Positioning Biotechnology in the New Economic Model

1. Positioning Biotechnology in the New Economic Model Zakri Abdul Hamid Science Advisor to the Government PUTRAJAYA WORLD TRADE CENTRE, Kuala Lumpur 24 MAY 2010

2. Malaysia at a Crossroads 2

4. THRUST ONE: MOVE THE ECONOMY UP THE VALUE CHAIN Increase productivity and competitiveness in agriculture, manufacturing and services sectors through Intensive Research &Development & Commercialisation (RDC) Generate new sources of wealth in technology and knowledge-intensive sectors 4

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6. 6 There is a new global marketplace out there � what it means to be a competitive, strong nation is changing. All countries are competing for the same resources to fuel growth � best human capital, investments. Makes it more important for us to be able to leverage on all the resources we have � Urban as well as rural. Providing technology access to enable everyone to acquire knowledge and participate in the k-economy rapidly is key. Need to quickly move up the value chain. There is a new global marketplace out there � what it means to be a competitive, strong nation is changing. All countries are competing for the same resources to fuel growth � best human capital, investments. Makes it more important for us to be able to leverage on all the resources we have � Urban as well as rural. Providing technology access to enable everyone to acquire knowledge and participate in the k-economy rapidly is key. Need to quickly move up the value chain.

7. 7 Insufficient access and quality of education : although there�s room to improve, we are not too bad at a macro level. Our challenge is to address the imbalance between the developed and rural areas. Lack of capacity for innovation & development : somewhat relevant. Fortunately we have the fundamental in place (i.e. education). Will need to adjust this to promote interest to address opportunities up the value chain (i.e. innovation, knowledge worker space). Obstacle to employment and entrepreneurship : acknowledge Malaysia�s realization and efforts already in place to address this. We have more to do speedily to be able to compete globally. Insufficient access and quality of education : although there�s room to improve, we are not too bad at a macro level. Our challenge is to address the imbalance between the developed and rural areas. Lack of capacity for innovation & development : somewhat relevant. Fortunately we have the fundamental in place (i.e. education). Will need to adjust this to promote interest to address opportunities up the value chain (i.e. innovation, knowledge worker space). Obstacle to employment and entrepreneurship : acknowledge Malaysia�s realization and efforts already in place to address this. We have more to do speedily to be able to compete globally.

8. Innovation is the intersection of invention and insight, leading to the creation of social and economic value. 8

9. If Malaysia wants to become a High-Income Country, we must increase % of Innovative SMEs (average 10% in OECD countries) and Firms collaborating in Innovative Activities (OECD Report, 12 Jan 2009) 9 Source: Mittelst�dt, A. and F. Cerri (2008), "Fostering Entrepreneurship for Innovation", OECD Science, Technology and Industry Working Papers, 2008/5, OECD publishing, � OECD. doi:10.1787/227624785873 Why is Innovative SMEs important to transform the economy? See next slide which shows the composition of SMEs in high-income countries. 99.2% of registered companies in Malaysia are SMEs, 78.4% are Micro.Source: Mittelst�dt, A. and F. Cerri (2008), "Fostering Entrepreneurship for Innovation", OECD Science, Technology and Industry Working Papers, 2008/5, OECD publishing, � OECD. doi:10.1787/227624785873 Why is Innovative SMEs important to transform the economy? See next slide which shows the composition of SMEs in high-income countries. 99.2% of registered companies in Malaysia are SMEs, 78.4% are Micro.

