Several IAP members highlighted increasing investments in research and development and more instances of innovation coming out of the MSC.
"The pace of innovation is increasing right here in the MSC," Stanford University Professor of public and private management William Miller told reporters at the traditional press conference held to mark the conclusion of the IAP meeting.
Miller cited recent statistics in a survey conducted in May by Multimedia Development Corporation (MDC) that showed the rising number of patents being filed by MSC-status companies.
The survey found that MSC-status companies were pouring millions of ringgit and thousands of personnel into R&D.
According to the survey, they have invested nearly RM500 million (US$131,56 million) in R&D up to May, up from the RM300 million (US$79 million) that had been invested by the end of last year, with about 3,350 in-house workers employed full-time in R&D.
The extensive investments in R&D has resulted in 330 patent filings up to May this year, a hundred more than last year.
Oracle executive vice-president Derek Williams said the MSC was well positioned to produce even more technology innovations, as it now had a strong foundation built up from its earlier years.
“The first three years were focussed on laying the foundation, and we have now got to the point where it’s ready to deliver,” he said.
Local MSC-status companies, which make up 66 percent of the 650 active MSC-status companies, are set to lead the way in that direction, as the bulk of the patents filings last year--about 83 percent--were made by Malaysian majority-owned companies.
Ongoing R&D activities in the MSC were expected to result in more locally developed technology, with the survey projecting 148 new patent filings for next year.
“This is evidence of great success,” said Fujitsu corporate executive vice-president Kazuto Kojima.
Better business
The increased focus on R&D has largely gone hand-in-hand with rising profitability among MSC-status companies.
The survey estimates that at least half of companies operating in the MSC would be profitable this year, up from about a third recorded last year.
The survey projects that this figure would increase to 65 percent next year, out of which 159 companies are Malaysian-owned.
The increase in profits have been on the back of an increase in sales, with MSC-status companies reporting total sales of about RM5.65 billion (US$1.48 billion) up to May this year, compared to RM3.41 billion (US$897 million) recorded last year.
This was expected to increase to RM7.87billion (US$2.07 billion) next year.
The rapid rise in sales and profits has allowed the companies to plough back a significant amount of cash into development.
R&D spending as a percentage of sales among MSC-status companies stood at 9.3 percent, which the study said was slightly lower than the 9.9 percent average spent by companies like Intel, Microsoft and IBM.
Many of the homegrown innovations coming out of the MSC have been in the software development field, which some IAP members saw as providing the best opportunities for the MSC to forge ahead.
Silicon Graphics Inc chairman and CEO Bob Bishop said the development of security applications was a rapidly emerging field that companies in the MSC could get in to, largely due to concerns that have emerged out of the Sept 11 incident.
“There is a new wave of opportunities here for the MSC, in technologies such as biometrics, firewalls and encryption,” he said.
He added that all of these technologies have a bright future that companies in the MSC could take advantage of.
People power
Even as MSC-status companies’ appetite for R&D continues to rise, other members said that the human side of technology should continue to be given due attention.
NEC chairman emeritus Tadahiro Sekimoto emphasised human resources as a key requirement for the MSC’s continued success.
“You must continue to increase capabilities of Malaysians in the technology field, besides trying to attract and develop the most advanced technologies here,” he said.
The rise in R&D activities has created a large demand for knowledge workers in the MSC, with software developers, programmers and analysts making up the bulk of the 18,000 people currently working in MSC-status companies.
The MDC survey found that 61 percent of the knowledge workers employed had degrees, with companies showing a higher preference for degree-holders with experience.
Sienna Ventures senior partner and former Apple CEO Gilbert Amelio said that with the emergence of lower-cost manufacturing centres like China, efforts to increase the number of knowledge workers was “absolutely critical.”
“The degree to which you can tap the multicultural advantage in this country will be crucial to future success,” said Cyber Century Forum senior advisor Diana Lady Dougan.
The country’s latest moves into Open Source systems also generated “interesting” comments from several IAP members at the press conference.
Sun Microsystems chief researcher was a particularly strident proponent of Open Source use in Malaysia, arguing that “innovations are driven by the open source model.”
However, Dougan nudged him into acknowledging “those who are of the view that a proprietary business model, where people are paid to innovate, is a valid approach.”
Microsoft Corp chief technology officer Craig Mundie said that his company was not against the Open Source movement, but rather attempts to “do away with the concept of intellectual property and its commercialisation possibilities.”
He said that this would be a major concern for Malaysia if the goal were to have “intellectual property driven development in the MSC.”
Kudos all around
The tangible results on the ground helped provide more meat in the IAP members’ comments on the progress of the MSC this year, and many were justifiably in a congratulatory mood.
Besides praising Prime Minister Mahathir Mohamad for driving the MSC forward, some also took the opportunity to commend MDC chairman Othman Yeop Abdullah for his efforts in steering its development.
Dougan said that his strength and perseverance in both his work at MDC and his fight against a life-threatening illness was “exemplary.”
She led the other IAP members in applauding him for his contributions.
Play video
There are currently no comments for this post.