEKNOLOGI
TEKNOLOGI
Agrifood Clusters
Source: MARDI, 2020
Measuring Financial Position of GLRO: Traditional Approach
In this section, we present the traditional way of measuring the ROI for GLROs. Here we present two case studies. One is an international case study (CSIRO in Australia), and the second is a Malaysian case study (MIMOS). Through this
case study, we highlight that the traditional way of measuring the GLROs does not truly reflect the value these GRLOs contribute to the national STIE ecosystem.
Financial Position of MIMOS
Here, we discuss case studies of several international GLROs and the case of one Malaysia GLRO. In this report, we examined the financial position of MIMOS since its inception and found that its financial position is like CSIRO. For example, observe that over the last 20 years (2000-2020):
1. from 2007-2020, the average government grant received was RM161.5 million, which is 89.3% of the 14 years’ average total income.
2. the average for administrative expenses is RM114.1 million, which is 72.5% of the average total expenses.
Based on data provided by MIMOS, the analysis shows that the financial position of MIMOS is similar to that of other global GLROs. As in the case of CSIRO, MIMOS was established to be a “public good” for the national STIE ecosystem. In the next section, we examine the role of MIMOS and its subsidiary STC in creating value for the Malaysian economy. This analysis will be based on the proposed values-based development model. We measure the ROV for MIMOS and its subsidiary.
Over the 20 years (2000-2020)
• The average total income is RM154,759,044.95
• The average total expenses are RM157,387,719.52
• In 2006, MIMOS increased its issued and paid up ordinary share capital from RM29 million to RM100 million
• From 2007 - 2020, the average government grant received is RM161,515,795.79, which is 89.3% of the 14 years' average total income
• The average for administrative expenses is RM114,081,780.14, which is 72.5% of the average total expenses
Over the 20 years (2000-2020), MIMOS has accumulated:
Total Income: Total Expenses: Average Income: Average Expenses: Net Profit/Loss:
RM3,249,939,944.00
-RM3,305,142,110.00
RM154,759,044.95
RM157,387,719.52 -RM55,202,166.00
Figure 20: The Breakdown of Public Good Technologies based on MARDI’s
Figure 21: Financial Position of MIMOS
In conclusion, Malaysia has STI as a driver of economic and societal growth and meeting the nation’s needs. GLROs play a crucial role at every level of the RDICE value chain, especially in translating new knowledge into innovative products and services. To this end, GLROs bring together various innovation actors from academia (universities and research institutions) and technology end-users (business enterprises and societies), with certain GLROs performing better than others. Despite the country’s various efforts and aggressive economic and social objectives, there is still no clear overarching plan that articulates specific strategic and operational roles for GLROs. This has led to GLROs working in silos, competing with universities and enterprises, and fighting for resources. These silos are present but not pervasive across the RDICE value chain as it varies based on the types of GLROs. This is reflected in the challenges and benefits perceived by stakeholders on the GLROs’ performance:
Perceived Benefits
• GLROs are given a level of autonomy compared to Research Centres (RCs). Corporatised Public Research Organisations (PROs) or Companies Limited by Guarantee (CLBG) have greater autonomy compared to other types of PROs, especially in their talent development and research activities.
• GLROs can play a pivotal role in the generation of new knowledge and facilitate the transfer of technologies to end-users (firms and societies).
• GLROs have the potential to nurture high-tech talent for the Malaysian economic sectors. They should focus on developing and building the internal capacity of talent as well as form linkages with talent outside of their institutions.
• GLROs can facilitate talent mobility among institutions of higher learning, government agencies, other research institutes, and industry players. A consortium concept is essential to break the “silo mindset” among talent in GLROs.
• GLROs play a key role in fostering backward linkages with institutions of higher learning and forward linkages with industry. Thus, fostering a seamless flow of knowledge across the RDICE value chain and generating a strong pipeline of high-tech talent for the industry should focus on nurturing the right mindset, in addition to having the necessary competencies.
• GLROs have the necessary talent and technology to assist researchers from institutions of higher learning to create R&D projects that have commercial value.
• GLROs also have the potential to share their expertise and research infrastructure with industry to improve their competitiveness.
• The state-of-the-art research facilities in the GLROs will enable institutions of higher learning, other research institutes, and the industry to share the cost of undertaking fundamental, applied, and translational R&D.
• Strong collaboration among GLROs and other players in the ecosystem will enable the industries working in partnership with the government to future-proof the economic competitiveness of the nation by undertaking robust STIE foresight activities.
• The leadership in many GLROs do not have both the research and entrepreneurial acumen (hybrid knowledge); hence, they are unable to link the research undertaken by the GLRO to market needs.
• Most GLROs are ROIfocused and must show returns in a short timeframe. Hence, they do not play their role as a “public good” to nurture the dynamic capability (absorptive, adaptive, and innovative capabilities) of other stakeholders in the ecosystem.
• Many GLROs compete with institutions of higher learning and other research institutes for competitive national grants. This hinders collaboration between the GLROs, institutions of higher learning, and other research institutes in the ecosystem.
• Many GLROs also compete with industry players for market share, which results in many of the industry’s reluctance to work with the GLROs.
• The competitive nature of the GLROs has resulted in a lack of trust among institutions of higher learning and industry towards GLROs – this is one of the main causes of a fragmented RDCIE ecosystem.
Perceived Gaps and Challenges
• Lack of policy research conducted by GLROs, including foresight and forecasting, and identification of focus areas based on Malaysia’s strength dilutes the focus of the GLROs in delivering impact. They are also unable to provide research directions and leadership to institutions of higher learning and industry players on key research and STIE focus areas that will create value for the nation.
• Lack of foresight and forecasting has hindered the ability of the nation to future-proof the economic sectors from rapid technological changes and disruptive technologies.
• Lack of trust and strong collaboration partnerships due to weaknesses in the GLRO ecosystem has led to a duplication of resources and efforts, which have not led to building a dynamic and vibrant RDICE ecosystem. This has led to the STIE efforts of the nation not creating optimal ROV contributions to the socioeconomic development of the nation.
• The ability to deliver impact is affected by GLROs’ understanding of “mandate” and the ability of GLROs to “claim the space” by stepping into the policy realm and positioning the relevant interventions across the different ministries.
• Lack of talent pool with “big picture thinking” and the ability to view the broader role of the GLRO within the RDICE ecosystem.
• GLROs have not fully utilised their resources to nurture the next generation of high-tech talent in key strategic areas of the nation’s competitiveness. This is because many GLROs do not work closely with institutions of higher learning to provide training and support the career development of these hightech talent.
• The local high-tech education curriculum has not been seamlessly integrated with the applied, experiential, and translational knowledge that can be provided by GLROs to students.
• Existing talents are domain-focused due to a lack of interaction with other players in the RDICE value chain, such as GLROs, university representatives and international partners;
• R&D funding for most GLROs is mainly sourced from the national government. R&D funding from private sector contributors averages less than 10 per cent. This is because the R&D undertaken by GLROs do not meet the needs of the industry, and there is a lack of trust between the industry and GLRO due to the competitive nature of GLROs.
• Fluctuations in R&D expenditure due to uncertainties in national R&D funding from shifting priorities in government policies and goals significantly influence R&D funding.
• There is a lack of coordinated national strategy on RDICE and long-term R&D investments in key strategic research focus areas. This adversely impacts the long-term development and trajectory of the GLROs and their contribution to the key STIE strategic areas in Malaysia.
• Due to the lack of longterm planning and funding mechanisms for GLROs, many tend to prefer smaller-scale projects which do not meet the needs of the industry.
• Lack of long-term funding for GLROs also prevents them from investing in the “blue-sky” R&D that will lead to frontier and disruptive technologies.
• Lack of long-term funding also perpetuates the “lock-in” culture among local industries to be highly dependent on foreign technologies and very low levels of technology and knowledge transfers that takes place to local institutions of learning the industry.
• The lock-in culture among local industry players hinders them from moving up the global STIE value chain.
• Commercialisation of research outputs remains very low among GLROs with a small number of activities in the transfer of technologies.
In summary, the challenges faced by Malaysian GLROs are as follows:
• Lack of leadership in balancing their role in undertaking R&D activities, STI entrepreneurship (local industry development) and making broader contributions to ecosystem development – contribute to the development of other players in the ecosystem such as university (researchers and students), other research institutions, industries (especially micro and SMEs), the diverse communities across the country, government agencies and policy-makers.
• There is a lack of talent (“big picture thinking”) among GLROs to examine their role in the context of the entire RDICE value chain. Many GLROs operate in silos; hence are unable to create and capture the multiplier impact and network externalities in an increasingly converging STI platforms environment. This has led to many missed opportunities for Malaysia to provide leadership in several STIE areas in the region and globally.
• Many GLROs focus on deriving ROI and, as such, focus on short-term outcomes of increasing profitability instead of deriving ROV for the other players in the RDICE ecosystem.
