SEMENYIH: Malaysia must increase its investment in research and development (R&D) or risk falling further behind in global technological advancement, says Science, Technology and Innovation Minister Datuk Chang Lih Kang.
He said that one of the key challenges is that R&D funding is often deprioritised during budget cuts because its benefits are not immediately visible.
“But five or 10 years later, the country will realise it has fallen behind,” he said during a panel talk session held at the University of Nottingham Malaysia on Tuesday (April 14).
He also said Malaysia’s government expenditure on R&D has remained “stagnant” at a relatively low level of around 1% of gross domestic product (GDP), far below leading countries such as Korea, China and Japan.
“Countries which consistently invest more in R&D tend to progress faster in technology development,” he said.
He also said that Malaysia cannot rely solely on government funding, as private sector investment in R&D remains limited.
“This is because of the structure of Malaysia’s economy, where around 90% of businesses are small and medium enterprises (SMEs), whose focus is on staying afloat rather than investing in future technologies,” he said.
To address this gap, he said the government is promoting a “matching grant” approach, where both government and industry share the cost of R&D projects.
“Under this mechanism, the government may fund between 50% to 70% of R&D costs, while companies are required to match the remaining portion depending on their size,” he said.
He added that the initiative aims to encourage even smaller companies to begin engaging in research activities, even at a modest scale, with the hope that it will grow over time.
As part of this effort, he said the government is also working on a new funding initiative known as the Malaysia Science and Innovation Fund (MSE), which aims to mobilise RM1bil from the government and RM1bil from industry partners, creating a total of RM2bil in R&D funding.
