Synchronising research with economic planning

THE global economy’s growing dependence on China has become obvious as Covid-19 continues its ravaging path around the world. At first it was the tourism sector which bore the brunt of the decline in business, as many tourism products around the world have suffered because of the reduced number of tourists from China.

It has been reported that every year, the world tourism industry enjoys revenue from the spending spree of more than 120 million tourists from China. When the arrivals suddenly stopped because of lockdowns and other travel prohibitions, tourism business around the world fell into disarray. For Malaysia, this is happening during Visit Malaysia 2020, which is a pity.

Now the world is being shaken by news that the global supply chain of many consumer products is also facing problems because over the years China has become the world’s factory for many of these products. Wuhan, the centre of the Covid-19 outbreak, is also a key area for the manufacture of parts for the global car industry.

Even surgical or face masks, key instruments in slowing down the spread of Covid-19, come mainly from factories in China, as do

the disinfectants used in hand cleansing to ward off the virus. It has also been revealed that in the manufacture of medicine, the active pharmaceutical ingredients (API) come mainly from China.

Add to that the fact that China is also the biggest buyer of world commodities including metals, oil and even palm oil, the negative impact on global growth is unavoidable.

Economic experts are now saying that Malaysia’s growth for 2020 will be in the region of 3.7% instead of between 4% and 4.5%. The recent tumble in the price of oil to about US$36 per barrel is even more disconcerting since oil and gas are major revenue earners for our country.

Responding to such anaemic growth potential, the government has announced a RM20bil stimulus package, which is considered okay for a start. But stimulus injections of funds are at best only a short-term measure. What we need are more long-term and sustainable measures to drive the economy.

For far too long, we have been relying on low value commodities to keep the economy moving. If this goes on for much longer, we will continue to be trapped in the middle-income category. We have been talking for years about getting into the high value economy, but nothing much has happened on the ground.

It is time to change. We need drastic transformation in our economic planning. Our research and development (R&D) investment should be linked to the desire to develop new economic sectors.

There is no doubt that in the coming years, the digital economy and Industry 4.0 will dominate future business. We therefore need to establish clear directions on the sector we would like to excel in.

At the moment, the linkage between R&D and the economy is unclear. Most of the present R&D are driven by the motivation to publish in journals. This explains why much of our R&D do not translate into businesses that will benefit the economy.

It is time for a reorientation of the R&D funding. There must be a balance between basic and applied research. Funding for basic research should be channelled through the Higher Education Ministry and those meant for applied research should be directed through Mosti (Science, Technology and Innovation Ministry).

Universities should focus on basic research while industry-driven research institutes should make applied research their focus.

A few years ago, a paper was prepared on the establishment of a Research Management Agency (RMA), which was supposed to administer the applied research programme in the country. The paper, which was eventually approved by the Economic Planning Unit, was somehow overlooked and the proposal was never implemented.

Mosti should revive the RMA idea and bring it to life if we are to ever have a chance of aligning our R&D with the country’s economic planning.



Academy of Sciences Malaysia

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