10. Strategic Plan to Develop Innovative Local Companiesthat would Expand and Lead in the Global Market 10 In order to become an innovation-led economy and a high-income economy, we need to identify and certify our innovative SMEs and companies so that we can foster and support genuine innovative SMEs because new innovative products and services are high-risk, long returns and SMEs and start-ups usually have little market access, and difficult to get no collateral financing. Once they are certified, innovative SMEs are given access to financing (soft loans � in OECD and Korea, innovative SMEs pay 2% deduction in interest rates), priority for government grants (in Korea, innovative companies can claim back 75% of R&D expenditure funded by the companies� own funds), priority for government procurement of goods (in Korea, 7% of government goods are purchased from Innovative SMEs), Technology Assurance Purchasing program that guarantees purchase for the initial 3 years of new technologies developed by Innovative SMEs for large national top-down projects (e.g. High Speed Broadband HSBB). The procurement support programs provide market track-record for innovative SMEs to market to the global market. This is NOT an import substitution approach because the goal is to provide track-record to export/market to global customers. In order to become an innovation-led economy and a high-income economy, we need to identify and certify our innovative SMEs and companies so that we can foster and support genuine innovative SMEs because new innovative products and services are high-risk, long returns and SMEs and start-ups usually have little market access, and difficult to get no collateral financing. Once they are certified, innovative SMEs are given access to financing (soft loans � in OECD and Korea, innovative SMEs pay 2% deduction in interest rates), priority for government grants (in Korea, innovative companies can claim back 75% of R&D expenditure funded by the companies� own funds), priority for government procurement of goods (in Korea, 7% of government goods are purchased from Innovative SMEs), Technology Assurance Purchasing program that guarantees purchase for the initial 3 years of new technologies developed by Innovative SMEs for large national top-down projects (e.g. High Speed Broadband HSBB). The procurement support programs provide market track-record for innovative SMEs to market to the global market. This is NOT an import substitution approach because the goal is to provide track-record to export/market to global customers.

11. Source: MIGHT Innovation Audit (Semiconductor & Electronics, Oct 2008) (Two Optional slides � slides 17 and 18) - can hide.(Two Optional slides � slides 17 and 18) - can hide.

12. Enhance the current broadbased programmes, while focusing supports to meet the specific needs of selected industrial sectors 12

13. 13 Innovation has been the key growth driver in industry; the next growth driver is anytime, anywhere, any deviceInnovation has been the key growth driver in industry; the next growth driver is anytime, anywhere, any device

14. Essence of Moore�s law: �Innovate & Integrate� Driving to nanoscale Innovations to overcome scaling limits Innovation and integration of materials and processes to assure functions Example: Introduction of low stress packaging materials to support strained silicon and low-K ILD 14

15. 15 While at the same time driving substantial infrastructure upgrades We envision growth in servers and storage technology to acquire and store the masses of content that users will demand Internet growth continues to grow unabated This growth is truly connecting the world as more users and more applications ride the Internet backbone spanning the globe Internet backbone traffic growth in petabytes or 1 billion megabytes per month Great progress on WiFi public hot spots Gartner forecasts over 200,000 hotspots by 2008 � from less than 2000 hotspots in 2001 Asia Pacific was the early leader in Hot Spot deployments�now getting passed up by North America and Europe Increasing connectivity and new services and exciting content continue to fuel the worldwide demand for personal computers A recent Gartner survey in the United States revealed that 25 percent of the professionals that take business flights see value in using "hot spots" at hotels or airports. The number of hot spots worldwide is likely to see double-digit growth through 2007. While at the same time driving substantial infrastructure upgrades We envision growth in servers and storage technology to acquire and store the masses of content that users will demand Internet growth continues to grow unabated This growth is truly connecting the world as more users and more applications ride the Internet backbone spanning the globe Internet backbone traffic growth in petabytes or 1 billion megabytes per month Great progress on WiFi public hot spots Gartner forecasts over 200,000 hotspots by 2008 � from less than 2000 hotspots in 2001 Asia Pacific was the early leader in Hot Spot deployments�now getting passed up by North America and Europe Increasing connectivity and new services and exciting content continue to fuel the worldwide demand for personal computers A recent Gartner survey in the United States revealed that 25 percent of the professionals that take business flights see value in using "hot spots" at hotels or airports. The number of hot spots worldwide is likely to see double-digit growth through 2007.

16. 16 Innovation creates new value Partnerships among government, industry, academia and labor are essential Take ownership of change

18. CSR Paradigm

19. Are current patterns of resource use sustainable? Implications of climate change Energy utilization Water resources Food production Ocean health

20. 20 GRI �Government Research Institute and government Centres of Excellence The business ecosystem must be created via government policies GRI �Government Research Institute and government Centres of Excellence The business ecosystem must be created via government policies

22. Source: NEM

25. Aspirations of a united and advanced nation in line with the 1Malaysia concept Source NEM

26. Source: NEM

34. Thank You Zakri Abdul Hamid Science Advisor to the Government PUTRAJAYA WORLD TRADE CENTRE, Kuala Lumpur 24 May 2010