• Many GLROs compete for talent, resources and markets, and do not see themselves as a “public good” to nurture the dynamic capability (absorptive, adaptive, and innovative capabilities) of all players in the ecosystem.
• The financial model of GLRO is not appropriate to ensure the entities serve as a public good; instead, many pursue strategies to maximise their profits, leading them to “crowd-out” research institutions/universities for national research grants and industries for market share. The ‘crowding-out’ factor leads to a lack of trust between GLRO and other research institutions/ universities and industry players.
• GLROs are highly dependent on government funding; hence, fluctuation in the annual national budget hinders sustained funding and growth of GLROs development, research outcomes and impact. These has an adverse impact on national STIE development and competitiveness of local industries.
• There is a lack of policy research undertaken by GLROs, including foresighting and forecasting new STIs and their impact on key economic sectors. As such, many of the STIs developed by GLROs do not meet the needs of the industry or are outdated.
• The fragmentation in the RDICE
ecosystem due to weakness in the GRLO business model has resulted in very low translation of local R&D from universities/research institutes into commercialisation activities.
• Weaknesses in the GLRO ecosystem have led to a “lock-in” culture (high dependence) of local industries on foreign players for STI to improve their products and services. Hence, many Malaysian industries do not invest in local R&D and operate at the lower end of the STI value chain. Many compete on cheaper prices, as opposed to quality and design sophistication.
CHAPTER 4
4 Refer to Nair et al. (2022)
5 The STIE sovereignty definition leverages on the “Technology Sovereignty” notion provided in Edler et al. (2023). The STIE sovereignty expands to cover broader categories, which include scientific pursuits, innovation and economic development
6 EPU (2016a and 2016b)
7 For details on “STIE Sovereignty” refer to Nair et al. (2023)
MEASURING RETURN ON VALUE (ROV) AND IMPACT TO NATIONAL DEVELOPMENT
In this section, we discuss a new concept of ROV4, which is useful in providing a more comprehensive assessment and measurement of the value of a GLRO to the nation. Many studies measure the ROI of GLRO; however, the traditional ROI approach does not capture many of the intangible impacts of GLRO on the national innovation ecosystem. In this chapter, we outline GLROs’ value to the national STIE ecosystem. In particular, GLROs’ role in ensuring “STIE Sovereignty”.
STIE sovereignty is defined as “the ability to possess and develop scientific know-how, technology, and innovations (with minimal reliance on foreign players and non-state actors) that are critical for protecting national security, economic security, environmental sustainability, and societal development of the nation”5
The above definition clearly highlights that the role of GLROs extends beyond supporting economic development but is critical for protecting the national interest, particularly the geopolitical integrity of a nation-state. This has far-reaching consequences on sustainable development, global competitiveness and the quality of life of people in the nation.
This chapter is organised as follows. In Sector 4.1, the role of GLROs in nurturing STIE Sovereignty is discussed. Section 4.2 discusses the conceptual framework to characterise and measure the GLROs’ ROV to the nation. Here, detailed metrics to measure the ROV are provided. In Section 4.3, traditional methods of measuring the performance of GLROs are discussed, and we estimate ROV for MIMOS Berhad and STC-MIMOS (a subsidiary of MIMOS). In Sector 4.4, concluding remarks are provided.
Role of GLRO in Ensuring STIE Sovereignty
In this section, we discuss the role GLROs play in building the “STIE sovereignty” of the nation. The role of GLRO is pertinent to ensure local industry and other stakeholders in the economy do not become overly dependent on foreign technology and prevent a “lock-in” culture by local players6. This technological lock-in of local players perpetuates the middle-income trap the Malaysian economy struggles to transition out of. The reliance on foreign science and technology impedes local industries from building the necessary capacity to innovate and move up the value chain. It also potentially compromises the technological independence and integrity of key national infrastructure and security.
In this context, GLROs are seen as neutral entities that fill the role of “trust partners” to bring all players in the ecosystem to work towards translating fundamental research undertaken by universities and research institutes into applied research. GLROs are seen as the “glue” that binds university/research institutes, industry, and the community. A strong STIE network enabled by GLROs will lead to positive translational outcomes that help the local industry enhance its competitiveness and solve challenges that impact the people.
STIE sovereignty is critical for meeting the strategic national objectives and priorities, which include the following7:
• provide policymakers strategic homegrown STI tools and solutions in addressing any external shocks to the country – e.g. natural disasters, health pandemics, global market volatilities, and other negative market externalities;
• develop local technologies to mitigate risks that impact the socioeconomic, political, environmental, healthcare, energy, food, and water systems; including national security threats;
• safeguard STI access and help develop dynamic capabilities and competitiveness of local researchers, scientists, and industries amidst intensive global economic competition;
• work closely with other players in the ecosystem to develop cost-effective, frugal technology and innovation that are accessible to micro, small, and medium enterprises to improve their competitiveness;
• increase the use of local technologies and solutions to improve the quality of life of vulnerable and bottom 40% of the population (B40) communities; and;
• ensure the societal and strategic development of all segments of the population are addressed, especially in reducing poverty and inequalities across the different regions in the country.
To ensure GLROs deepen their impact on the long-term socioeconomic development of the nation, there is a need to transition the thinking from a short-term and narrow ROI perspective to one that nurtures a more strategic and longterm ROV STIE mindset. This is critical to protect national strategic industries and sectors; and preserve the economic, social, and geopolitical security of the nation.
Figure 22 shows that GLROs play a critical role in fostering strong partnerships between the following players in the ecosystem:
Institutions of Higher Learning (IHLs) where primary researchers in the country are located and much of the fundamental and applied research is being undertaken.
Government Agencies (GOV) these include other public research institutions that undertake translational R&D and government agencies that adopt this R&D to enhance their efficiency and address national priority development agendas.
Industry Players (IND) the users of the research undertaken by IHLs and other government agencies to enhance process improvement and product development.
Community (Rakyat) (COM) the users of the STIs to improve their quality of life.
A strong local STIE network led by the GLROs is critical for ensuring STIE Sovereignty of the nation, which has a “knock-on” impact on the following:
• National Security – development of homegrown STIs to protect the nation against foreign elements that can harm the geopolitical and territorial integrity of the nation.
• Economic Security – development of local technologies and business models that will enhance the competitiveness of local industries and protect them from market volatilities and external shocks. A strong domestic STI footprint is critical for not only enhancing the competitiveness of local industry and workforce but also attracting high-end talent, technology, and innovation into the country.
• Environmental Sustainability –development of local technologies and solutions to ensure all development plans are aligned to best global practices with respect to planetary health, biodiversity and conservation efforts.
• Societal Development – development of new technologies and capability development programmes to improve the quality of life of the marginalised, rural and vulnerable communities.
In summary, the role of GRLOs is critical in ensuring the development of a sound national STIE ecosystem and enabling the nation to meet the United Nation’s Sustainable Development Goals. More importantly, a sound STIE ecosystem is critical for ensuring the independence of the nation-state and its territorial integrity is preserved.
Strong
8 Economic Planning Unit
– Prime Minister’s Office (2016)
9 For details on ROV dimensions, refer to Nair et al. (2022)
On the other hand, weak and under-funded GLROs will hinder the formation of a strong local STIE ecosystem. This will hinder the seamless flow of fundamental, applied, and translation research outcomes from universities/ research institutes to industry and the community. Weaknesses in the GLRO ecosystem will see local industry players and communities become dependent on foreign players to meet their STI needs. Sole reliance on foreign STIs will place many local industries and sectors at the mercy of foreign competitors and markets. Prolonged dependence on foreign STIs will perpetuate a culture of “Lock-in” among local players to foreign technology8. This will hinder local STI development, especially in deep-tech and frontier STI areas. This could pose major challenges to the national security, economic security, environmental sustainability, and societal development agenda of the nation. Without a sound STIE ecosystem, countries will find it difficult to navigate the disruptive, volatile, uncertain, complex, and ambiguous (DVUCA) world we live in presently (as shown in Figure 23).
Weak GLRO lead to fragmented STIE Network
Weak Local STIE Supply Chain Operate at the Lower-end of the Global Innovation Value Chain
Highly dependant on Foreign Players for STIE development
Lock-In to Foreign STIE
Weak Network Externalities unable to capture Multiplier Impact among Ecosystem Players
initiatives); and, branding and positioning the nation globally (building strong regional and global prominence in key strategic areas)9
ROV is the value gained because of the continuous improvement of the STIE ecosystem, which entails the 8i enablers of the ecosystem – infrastructure, infostructure, intellectual capital, integrity system, interaction, institutional leadership, interaction, and internationalisation A sound 8i-STIE ecosystem enabler is envisaged to enhance the dynamic capabilities (absorptive, adaptive, and innovative capabilities) of the GLRO and key stakeholders in the ecosystem.
