Sharing Knowledge, Innovative Solutions 1 For Malaysia, By Malaysian, In Malaysia Sharing Knowledge, Innovative Solutions 1 For Malaysia, By Malaysian, In Malaysia

CHALLENGES OF MALAYSIAN ECONOMY (Comin, 2013) Investment & Productivity -50% Compared to 1990s GDP Manufacturing Sector 31% - 25% (2000) (2012) Main impediment? industry has technological knowledge gap Malaysia has the potential for SMEs to increase their productivity and move companies up the value chain Impact to industry Unable to adopt state of the art production methods No market for technological knowledge This makes it hard to –adopt and develop frontier technologies –offer new products and services –enter in new geographic markets –increase efficiency of production methods Sharing Knowledge, Innovative Solutions For Malaysia, By Malaysian, In Malaysia

How to Overcome the Knowledge Scarcity Create a knowledge-friendly ecosystem An environment where knowledge is produced and diffused from those that have it to those that need it Universities & higher education institutions Who has it Companies/Industries Who needs it Sharing Knowledge, Innovative Solutions For Malaysia, By Malaysian, In Malaysia

SELECTED INITIATIVE Focus on demand driven research, via PPRN to provide solutions to SMEs This is done to facilitate meeting with industries by design and no longer by chance. It is hoped that the collaboration will move the companies up the value chain and enhance the bringing of solution to the market place. Sharing Knowledge, Innovative Solutions For Malaysia, By Malaysian, In Malaysia 4

An initiative by Ministry of Education (MOE) as one of the strategies to increase productivity and strengthen Malaysian economic development through innovation and commercialization programs. 71,000 lecturers IHL resources 24,000 PhD PPRN will optimize & leverage resources and expertise available at IHLs and RIs Sharing Knowledge, Innovative Solutions For Malaysia, By Malaysian, In Malaysia

Scope of Projects How does it work? Product development & innovation Develop new products, services or software or parts of them for a company Innovate existing products of the company to the market need Company describes technological problems or areas where there is potential for productivity gains. Process development & innovation Implementation of a new or significantly improved production processes, delivery method or services Streamline production to make it more efficient and to make better use of state-of- art technology Develop processes to scale up production PPRN will find a team of experts/scientists that will provide/develop state of the art technology to solve problem. Value enhancement in supply chain Sourcing components Warehouse & logistic Help develop Information Systems solutions Company and PPRN will co-finance development cost. Sharing Knowledge, Innovative Solutions For Malaysia, By Malaysian, In Malaysia

Selection criteria and requirements for Industrial Technology Problems Projects need to be technological in nature. Projects that essentially involve management or marketing solutions will not be considered. Projects that involves product that need and require the development of innovative technological solutions must be at commercial stage i.e ready in market but may need improvement in term of process or product itself. Projects that essentially require the purchase of off-the-shelve solutions such as products, software or services will not be considered. There is no field restriction. Projects may involve any area of applied science or engineering. Priority will be given to projects that can be completed within six months, but the secretariat may accept project duration up to a year if they have significant social and business value. Ministry of Education Malaysia (MOE)/PPRN will finance a portion of the total project cost and companies should be ready to co-finance their project. Sharing Knowledge, Innovative Solutions For Malaysia, By Malaysian, In Malaysia

Funding mechanism 70% 25% 5% Commitment PPRN:company* Component for PPRN funding Matching grant 90:10 – micro enterprise Research materials /prototyping/testing 70% Up to RM50k / project PPRN 70:30 – small Research materials/tools Facilities Infrastructure In-kind 25% Researchers compan y 50:50 – medium 5% Institutions * Size of company is based on new definition of SME by SME Corp Malaysia which in effect from 1 January 2014 Sharing Knowledge, Innovative Solutions For Malaysia, By Malaysian, In Malaysia

Guideline for new SME definition (in effect from 1 January 2014) SECTOR SME MICRO SMALL MEDIUM Manufacturing <RM50 million <200 employees <RM300,000 <5 employees RM300,000-<RM15 million 5-75 employees RM15 million- <RM50 million 75-200 employees Services <RM20 million <75 employees RM300,000-<RM3 million 5-30 employees RM3 million - <RM20 million 30-75 employees Primary Agriculture Construction Mining & quarrying NOTE: A business will be deemed as an SME if it meets either one of the two specified qualifying criteria, namely sales turnover or full-time employees, whichever is lower. SOURCE : SME Corp. Malaysia, October 2013 Sharing Knowledge, Innovative Solutions For Malaysia, By Malaysian, In Malaysia

Incentive for Researchers Working experience with industry - Criteria for promotion 25% professional fee - Of total PPRN funding Management of fund Project monitoring Researcher – Interim & Final project report Company – Productivity achievement Will be paid through research Institution Sharing Knowledge, Innovative Solutions For Malaysia, By Malaysian, In Malaysia 10

PILOT STUDIES 2 pilot projects Conducted in 2 pilot projects: Take-off Innovation Project • 16 - 18 Jun 2014 KPM-MTDC 2 pilot projects Demand-Driven Innovation Project (DDIP) by PPRN • 17 - 20 November 2014 KPM-MTDC- SME Corp-PUNB Conducted in 2 pilot projects: Findings: Malaysian companies try hard to improve their technology Can benefit from external help Much research/knowledge is sitting in universities and research institutes Can be used to provide solutions to companies technological problems This is cheap and efficient Sharing Knowledge, Innovative Solutions For Malaysia, By Malaysian, In Malaysia

Differences between Fraunhofer and Steinbeis Models PPRN taps on a great pool of local knowledge PPRN relies mainly on technology diffusion but can lead to innovations Fraunhofer almost exclusively innovates Steinbeis acts more like management consultant PPRN covers all economic sectors/areas not just a few PPRN focusing on short and medium term project PPRN is designed thinking about Malaysia’s needs and works following Malaysian rules PPRN provides platform of bidding Sharing Knowledge, Innovative Solutions For Malaysia, By Malaysian, In Malaysia

CONCLUSION PPRN can solve technological problems of many Malaysian companies Facilitate their move up the value chain This is a more efficient way to bring knowledge to society DISTINCT from product development Tap on large existing pockets of knowledge Align incentives of researchers to conduct more applied research in the fields that are more helpful to companies; to focus on market demand Increase demand for skilled and semi-skilled workers Make growth more inclusive Sharing Knowledge, Innovative Solutions For Malaysia, By Malaysian, In Malaysia