Pemandu CEO: Innovation is not dead in Malaysia; Lim Kon Liang makes better hospital beds much more cheaply than the established manufacturers and they are sold to more than 40 countries world wide

Updated: Monday August 19, 2013 MYT 9:05:12 AM

Innovation is not dead in Malaysia

TRANSFORMATION UNPLUGGED BY IDRIS JALA

While innovation happens, we need it to happen much more often

WE can all certainly appreciate that one of the most difficult of things to teach – and to learn – is without doubt innovation, the ability to do things differently from how it was done before to bring about beneficial change for a person, organisation or country.

It’s almost a state of mind, an attitude which encourages the creative process in solving problems by looking at things from different angles and taking unconventional but effective measures in a holistic manner to bring about desired change.Our Prime Minister Datuk Seri Najib Tun Razak had decided that as part of our transformation journey, we needed to boost innovation in Malaysia. Despite some initial resistance, he directed the setting up of a unit under the Prime Minister’s Department to spearhead this work, Agensi Inovasi Malaysia (AIM).

As I have explained before in these columns, the transformation programmes can only be catalysts for change towards our ultimate true north – achieving developed status by 2020, measured by attaining a per capita income of US$15,000 by that year while maintaining the principles of sustainability and inclusiveness.

Our many entry point projects in the 12 main key results areas that we have identified will catalyse and accelerate income growth in these areas. But they have a finite lifetime of a few years and after that the reaction must continue on its own steam.

That’s the point at which greater and more prevalent innovation takes over. The companies and the projects must find a way to sustain themselves, and adapt and customise their operations, products and services to an ever changing and widening market to be successful.

We can’t teach them how to do it, all we can do is facilitate the process. Towards this end, the Performance Management and Delivery Unit (Pemandu) will continue to work closely with AIM to promote innovation in Malaysia.

AIM, set up in 2010 under an Act of Parliament is led by CEO Mark Rozario to help drive the push towards the establishment of an innovative economy and realise the country’s aspirations of achieving a high-income nation. Four parties – the Government, Rakyat, Academia and Industry will work in synergy to encourage the culture of innovation among the population, and to ensure ideas are taken through from creation to commercialisation.

AIM reports to a governing council of 16 which includes seven ministers, including me, and is headed by the Prime Minister, in accordance with the importance that is placed on innovation on the overall development of the economy. While it is not immediately obvious to the man on the street, AIM and Pemandu work together quite seamlessly.

The Economic Transformation Program (ETP) primarily focuses on facilitating the implementation of the private sector’s mature or “cangkul-ready” projects, as former EPU Minister Tan Sri Nor Mohd Yackop calls them. AIM, on the other hand, takes emerging business ideas to maturity with its focus on late stage commercialisation. Together our two programmes provide a steady pipeline of opportunities for the business community to invest in all the way to our 2020 target.

AIM’s Innovation Business Opportunities (IBO) programme are already attracting “bids” from interested companies to take new products and services to market in fields like agriculture and education to the electronics and electrical sector and financial services.

As of May 2013, the 92 IBO projects were already projected to contribute RM2billion of gross national income. The 1Malaysia Biomass Strategy (1MBAS) by itself, which galvanises the palm oil plantation industry to monetize their by-products was already announced to contribute up to RM30 billion of our 2020 target by converting waste to wealth.

Other measures being taken under AIM’s Equity Investment programme, like investing in worldwide human trials of the KL Sports Medicine Centre’s innovation in stem cell therapy for articular cartilege repair are also putting Malaysia on the world stage. Orthopaedic surgeons from all over the world are already coming to KL to be taught these new techniques.

With AIM’s help, another Malaysian company called I-Gene, whose digital autopsy innovation, initially incubated under Multimedia Development Corp or MDeC’s MSC programme, has also now become a recognised brand in Europe – having been announced by David Cameron, as the supplier to the National Health Service.

Malaysians are becoming global suppliers of innovations instead of consumers of other nations’ products which is totally in line with the ETP’s Healthcare national key results area goals.

But like other “interventionist” measures the PM has taken to enable 1Malaysia/Vision2020, like the government and economic transformation programmes, for example, AIM has a finite lifespan and will disband itself in the future at which time hopefully all mechanisms to facilitate innovation from the point of conceptualisation to commercialisation will have been “mainstreamed” into the government delivery machinery to ensure sustainability.

AIM will also have the responsibility for looking into all areas involving innovation including injecting aspects of creativity into the school curriculum, venture capital and other forms of financing, intellectual rights and inventions, conceptualisation of ventures and their eventual commercialisation.

Perhaps one of the most difficult tasks facing AIM and the country at large is to evolve a culture of innovation into the national psyche which must necessarily start from schools and extend into our colleges and our universities. That’s not easy to do for it not only involves changes to curricula but a new breed of teachers who encourage curiosity, inquiry and questioning by students.

That’s a long and difficult process already being undertaken by the Education Blueprint which will be implemented over many years.

Meantime, all is not lost. Innovation is not dead in Malaysia – it just does not occur often enough. There are less heralded innovators who are making their mark in international markets with little fanfare.

In the past, the treatment of cartilage injuries has had its limitations but today, orthopaedic surgeons from all over the world are coming to KL to be taught groundbreaking techniques in cartilege regeneration using stem cells, a homegrown innovation by Malaysian orthopaedic surgeon Dr Saw Khay Yong. Dr Saw is the founder of the earlier mentioned KL Sports Medicine Centre that receives government support through AIM.

I also know of a Malaysian manufacturer of guitar tube or valve amplifiers, a gentlemen called Nik of Ceriatone. As a sound aficionado, I can personally attest to the quality of his products – tube amplifiers are known for their warm and rich tone compared to the more common transistor ones. And his prices start from RM2,000, a great price for a tube.

While his operation is small – some 14 employees – his amps have been sold to more than 70 countries which is a coup for this niche market. This is a good example of an innovative small enterprise.

And then there is a Malaysian manufacturer of hospital beds, Lim Kon Liang of LKL Advanced Metaltech Sdn Bhd, who makes better beds much more cheaply than the established manufacturers. LKL’s hospital beds are sold to more than 40 countries world wide. This is an example of an innovative medium size enterprise.

I believe some of the above success stories are telling of the fact that the Government can only help foster and facilitate innovation to some degree and often at the beginning, and that some entrepreneurs are even able to do it on their own, despite the odds.

In the interest of creating an environment for innovation to thrive, there is need for a strong ecosystem involving all parties – the government which gives the early push, the private sector which offers commercial impetus through funding mechanisms and entrepreneurial innovators. This ecosystem is what AIM will set up and this is also the right time for Malaysians who are well-positioned to support the innovation agenda so we get on that path towards becoming a truly innovative society.

Datuk Seri Idris Jala is CEO of Pemandu, the Performance Management and Delivery Unit, and Minister in the Prime Minister’s Department. Fair and reasonable comments are most welcome at idrisjala@pemandu.gov.my

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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