Strong dynamic capabilities of the GLRO and key stakeholders in the ecosystem will enhance ROV. Hence, ROV is derived using new science & technology drivers, systems, processes, and new business models. It is a more holistic perspective compared to just ROI. The ROV examines a broader set of dimensions (direct & indirect effects) to the ecosystem players and the economy. ROV also leads to greater spillover impacts on the broader society and economy. Figure 24 shows that building strong preconditions, such as creative talent, new
Local STIE unable to address the challenges of the Disruptive, Volatile, Uncertain, Complex & Ambiguous (DVUCA) World
Over-dependance on foreign STIE increases the risk to National Security, Economic Security, Environmental Sustainability & Sosioeconomic Development
Weak and fragmented local STIE Network - unable to generate spillover and multiplier impact
Not globally competitive ecosystem players and unable to capture multiplier impact - become overly dependent on foreign STI players. This exposes the nation to major security and sustainability risks.
Framework for Measuring the ROV and Impact
To ensure STIE sovereignty, GLRO needs to capture six important value-creation dimensions: creative talent (both supply and demand of the talent stock); new knowledge (innovation and discoveries); knowledge networks and value chains (both at the local and foreign levels); wealth creation (contribution to jobs, competitiveness and gross domestic product – GDP); societal development (improving quality of life and planetary health
knowledge formation, knowledge networks, and value chains within the ecosystem, can enhance the value drivers in the later stages of the ROV cycle. These value drivers form the main drivers for wealth creation and societal development (including environmental impact). All of which will enhance the branding and positioning10 of the ecosystem and the economy. By having a strong foundation in the preconditions, the ecosystem is then able to deliver higher ROV over time.
Increasing the regional and global prominence of Malaysia’s innovation ecosystem is not just the responsibility of any single organisation.
Figure 23: Gaps in the GLRO ecosystem, Lock-In to Foreign STIE & Challenges for the nation
Source: Analytics by Sunway IGSC
IHL GOV
IND GLRO COM
DVUCA WORLD
There needs to be a concerted effort from all relevant stakeholders to ensure greater value-creation opportunities for every player in the ecosystem. These include strategies to ensure the following: consistency in macroeconomic and industry policies, including STI policies; adherence to global best practices and standards; putting in place business and investor-friendly policies; ensuring political stability to attract high-end FDIs into the country and other initiatives that will increase the ROV and ROI for investors into the ecosystem.
The collective action of all parties in the ecosystem that creates value for all stakeholders in the ecosystem is called Shared Ecosystem Value (SEV). Figure 18 shows the key players within the innovation ecosystem. The symbiotic strategic partnerships and interactions among them are critical in generating optimal ROV for all stakeholders and the economy. In essence, the whole ecosystem’s ROV is greater than the sum of the ROVs generated by the individual players.
In the context of this study, the role of GLRO is important in creating the SEV in partnership with other players in the ecosystem.
Without the GLRO, the SEV will not be realised. The GLROs make up an important piece of the puzzle of the national innovation ecosystem. It ensures national STIE sovereignty – the ability of the ecosystem and economy to be an important player in the development and use of cutting-edge technological innovations and breakthroughs. These will be critical for local industry players and workforce to leverage new STIs and more importantly, build strong global competitiveness.
24: Return-on-Value (ROV) Transmission Mechanism
Source: Analytics by Sunway IGSC
Figure
Multiplier Effects
Shared Ecosystem Value (SEV)
Figure 25 shows a “Complete STIE Ecosystem” with GLROs playing a key role in generating optimal ROV for all stakeholders in the ecosystem and country. These include working closely with all players in the ecosystem to jointly create SEV. The figure also shows an “Incomplete STIE Ecosystem” without the GLRO. The absence of the GLRO will lead to the ecosystem being unable to provide access to state-of-the-art research facilities, access to specialised talent, capability development programmes, and facilities for undertaking innovation and commercialisation activities.
In many countries, GLROs were originally established to work in partnership with higher education institutions to translate fundamental research into applied research that may have commercial potential. GLROs also complete the innovation cycle by providing the necessary R&D, facilities, and support services for the industry to improve its processes and product development. While many of them were established to create ROV for the entire STIE ecosystem, corporatisation and privatisation of the GLROs may result in many of them focusing on increasing their profitability, giving less priority to generating greater value for key players in the STIE ecosystem. In some instances, the GLRO competes with institutions of higher learning for competitive national grants. They also compete with industry players for market share. These behaviours will undermine trust between these two market players and GLROs. Hence, this results in a fragmented STIE ecosystem and the generation of very low ROV, as shown in Figure 26.
Complete STIE ecosystem The role of the GLROs in the STIE ecosystem
Incomplete STIE ecosystem If the GLROs are removed from the STIE ecosystem
• The STIE Ecosystem's sum is more than its parts, with each stakeholder contributing towards a greater good.
• GLROs are meant to create ecosystem impacts, which may not show up in their ROI or balance sheet
• If any key stakeholders are removed from the picture, the optimal ROV may not be realised
Incomplete STIE ecosystem
GLROs crowding-out Higher Education Institutions and compete with Industry
• When GLROs "crowd-out" R&D investments of IHLs, IHLs will be reluctant to work with GLROs.
• When GLROs compete with industry for market share, firms will not collaborate with GLROs.
• The above GLROs' strategic posture will undermine the trust factor with IHLs and firms, resulting in low ROV
Figure 25: Role of GLRO in Generating Shared Ecosystem Value
Source: Analytics by Sunway IGSC
Figure 26: Negative Externalities - GLROs Crowding-Out Impact on the STIE Ecosystem Source: Analytics by Sunway IGSC
ROV ROV
As shown in Figure 27, the ROV of GLROs is measured through the “6-Dimensions of Impact”, which covers the following: creative talent, new knowledge, knowledge networks & value chain, wealth creation, societal development, and branding & positioning. In the context of STIs, managing resources effectively and efficiently will enhance the value proposition of the STI initiatives for all stakeholders. This will increase shareholders’ ability to raise their ROI by bringing in foreign direct investment into the ecosystem and the nation. ROI is, hence, a function of ROV.
However, to move to the ROV approach, a system-wide mindset change towards a values-centric perspective is needed, where both the tangible (direct) and intangible (indirect) impacts on key stakeholders and the economy are captured.
Figure 28 shows the identified metrics that capture the six ROV dimensions. Detailed metrics for the computations of the ROV are shown in Figures 28 to 34. The computations are undertaken based on the available data for the GLROs.
The list of indicators for each of the ROV metrics is not exhaustive. The indicators may vary according to the types of institutions, industries, regions, and communities that are studied.
Figure 27: Return on Value Dimensions Adapted from Nair et al. (2022)
• Contribution to the economycreation of new economic sectors
• Increase in national wealth (GDP)
• Number of Intellectual Properties (IPs) produced by the GLRO
• Number of new impactful ideas, innovations, discoveries & business models
• Number of products/services brought to market
• Sales/revenue commercialised
• Number of joint Intellectual Properties (IPs) produced with external parties
• Cost and revenues of IPs (sharing)
• Number of products/services brought to the market
• Sales/revenue commercialised
• Number of consultancies undertaken
• Number and types of valueadded activities with the external stakeholders
• Number of IPs commercialised that have applications in society's well being
• New innovations and discoveries that empower the popoulation and improve their health and well-being
• Number of IPs commercialised and innovations that have applications in effectively managing the environment and biodiversity conserving efforts
• Amount of Foreign Direct Investment (FDI) attracted
• Amount of nongovernmental funding & non FDIs attracted to the entity (e.g. international grants)
• Number of global and regional collaborations that lead to technology- and knowledge-transfers
The list of indicators for each of the ROV metrics is not exhaustive. The indicators may vary according to the types of institutions, industries, regions, and communities that are studied.
Figure 28: Key Metrics for Capturing Tangible and Intangible ROV Impact Source: Analytics by Sunway IGSC
• Number of skilled workers (e.g. managers, professionals, researchers, techicians)
• Number of semi-skilled workers (e.g. clerical support, service & sales workers, skilled agricultural, forestry, livestock & fishery workers, craft & related trades workers, plant & machine operators and assemblers)
• Average salary per skilled/ semi-skilled worker (data available on DOSM)
• Number of students enrolled and graduated from the GLRO training programmes
• Cost of training programmes
Value of Talent Demand
= Σ Average Salaryj * Number of Workersj Employed
( j is for each category of workers: skilled/semi-skilled)
• Number of IPs produced by the GLRO, which include the following:
- Publications (see Moretta et al (2022)1 for valuation of scientific publications)
- Patents (see Appendix 1 for patent guide evaluation)
- Number of impactful ideas, innovations and business models
- Number of products and services brought to the market
• Cost and revenue of the IPs mentioned above
• Number of products/services brought to market (i.e. successfully commercialised) solely by GLRO
• Sales/revenue of commercialised products/ services Key Metrics Key Metrics
Value of Talent Supply
= Σ Cost of Training Programmej * Number of Students Trainedj
( j is for each type of training programme, use market equivalent cost if programme is free; valuation based on willingness to pay approach)
Net Revenue from Training
= Revenue Earned - Cost Incurred
Value of New Knowledge:
a) Cost approach
= Σ Cost of developing IPj
b) Income approach
= Σ Expected economic income of IP adjusted to present dayj
c) Market approach
= Σ Number of IPj * Average price paid for similar IP in the marketj
( j is for each unique IP produced)
Value of New Knowledge
= Σ Value of sales/revenue of commercialised product/servicej
( j is for each unique product/service commercialised)
Figure 29: Key Metrics and Value Estimation Guide for Creative Talent Source: Analytics by Sunway IGSC
Figure 30: Key Metrics and Value Estimation Guide for Generation of New Knowledge Source: Analytics by Sunway IGSC
Creative Talent (Supply & Demand)
New Knowledge (Innovation & Discoveries)
Total
Knowledge Networks & Value Chains (Local & Foreign)
• Number of joint IPs produced with external parties:
- Publications (see Moretta et al (2022)1 for valuation of scientific publications)
- Patents (see Appendix 1 for patent guide evaluation)
- Number of impactful ideas, innovations and business models
- Number of products and services brought to the market
• Cost and revenue of the IPs
• Number of products/services brought to market (i.e. successfully commercialised) jointly with external parties
• Sales/revenue of commercialised products/ services
Value of New Knowledge: a) Cost approach
= Σ Cost of developing IPj
b) Income approach
= Σ Expected economic income of IP adjusted to present dayj
c) Market approach
= Σ Number of IPj * Average price paid for similar IP in the marketj
( j is for each unique IP produced)
• Number and type of valueadded engagements for the following processes via various hubs, labs, and facilities for products/ services that did not/ have yet to make it to market:
- Design
- Experimentation
- Prototyping
- Simulations & Testing
- Business Model/Plan Development
- Quality Control
- Branding & Marketing
- Other value-creating activities
• Potential market value of products/services in development
• Cost of facility usage
Value of Knowledge Networks
= Σ Value of sales/revenue of commercialised product/servicej
( j is for each unique product/service commercialised)
Value of Value Chain
= Σ Value of consultancy contracts and valie
Value of Value Chains: a) Cost approach
= Σ Cost of facility access for each engagementj
b) Market approach
= Σ Estimated market value of product/servicej * Σ weights of development phasesj ( j is for each unique product/service engaged)
Example Valuation:
1. Potential market value of product A = RM10
2. Engagement with entity started at prototype and ended at business plan phase. Σ weights = 0.5
3. Estimated value-add of developing product A = RM10 million * 0.5 = RM5 million
Figure 31: Key Metrics and Value Estimation Guide for Knowledge Networks & Value Chains
Source: Analytics by Sunway IGSC
ROV for Knowledge Network & Value Chain
Key Metrics
• Number of jobs created by the use of IPs of products/services produced
• Average salary of jobs created by the use of IPs or products/ services produced (data available on DOSM)
• Contribution to the economy, GDP
Value of Job Creation
Type Value Type Value Estimation Guide Value Estimation Guide
ROVCT1
= Σ Average Salaryj * Number of Workersj Employed by the use of commercialised IPs or products/services ( j is for each category of workers: skilled/semi-skilled)
Value added contribution to GDP
ROVCT2
= Σ Income from Innovationj - Operation Cost of Innovation
Marginal propensity to consume
Total Income = Income of GLRO employees + Additonal Income of other employees using GLROs' IPs (in other organisations)
Note:
MPC 2000-2019 is 0.61 (MPC for poor is around 0.8; while it is around 0.2 for the rich) For every RM1 generated, close to RM2.56 to the economy.
32: Key Metrics and Value Estimation Guide for Wealth Creation
Source: Analytics by Sunway IGSC
Key Metrics
• Number of IPs and commercialised products/ services that have applications in societal well-being
• New innovations and discoveries that improve the quality of life
• Number of users of the IPs generated and services provided by the GLROs
• Number of IPs and commercialised products/ services that have applications in improving the environmental health
ROVSD = Sum of all the savings derived for productive endeavours
Value of Societal Development
= Estimated number of usersj * Value gained from reducing incidence of negative outcome or increasing incidence of positive outcomej ( j is for each unique product/service with relevant application)
Example 1:
• GlucoSenz (new technology) increases patient compliance with blood glucose level monitoring and improves early diagnosis & management outcomes, reducing burden of diabetes by 20% from RM5,000 per year per patient to RM4,000 per year per patient.
• Estimated value-added = 50,000 users * RM1,000 per year = RM50 million per year
Example 2:
Value of Societal Development
= Σ Value gained from reducing negative environmental outcomes or enhancing positive environmental outcomesj (see example below) ( j is for each unique product/service with relevant application)
• Identity theft costs Malaysians RM 1 billion a year
• MyDigitalID is used by the government to verify identities and reduced incidence of identity theft by 30%
• Estimate value-added = RM 1 billion per year * 30% = RM300 million per year
All figures used in examples above are just for illustration purposes
Source: Analytics by Sunway IGSC
Example 3:
• Industrial pollution costs RM1 billion in environmental damages per year
• MIMOS developed sensors reduced pollution incidence by 40%
• Estimated value-added = RM1 billion per year * 40% = RM400 million per year
Figure
Figure 33: Key Metrics and Value Estimation Guide for Societal Development
Wealth Creation (GDP, Jobs & Competitiveness)
Societal Development (Quality of Life)
Total ROV for Creative Talent (ROVCT) = ROVCT1 + ROVCT2
Branding & Positioning
(Global & Regional Prominence)
• Amount of Foreign Direct Investments (FDIs) attracted into the country
• Amount of non-governemental funding and non-FDIs funds attracted (e.g. local idustry funding, research grants, etc.) into the country
Total
Value of Branding & Positioning
= Σ Value of FDIs
Source: Analytics by Sunway IGSC ROVBP1 ROVBP2
= Σ Value of FDIs as % of all FDIs in Malaysia
Value of Branding & Positioning
= Σ Value of non-FDIs and non-government funding
Based on the above six-dimensional measure, we then compute the total ROV for the GLRO as:
where i = 1 to 6 are the aggregated ROVs for the six measures defined in Figures 28 to 35.
Measuring ROV and Impact of a Malaysian GLRO - MIMOS and MIMOS STC
In this section, we report the ROV measures for MIMOS and STC based on the proposed ROV framework. To measure the impact of MIMOS & STC through an ROV analysis, the indicators (as shown in Figure 34) for each of the ROV components were used. For example, under the “Creation of talent through sharing of knowledge (ROVCT)”, we collected data on the number of skilled and semi-skilled talent produced through MIMOS STC’s various programmes such as the Post-School Finishing Programme (PSF), which trained 580 graduates in National IC Design Talent Development and is jointly funded by Ministry of International Trade and Industry (MITI), Malaysian Investment Development Authority (MIDA), Ministry of Education (MOE), Electrical and Electronics Productivity Nexus (EEPN), and the Collaborative Research in Engineering, Science and Technology Centre (CREST);
ROV for Branding & Positioning (ROVBP) = ROVBP1 + ROVBP2
Figure 34: Key Metrics and Value Estimation Guide for Branding & Positioning
Globally and locally recognised (ROVBP)
• Amount of Amount of Foreign Direct Investment (FDI) attracted
• Amount of non-gvernmental funding & non-FDIs attracted to the entity (e.g. international grants)
Responding to social and environmental needs (ROVSD)
• Number of IP commercialised that have applications in society well-being
• Number of IP commercialised that have applications in environmental health
• GDP increase (contribution to E&E and related industrial sectors)
Creation of talent through sharing of knowledge (ROVCT)
• Number of skilled workers
• Number of semi-skilled workers
• Average salary skilled/semi-skilled workers
• Number of enrolled/graduated from students from training
• Cost of training programmes
Activities in IP & patents creations (ROVNK)
• Number of IP solely produced
• IP production cost
• Number of product/service brought to market
• Sales/revenue commecialised
Sharing of knowledge through collaborations and leveraging of specialties (ROVKN)
• Number of joint IP produced with external parties
• Cost and revenues of IPs (sharing)
• Number of product/service brought to market
• Sales/revenue commercialised
• Number of consultancy
• Number and types of value-added activities with external stakeholders
Using the data obtained from MIMOS, all the key metrics within the six ROV components (quantum and value) were computed and presented in Figure 35 from 2006 to 2021. Note that, among all six components, MIMOS’ role in branding and positioning Malaysia as a leading electrical & electronics (E&E) sector was critical. It was an important entity for attracting FDIs in the E&E sector. MIMOS also played a key role in supporting the Multimedia Super Corridor (MSC) framework and the Malaysian Cyber Security Strategy for the nation. All of which brought significant positioning of Malaysia as a leading high-tech hub in the region. In this context, MIMOS has contributed significantly to the “Shared Ecosystem Effect”; particularly in transforming Malaysia into an industrial powerhouse in the E&E sector.
The total ROV for MIMOS is presented in Figure 37. MIMOS’ ROV is calculated by measuring the value from each 6-Dimensions of Impact, which totals RM905.83 billion, for the period 2006-2021. If we compare the ratio between the ROV calculated and the total expenditure of MIMOS over the same time period (RM4.05 billion), it was found that the ROV is 222 times the investment. This means that for every RM1 of expenditure by MIMOS, the economy gained RM222 in value from spill-over benefits that support development for national development. Even if we omit the largest contributor of ROV, which is Branding and Positioning (RM737.01 billion), the ROV is almost 41 times that of investment into MIMOS STC.
Figure 35: Key metrics to measure ROV of MIMOS and STC
Source: Analytics by Sunway IGSC
• Average Internal Staff Talent per Year - Number: 770 - Value: RM80M
• External Training of Talent - Number: 256 - Value: RM0.4M
• Malaysia Cybersecurity Strategy (MSCC) - Shared Value: RM481B
Figure 36: Main Contributors to MIMOS’s ROV Source: Analytics by Sunway IGSC
Source: ROV estimations by MIMOS and Sunway Institute for Global Strategy and Competitiveness (IGSC)
For the period of 2006-2021:
• Total Expenditure (inv): RM4.05 billion.
• Total Revenue: RM2.71 billion.
• Total ROV: RM905.83 billion.
• ROV is 222 times the investment.
• For every RM1 of expenditure by MIMOS, the economy gained RM 222 in value from spillover benefits that supports development for the industry and academia.
• Branding and positioning of MIMOS, together with ecosystem partners (e.g. MDEC), is key in attracting FDIs into Malaysia by offering a comprehensive supporting ecosystem. Value Drivers
[1] Creative talent: Number of skilled workers X average salary of workers + (number of students/trainees X revenue from training (including estimated revenue from complimentary training) - cost of training per pax)
[2] New knowledge: Revenue from IP generated - total cost of publishing IP
[3] Knowledge networks: Value of consultancy contracts + value of product contribution to external parties + value of product developed to market + value of services to external parties (e.g., cost savings on product defects/rejects from STC failure analysis)
[4] Wealth creation: (Number of jobs created internally X average internal salary + number of jobs created from FDI spillover X average salary of FDI spillover + number of people with improved employability by specialised training X average salary + number of people employed in spinoff company X average salary in spinoff company) X multiplier effect (marginal propensity to consume of 0.37, thus multiplier effect of 1.59 for every RM 1 earned from jobs created related to STC. The number of jobs created from FDI spillover is based on the estimated job creation from investments of similar level. Average salary of workers from FDI is set to be the market estimate for experienced engineers at RM 7,000 per month
[5] Societal development: Cost savings for industry and academia for using shared facilities. This segment is currently severely underestimated due to a lack of data and information on the societal applications and impact of STC's products and services. More work is needed to obtain a closer estimate
[6] Branding & Positioning: Amount of FDIs attracted where STC served as a key reference centre during the potential FDI evaluation process
[7] Total ROV = [1] + [2] + [3] + [4] + [5] + [6]
Figure 37: Estimated Total ROV generated by MIMOS Source: Analytics by Sunway IGSC
Next, we measure the ROV for the Semiconductor Technology Centre (STC), a subsidiary of MIMOS. The key roles of STC in the STIE ecosystem are as follows:
1. Enable industry and academia in their R&D and D&D pursuits through its ecosystem services.
2. Facilitation for upstream semiconductor development.
The following are the historical achievements of MIMOS STC:
1991 - developed Malaysia's first voltage contrast technique for FA on SEM in collaboration with AMD Penang.
1994 - introduced Malaysia’s first locally designed IC, the 16-bit RISC microprocessor, Pesona.
1996 - established Malaysia’s 1st for IC fabrication, CMOS 1um process transfer from IMS, Germany.
1998 - Smart Computing Sdn Bhd was formed to manufacture and supply modern, reliable, affordable personal computers and related peripherals.
2001 - developed MIMOS/Malaysia’s 1st commercial-grade MEMS accelerometer sensor system integrated with readout circuits together with German partner, Itzehoe.
2002 - commissioned a new industrialclass wafer fabrication plant (Fab 2), 0.5 micron digital CMOS technology, 8-inch, 3,000 wafers per month.
2002 - launched Malaysia‘s first 0.35 micron EEPROM chip (electronically erasable programmable read-only memory) through My-Ms (subsidiary).
2004 - developed 1st National MEMS Roadmap in collaboration with industries.
2005 - supported AKN-MEMS Technology device development programme on behalf of the government of Malaysia.
2011 - thirteen key players in the Electrical and Electronics (E&E) sector comprising 12 companies and one university signed an MoU to tap into Advanced Shared Services Facilities.
2012 - released Mi-MSCAN TpH, the world’s first Ion-Sensitive Field Effect Transistor (ISFET)-based calibration-less temperature and pH sensor.
23 November 2015 - launched a 40pin small-footprint QFN package with an integrated on-chip oscillator, ADCs, voltage references and regulator Green Motion Controller Integrated Circuit (GMCIC MCGP021).
14 June 2017 - introduced Malaysia's first eight-inch graphene wafer in Malaysia (Mi-GraphWafer) for advanced electronics applications.
29 October 2018 - launched an ultrasonic atomiser system for nanomaterial coating, Mi-Atomizer 3.0, and NSW Automation.
2020 - developing foundry-compatible 2DNM and GaN processes and devices for applications in high power/high-speed devices, thermal management, and sensors.
Using the ROV framework and the information obtained from MIMOS, the six ROV components (quantum and value) for STC were computed and presented in Figure 39. As a training and support services facility for the E&E industry, STC was able to not only provide training support for academia and industry but was also highly regarded as a testing facility for industry players. These included foreign multinational and regional countries using STC for their high-end testing of E&E products. The international recognition as a leading training and testing facility has attracted many foreign players to open their factories in Malaysia. This contributed to the “Shared Ecosystem Effects” of close to RM11.3 billion from 2006 to 2011.
The total ROV for STC is shown in Figure 40. The total ROV generated by STC was found to be RM13.08 billion for the period 20062021. If we compare the ratio between the ROV calculated and the total expenditure of STC over the same time period (RM0.38 billion), we can see that the ROV is 34 times the investment. This means that for every RM1.00 of expenditure by STC, the economy gained RM34 in value from spill-over benefits supporting industry, academia, and national development. Excluding the largest contributor of ROV, which is Branding and Positioning (RM11.3 billion) from the STC ROV computations highlight that the STC’s ROV is almost 4 times that of investment into the entity.
• Jobs Created & Contribution to GDP1 (inc. FDI spillover)
- Number: 6,085
- Value: RM700M
• Employability via Training & Contribution to - Number: 5,445 - Value: RM405M
Limited Data Available • Shared Facilities - Value: RM46M
• Foreign Direct Investments Attracted using STC as Reference Centre - Number: 5 high-tech manufacturing plants (Infineon, Silterra) - Value: RM11.3B
Source: ROV estimations by MIMOS and Sunway Institute for Global Strategy and Competitiveness (IGSC)
For the period of 2006-2021:
• Total Expenditure (inv): RM0.38 billion.
• Total Revenue: RM0.062 billion.
• Total ROV: RM13.08 billion.
• ROV is 34 times the investment.
• For every RM1 of expenditure by STC, the economy gained RM34 in value from spillover benefits that supports development for the industry and academia.
• Branding and positioning of STC is key in attracting FDIs into Malaysia by offering comprehensive supporting ecosystem.
• This is achieved by having state-of-the-art facilities and talent in production, top testing, and training capabilities.
[1] Creative talent: Number of skilled workers X average salary of workers + (number of students/trainees X revenue from training (including estimated revenue from complimentary training) - cost of training per pax)
[2] New knowledge: Revenue from IP generated - total cost of publishing IP
[3] Knowledge networks: Value of consultancy contracts + value of product contribution to external parties + value of product developed to market + value of services to external parties (e.g., cost savings on product defects/rejects from STC failure analysis)
[4] Wealth creation: (Number of jobs created internally X average internal salary + number of jobs created from FDI spillover X average salary of FDI spillover + number of people with improved employability by specialised training X average salary + number of people employed in spinoff company X average salary in spinoff company) X multiplier effect (marginal propensity to consume of 0.37, thus multiplier effect of 1.59 for every RM 1 earned from jobs created related to STC. The number of jobs created from FDI spillover is based on the estimated job creation from investments of similar level. Average salary of workers from FDI is set to be the market estimate for experienced engineers at RM 7,000 per month
[5] Societal development: Cost savings for industry and academia for using shared facilities. This segment is currently severely underestimated due to a lack of data and information on the societal applications and impact of STC's products and services. More work is needed to obtain a closer estimate
[6] Branding & Positioning: Amount of FDIs attracted where STC served as a key reference centre during the potential FDI evaluation process
[7] Total ROV = [1] + [2] + [3] + [4] + [5] + [6]
Figure 38: Main Contributors to STC’s ROV Source: Analytics by Sunway IGSC
Conclusions
In this chapter, we highlight the role of GLROs in the STIE ecosystem. One of the important contributions of GRLOs is to be a “trust partner” for other players in the ecosystem. A strong “trust partner” is important to enhance the reach and richness of the STIE ecosystem in a country. One of the key features for GLROs to be a trust partner is that it should not crowd out other players in the ecosystem. The role of GRLOs is also important in ensuring “STIE Sovereignty” – that is, enhancing the ability of nations to protect their national interests and ensure sustainable socioeconomic development. These include addressing some of the challenges faced by people, industries, and other stakeholders in the country with respect to the DVUCA world and climate change. A sound STIE ecosystem is critical in providing solutions for climate change mitigation and adaptation technologies and strategies.
This chapter also highlights that the traditional ROI approach to assessing GLROs underestimates the value of these entities to the Malaysian economy. Here, we highlight that GLROs are an important “public good” that is critical for the national security and global competitiveness of the country. Hence, a more appropriate assessment of the GLROs is a “valued-based” approach, where the ROV for these GLROs is estimated, and appropriate investments in developing the enablers of the GLRO ecosystem are needed to enhance the dynamic capability (absorptive, adaptive, and innovative capabilities) of these entities. As they build strong dynamic capabilities, it will have a spillover impact on other players in the ecosystem (institutions of learning, research institutes, industry, government agencies and the rakyat/people).
CHAPTER 5
RECOMMENDATION AND WAY FORWARD
RECOMMENDATIONS AND WAY FORWARD
GLRO Enterprise ROV (GERoV) Model
In Chapter 4, it was highlighted that the GLROs play a key role in the national STIE ecosystem. They are an important public good that plays a pivotal role in ensuring “STIE Sovereignty” is ensured for a nation. STIE sovereignty is critical for a nation to protect its national security, economic security, environmental sustainability of its national habitat, and societal development. GLROs’ critical role in providing the necessary scientific and technological knowledge and ensuring the geopolitical integrity of a nation-state cannot be underestimated. The accelerating evolution of high-impact emerging technologies such as Generative Artificial Intelligence, advanced materials, nextgeneration communications, biosensors, 5D (axis) printing, and many other disruptive technologies have raised the stakes for maintaining STIE sovereignty. These technologies go beyond economic competitiveness, and the custodians of these technologies have the potential to fundamentally change the nature of our economic, societal, and environmental systems. It is, therefore, imperative for developing countries, such as Malaysia, to have a strong ecosystem at the forefront of these developments, and they are incorporating these new technologies to enable them to continuously move up the global STIE value chain.
In this context, countries need to invest in the GLRO ecosystem (8i enablers) to build strong dynamic capabilities of the local workforce, industry, and other stakeholders in the economy. The key role of GLROs is to play a bridging role to enable key players in the ecosystem to transcend the “STI Valley of Death”. This includes helping bridge the supply and demand of STIs, as shown in Figure 40.
Figure 40: Transcending the “STI Valley of Death"
GLROs play an important role in the ecosystem to facilitate the development of an “Open Innovation Platform,” where seekers of STIs (industry and the community) are able to work with solvers and generators of new knowledge (academic institutions, government research institutes, and other producers of knowledge). These include creating a vibrant and dynamic platform for undertaking basic research until it reaches commercialisation. It enables a platform that helps co-create, crowdsource, and nurture new STIs that value-adds to key players in the ecosystem. A key player in the ecosystem is the government, which provides long-term core funding to support the development of 8i-enablers of the GLRO ecosystem. The GLRO R&D infrastructure and support systems will enable industries and institutions of learning to develop a viable and sustainable business model. The GLRO Enterprise ROV Model (GERoV), as shown in Figure 41, will require core funding from the government (as seen in many of the international GLROs) to build strong enablers of the GRLO ecosystem. As these enablers are developed, they build strong dynamic capabilities of the workforce and all players in the ecosystem, enabling them to generate Return on Value (ROV) for themselves and the economy.
The ROV components entail the following:
• nurturing the next-generation talent to power the economy;
• create new knowledge (innovation and discoveries) that value-adds to the productivity of local firms and workforce;
• build strong local knowledge networks and supply chains and enable them to move up and sustain their position at a higher level of the global value chains;
• contribute to the wealth of the country by improving the productivity of local industry and workforce; spawn new and high value-added industries and jobs;
• increase the income and quality of life of the B40 community in the country by providing them access to training, employment opportunities, sustainable jobs and income;
• developing local innovation and solutions that address some of the challenges faced by the local communities, such as environmental degradation, flood mitigation, and health monitoring and introducing other innovations that improve the quality of life of the rakyat;
• as new value-added industries are created and workforce competitiveness is enhanced, the ecosystem will be able to brand and position itself as a dynamic value-creating ecosystem – this will increase the investment (domestic and foreign) in these localities, creating more industrial activities and jobs.
Figure 41: The GLRO Enterprise ROV (GERoV) Model Adapted from Nair et al (2022)
The sustainable virtuous cycle of the GERoV (as shown in Figure 42) will require the following nine components of stakeholder-oriented valuecreating initiatives to be in place:
• Customer (Stakeholder) Segments: Clearly identify the customer segments the GLROs will provide service for. Key customer segments include universities and other research institutes that translate fundamental research into applied research and innovation that benefits the industry. Other services include the use of GLROs’ cutting-edge research facilities by industry and institutes of learning for testing and prototyping. GLROs must ensure that they do not crowd out the operations of their customer segments.
• Value Proposition:
Since GLROs are public facilities (a large proportion paid by taxpayers), these facilities should be opened up to universities, research institutes, and industry at affordable rates. The GLROs can also be an important source of providing affordable access to state-of-the-art training in the deep-tech areas for students, researchers, and industry players. These public facilities can be an important source of building strong dynamic capabilities (absorptive, adaptive, and innovative capabilities) among Malaysia's research community and industry players. GLROs are also seen as being at the cutting edge of STIs and envisage understanding global STI trends. They become a source of market intelligence for key players in the local ecosystem, especially the micro, small, and medium enterprises (MSMEs).
• Channels for Translational R&D: GLROs are an important source for nurturing and sustaining translation R&D and innovation for industry players. These include working closely with universities and other research institutes to bring their fundamental R&D to industry players and other stakeholders that see commercial potential from the fundamental R&D. The facilities in the GLRO are also important support services (testing and training facilities) for academic institutions and industry players. GLROs also play a pivotal role in providing capability development in deep-tech and hi-tech areas. They also lead R&D that addresses the grand challenges faced by the country and contribute to nation-building.
• Stakeholder Relationships: GLROs are seen as “trust partners” in forging strong collaboration between academia and industry. They play a key role in understanding the STI landscape in academic institutions and the needs of industries, bridging the expectations of both stakeholders to ensure seamless cooperative endeavours among all parties to close the “STI Valley of Death”.
• Revenue Stream:
GLROs are seen as an important public good and provide services that, otherwise, the industry would not undertake. In this context, GLROs will require core support from the government (as seen in many developed countries). In this
context, based on many international case studies, most of the GLROs operate on a “breakeven” budget, where core funding constitutes 50% to 70% of their budget; and the remaining funding comes from the services they provide. Note that GLROs focus not on pursuing ROI only, but on generating ROV for the entire ecosystem. By generating ROV (as described above), GLROs are able to draw in high quality and quantum of investments. Hence, GRLOs are not seen as “profit-maximisers” but “value-creators” for stakeholders in the ecosystem.
• Key Resources:
GLROs are seen as key national resources and assets to support the country's STIE endeavours and meet national strategic priorities. These include enabling the country to maintain “STIE Sovereignty” and, in the process, ensure that the national government has the levers to maintain national security, economic security, environmental sustainability, and societal development as enshrined in the national constitution.
• Key Activities:
Key activities of the GLRO include being a bridge between academia and industry to transcend the “STIE Valley of Death” to become the “STIE Valley of Value” for all stakeholders in the ecosystem. The “STIE Valley of Value” entails providing access to high-end research infrastructure, testing facilities, expertise, and training for next-generation STIE leaders in the country.
• Key Partners in the Ecosystem: GLROs are seen as the marketplace where all the stakeholders come for their R&D and STIE needs. These include access to research facilities, market intelligence, expertise, and other support services. As such, GLROs engage with a wide range of stakeholders (local, regional, and global) – academic institutions, other research institutions, government agencies, citizen scientists, and community organisations. Engagement with these key stakeholders provides GLROs with good market intelligence on the local STIE landscape and global STIE trends. This will be vital for strategic foresighting and planning for government, industry associations, and community organisations. Future national, state, and industry plans can be informed by the gathered market intelligence.
• Cost Structure
The financial sustainability of the GRLOs is crucial for the sustainable development of the national STIE ecosystem. In this context, a multi-stakeholder partnership is the way forward to ensure the sustainable development of the GLRO in meeting its objective of being the “fulcrum and pivot” for ensuring STIE Sovereignty. The GERoV model must ensure that operations of the GLROs are funded from multiple sources, with the government as the core funder and guarantor for this important entity. This partnership framework includes the Ministry of Higher Education utilising GLROs as part of student training and internships and
Notes:
providing GLROs with the necessary funding to support these endeavours. Other ministries, such as the Ministry of Human Resources, can use some of the facilities in the GLROs to nurture the nextgeneration workforce in deep-tech and other technology-intensive industries. Furthermore, GLROs should also be given priority to undertake commissioned work from government agencies that are of strategic importance to the nation. As GLROs gain confidence in undertaking major national priority projects, these will enhance their credibility and confidence in undertaking major projects for industry and foreign players. A “Whole of Nation” strategy is needed to ensure the financial sustainability of the GLROs.
Implementing the GERoV model will form strong and dynamic multi-stakeholder partnerships that will generate ROVs for all stakeholders in the ecosystem and the Malaysian economy. The GLROs will build strong dynamic capabilities internally and across the STIE value chain. This is done by providing industry and other stakeholders in the ecosystem access to state-of-the-art research facilities, expertise, certified testing, business development, incubation & accelerator facilities, and technopreneur training for players in the ecosystem. GLRO will be an important resource centre for the stakeholders in the ecosystem (GLROs, MSMEs, MNCs, Start-ups, industry associations, government agencies, financiers (venture capitals, angel investors, crowd-sourcing and other private funding for ideas and STIs), institutions of higher learning (IHLs), and the rakyat). This is envisaged to create mutual benefit and value for all of them.
Strong GLROs are also expected to foster strong collaboration with other global centres of excellence, which will lead to significant positive spillovers to local ecosystems in the form of knowledge and technology transfer. When GLROs play a more holistic role and form relationships in the ecosystem, strategic insights and market intelligence can be gathered at every level of the STIE value chain. This would then feed into the nation’s strategic planning, foresight, and policy formulation activities. There are close to 30 potential ROVs generated by the individual interactions between the GLRO and each of the stakeholders in the ecosystem. A summary of the GRLO ecosystem, the knowledge flows, and the source of generating the ROVs for all stakeholders is summarised in Figure 40. The total ROV generated by the GLROs to the economy is envisaged to be higher than the sum of all the 30 ROVs generated by the individual ROVs generated between the GLROs and key stakeholders in the ecosystem. A sound and vibrant GLRO ecosystem is envisaged to nurture the next-generation high-tech and deep-tech talent, industries, and high-quality foreign direct investments into the country.
A vibrant and dynamic GLRO will generate close to 30 ROVs based on the knowledge flows between the GLROs and key stakeholders in the ecosystem. The 30 ROVs are aligned to the broad six-dimensional ROVs given in Figure 25. It is envisaged the total contribution of the GLROs to the economy will exceed the sum of the 30 ROVs.
Figure 42: Role of GLRO in the national STIE Ecosystem -Sustainable Collaborative Network Adapted from Nair et al (2022)
In summary, this study highlights that GLROs are critical for ensuring the “STIE Sovereignty” of the nation and putting Malaysia on the path to becoming a globally competitive economy. This is done by investing in the GLROs to harness the nation’s natural resources and diverse talent pool in sustainable ways that will benefit the current and future needs of the country.
To achieve this, the following seven recommendations are proposed:
1. Develop a GLRO enterprise return on value model (called the GERoV), which closes the “STI Valley of Death” gaps11. These include identifying key stakeholders in the ecosystem and the value proposition (ROVs) GLROs bring to each of the stakeholders; ensuring clear channels of translational R&D and commercialisation activities; managing stakeholder relationships to derive the best value proposition for all players in the ecosystem; ensuring sustainable financial model (mixture of government funding and other external sources of funding); and become key resource centres for other researchers in the ecosystem (access to expertise, advanced research facilities, training services and foresighting of future STI trends for policymakers and industry).
2. Provide continuous government support, policy consistencies and long-term investment to enhance the competitiveness of the GLROs. These include the following: putting in place dedicated operational funding for GLROs; aligning them to address the national priorities and future-proof the national priorities; assisting the development of sectoral-based research areas that contribute to the socioeconomic development of the nation; and expanding the roles of GLROs to undertake foresight and sign-posting activities to future-proof the national development agenda.
3. Enhance the governance structure of the GLROs to include transformative leadership and promote institutional integrity through the diversification of the GLRO board. This is to nurture a more collaborative and dynamic board that will lead the GLRO to make significant contributions to all stakeholders in the RDICE ecosystem.
4. Empower the Research Management Agency (RMA) to appoint and monitor the board members of the GLROs. The board of the GLROs should have the leadership to future-proof the GLROs, reduce duplication of functions, and increase their contribution to national development.
5. Integrate and harmonise the planning and activities of GLROs in the RDICE ecosystem. These include forming a “consortium of GLROs” together with commercial and research leaders to have a stronger voice in the nurturing of a dynamic, vibrant, and value-creating RDICE ecosystem. These include reducing duplication of activities and optimally using resources in the country to create high ROV for all stakeholders.
6. Cultivate a high-performance and knowledge-sharing culture among GLROs. In this context, formulate performance assessment metrics based on an ROV-driven framework for the GLROs and for all levels of staff in the GLROs.
7. Attract, develop, engage, and retain world-class talent to service the current and future needs of GLROs. Put in place holistic talent management plans, which will nurture nextgeneration creative talent, develop a sustainable career development plan, and introduce a talent mobility strategy across the different GLROs, universities and industries. All of which will provide good career opportunities for current and future talent; and retain them in Malaysia.
Way Forward
To ensure the sustainability of GLROs without compromising that both GLROs in Malaysia can play their roles effectively in providing the backward and forward linkages in the RDICE ecosystem, the study outlines five recommendations and the requisite actions needed. The recommendations and actions emphasise strengthening the leadership of GLROs, ensuring continuous support from the government, coordinating all activities between GLROs, shifting the evaluation of these institutions from one based on ROI to ROV and ensuring the best talents are recruited into these institutions. Each recommendation corresponds to the issues faced among GLROs that were extracted in the literature review and inputs from stakeholders through FGDs and interview sessions.
1
Many GLROs focus on deriving return on investment (ROI) and, as such, focus on short-term outcomes of increasing profitability instead of deriving return on value (ROV) for the other players in the RDICE ecosystem.
Develop a GLRO enterprise return on value model (called the GERoV), which closes the “STI Valley of Death gaps”. These include identifying key stakeholders in the ecosystem and the value proposition (ROVs) GLROs bring to each of the stakeholders;
• Ensuring clear channels of translational R&D and commercialisation activities.
• Managing stakeholder relationships to derive the best value proposition for all players in the ecosystem.
• Ensuring a sustainable financial model (mixture of government funding and other external source of funding).
• Become key resource centres for other researchers in the ecosystem (access to expertise, advanced research facilities, training services and foresighting future STI trends for policymakers and industry).
2 Shifting government policies and funding priorities that impact the long-term planning and trajectory of GLROs’ development and the STI contribution to the national development agenda.
Lack of alignment among GLROs to the country’s economic development due to shifting national priorities makes it challenging to build and maintain core R&D capabilities in areas of strategic importance.
3
To provide continuous government support, policy consistencies and long-term investment to drive GLROs to be globally competitive rather than domestically focused.
• Commit dedicated operational funding for GLROs to deliver services aligned with long-term direction.
• Align GLROs to the national priority areas by empowering the Research Management Agency (RMA) to set the direction and future proof.
• Empower GLROs to develop sectoral policies based on their research areas.
• Expand the roles of GLROs to carry out foresight and signposting as well as develop industry technology mappings.
Leadership in GLROs do not have the research and entrepreneurial acumen (hybrid knowledge) due to a lack of diversity of voices leading to these institutions being inward-looking and unable to adapt to a fastchanging STIE environment. The ability to deliver impact is affected by GLROs understanding of “mandate” and the ability of GLROs to “claim the space” by stepping into the policy realm and position the relevant interventions across ministries;
To enhance the governance structure of GLROs to include transformative leadership and promote institutional integrity through diversification of the board to nurture a collaborative, dynamic & competitive RDICE ecosystem.
• Empower the Research Management Agency (RMA) in the appointment and monitoring of the performance of board members of the GLROs:
• The leadership of the GLROs should have a sound scientific background and entrepreneurial acumen with a good understanding of national development with a global outlook.
• To ensure the diversity of the board of GLROs to be capable of handling current & future challenges.
• To prevent duplication and depletion of resources among GLROs.
4
• Lack of a collaborative platform to coordinate GLROs, across various ministries leads to fragmentation and duplication of efforts between GLROs and universities towards translating R&D into Innovation that is impactful to the nation.
• Lack of collaborative platform has led to GLROs crowding out both the universities & the industries. This leads to a lack of trust among and between GLROs, universities and industries.
5 Narrowly defined KPIs create misalignment by emphasising GLROs to be ROI-focused and selfsustaining, which leads to weak internal & external collaboration.
6
To integrate and harmonise the planning and activities of GLROs in the RDICE ecosystem.
• Form a “consortium of GLROs”, which brings together commercial and research leaders to:
• Consolidate the needs of GLROs as a single voice.
• Establish areas of collaboration between GLROs, other complementing institutions and industries toward the national agenda for Malaysia.
• Strategies innovation activities and eliminate duplication of work between GLROs, other complementing institutions and industries.
To enculturate a high-performance and knowledge-sharing culture among GLROs
GLROs face difficulties in nurturing and retaining highperformance talent in driving high-end critical areas.
To attract, develop, engage and retain world-class talent to service the current and future needs of GLROS innovatively.
• Formulate assessment matrix based on ROV-driven KPIs for the GLROs across all levels of staff
• Institute holistic talent management plans which nurture the next generation of creative talent for the GLROs.
• Develop career trajectories for core staff, collaborative and contract staff.
• Attract and retain world-class talent in a broad spectrum of research, professional services and business development by reviewing the remuneration scheme to support a seamless RDICE value chain.
• Introduce a mechanism to facilitate talent mobility across all GLROs and universities to provide good career opportunities for current and future talent at all levels.
Sustainable Leadership for GLRO
To be effective, GLROs must build leadership, management and governance capabilities to fit their functions and purpose in the defined research, development, innovation, commercialisation, and economics (RDICE) ecosystem. This will allow GLROs to be evaluated on their ability to create a sustainable impact as defined through the six dimensions of ROV: talent development, new knowledge, economic development, branding and positioning, social development, and creation of talent stock. In order to enhance the value creation capability and credibility of GLROs, the leadership will have to work along the 8i innovation helix ecosystem. As such, there is a need for members of the Board of a GLRO first to understand the interlinks required for RDICE so that they can align their focus around the defined value impacts while also understanding the ecosystem needed for the impacts. As the component areas of knowledge that make up the ecosystem needed for impact are quite diverse, the GLROs must have the right board composition and structure, where a strategic balance among individuals of relevant backgrounds, expertise, skills and experiences can be obtained. Besides that, the board will also need to ensure the right culture of interaction and communication of ideas and knowledge within healthy team dynamics and relationships, as well as processes and team norms, to ensure they are as effective as possible.
An independent committee within the board should be assigned to continuously monitor and evaluate the set ROV goals, their significance, and the strategies adopted to achieve them within the innovation ecosystem defined. This would not only help the GLROs to act or react appropriately but also articulate strengths and weaknesses or perhaps even define gaps within the organisation that need to be addressed. This exercise will also help identify which actions, reactions or predictions are worth focussing on for success. The exercise should include a short- and long-term evaluation that would allow management to continuously review their strategies based on the changing landscapes of technologies and the economy.
Along with that, the GLRO’s Board and executives must focus on empowering able, qualified, and competent leaders to drive the ROV strategies. They should be empowered to develop, communicate, and execute their defined strategies. They must be responsible for shaping an organisational structure and culture that drives the purpose of delivering the determined ROV. They also need to infuse a culture of commitment towards the organisational purpose among the employees, merely monetary rewards should not energise them. A sense of responsibility and accountability for the public fund must be instilled within the organisation to deliver the impact through value creation. This would allow for cultivating a culture of integrity,
particularly avoiding unnecessary wastage of resources.
GLRO leaders must possess the ability to execute an effective governance and management system that will eventually allow them to carry out the responsibilities of delivering the ROV. A balanced scorecard that defines targets within a timeline along the framework of the determined ROV should be accompanied by the right progress checks, monitoring and reports of accomplishments and milestones. There should be a set of main and prioritised ROV goals that may be reinforced through mechanisms, such as incentives and/or compensations for the executive team and the employees.
The leaders should also possess an entrepreneurial mindset that is trained to look at the opportunities, risks, strengths and weaknesses of the GLROs they are leading. Being able to turn situations into opportunities and avoiding pitfalls through a full understanding of the knowledge chains, business landscape and future economy shall certainly be a great asset in determining success. They should be able to lead across the enterprise and ecosystem, which may call for collaboration and networking skills leading towards creating value chains with other research institutions and agencies like the universities, research centres, industries and government agencies in order to create value for their stakeholders.
As GLROs are generally investment organisations, the leaders must realise that not only are their organisations responsible for innovating and resolving the current issues and challenges for their stakeholders, but they must also have the capability to shape future potential values and economy for the nation. As such, they must be agile in their operating model and organisation structure, particularly one that can promote an ecosystem that generates ideas and creativity in future settings. Thus, leaders need to exert influence on continuous learning, idea nurturing and sharing across the organisations, and for that, it is crucial for the organisation to adopt a flat structure to be more interconnected among them. Researchers, business developers, and management shall need to collaborate and understand each other constantly in order to perceive the big picture of the purpose while outlining the complex synergy needed to move them.
In the meantime, leaders must constantly review their business strategies due to inevitable changing landscapes. This could also inevitably call for a change in the structure and culture of their organisation, which will then impact their employees. Thus, roles, job descriptions, and career paths for each employee must be clear and be allowed to undergo revision as time progresses, as these roles and career paths may also inevitably change.
Leaders will need to be well versed in market intelligence combined with insights, which calls for gathering pertinent information on various data sets, analysing the information, breaking down the information and applying the information to the various departments of the organisation with the goals of staying ahead in the value chain.
In order to stay ahead in research and innovation for economic growth, GLRO’s leadership have no option but to invest in highly competitive and best talents, particularly among the researchers. In other areas of addressing the value creation chain, leaders also need to look for the right people with the right skills who can adopt and adapt to potential new ways of working, easily adjust to new roles and even develop new skills when there’s a call for a new business focus, required for the future business landscape. In certain critical areas, GLROs have to invest in the engagement and recruitment of the world's best talents in order to increase the probability of success of the projects undertaken.
Continuous engagement with employees will allow the leaders and management team to evaluate the capabilities at hand and identify the gaps in talents and new skill sets needed to address the change. In the meantime, opportunities for upskilling and reskilling, including exposure to other established world research centres either through project collaboration or attachment, must be made available for employees. Within that, GLRO’s leadership must adopt the mode of building an inclusive organisation that provides clear career opportunities and pathways through providing opportunities for continuous learning and the right work experience pertaining to delivering the ROV by the organisation. They must cultivate and create an organisational environment that can stimulate continuous learning and improvement on a broad front. In short, a comprehensive talent management programme must be implemented in each GLRO.
GLRO leaders must concentrate on building and sustaining a culture of innovation within the organisation. A commitment toward innovation must exist among all the members of the organisation’s community. The level of contribution from each member towards innovation will largely depend on their awareness, acquaintance and belief in the mission and purpose of their organisation. As such, continuous communication and influence on the organisation's mission and goals to every employee will help them build a culture of prioritising the need to commit towards the stakeholder's interest, which the organisation should offer. To establish this, leaders have to look closely at its environmental, social and governance impacts on the commitments of employees.
To enhance the innovation ability further, leaders must take up an engagement strategy that promotes and nurtures a relationship of collaboration towards co-creation within the
community of their organisation. A proper incentive and reward system could also be put in place for those who commit to this agenda. Nevertheless, for this agenda to be effective, the leadership and management must also implement a governance system that can undertake a collective tolerance for innovation risk while empowering everyone to participate in value-adding. A system must be in place to boost participation, and tolerance towards diversifying approaches as well as focus areas can be key to sustaining employees' interest in leading innovations.
Leaders may want to avoid evaluating creative ideas through a single framework of evaluation and execution. Instead, they should allow a diversified evaluation framework and execution, which can also address the diverse forms of value creation. This diversified approach to evaluation should encourage disruptive innovations and prevent good potential projects from being prematurely killed. While financial risks towards these kinds of initiatives may hinder leaders from taking the chance, a co-investment approach with potential business stakeholders is possible if they are communicated the value proposition at the very early stage. The goal as far as dealing with the co-investors is to get buy-in by sharing a betterrounded perspective of the project and a clear process to scale up and commercialise the new innovations.
Within this context, leaders may want to evaluate embarking on innovation projects based on the potential for stakeholders’ support. Therefore, GLRO leaders need the right business lenses for the outcomes they plan to drive. Identifying strategic co-investors by designing the innovations to meet their goals faster, cheaper and with fewer risks may trigger successful collaborative strategies. The co-investors can support the efforts in finding the right emerging technology to meet their goals. This approach can help to speed up proofs of concepts and deliver value to the business.
Finally, it is suggested that combining all the leadership and governance approaches and strategies outlined should help to create and sustain a culture of innovation and value creation within the GLROs in the RDICE ecosystem.
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