Building a Culture of Innovation in Malaysia: Successes, Strategies and Challenges

Keynote Speaker
Tan Sri Emeritus Prof. Datuk Dr Augustine SH Ong


  1. Datuk Badlisham Ghazali
  2. Mr. Prakash Chandran
  3. Mr. Johan Mhmood Merican
  4. Pn. Zuraidah Musib (Moderator)

PDS 13: Building a Culture of Innovation in Malaysia – Successes, Strategies and Challenges


Innovation generally refers to the creation of better products, processes, practices or technologies that benefit society as a whole.  A culture of innovation is an essential component of a knowledge society and is strongly linked to productivity and prosperity. A society that is well-governed, that prepares its young people through education for both citizenship and work; is strong in science and technology, and has established solid links between education, research and industry, is in the right direction to become an innovative and prosperous society.  

A knowledge society is one that not only creates, but shares and uses knowledge for the prosperity and well-being of its people. The Prime Minister of Malaysia has been quoted thus: “Making innovation acceptable to society first is important before each member can make it a part of his or her daily life. Making innovation our culture can help bring Malaysia to a high level of transformation and development for greater success in the future.”  Innovation, in other words, must be coupled with social purpose to generate benefits to the community and country.

Based on the INSEAD Global Innovation Index, Malaysia was ranked number 28 in the 2009-2010 ranking.  With the efforts currently being undertaken by both the public and private sectors, Malaysia is anticipated to rise higher in the global innovation rankings, in line with the Prime Minister’s vision of a high-income, knowledge-based nation by the year 2020.

Success Story: Innovation in Government

Malaysia is among the leading countries in the developing world in the implementation of huge e-government programmes. This is made possible due to the vision and support from the leadership of the country and generous allocations for the development of the ICT sector in general and e-government in particular. As early as the 1990s, Malaysia had embarked on several initiatives to improve the state of governance and service delivery systems through the application of ICT technologies. One of them was the introduction of a public service network (PSN) that enabled post offices throughout the country to act as one-stop bill payment centers for the renewal of various licenses, stamping, and payment of road tax for motor vehicles, and bills payments to private service providers such as Telekom Malaysia and Tenaga Nasional Bhd.  

The establishment of the Multimedia Super Corridor (MSC) in 1996 was a major landmark in Malaysia’s drive for e-government and improved service delivery.  The provision for online services has made a fundamental difference in public access to government information and facilities. The old systems characterized by rigidity, long delays, unnecessary complexity, and inconvenience is being replaced by a better system in terms of faster access, reduced cost, and public ease and convenience.  In addition, the Web sites maintained by most public agencies not only provide information about their functions, services, activities and programmes, many of them also offer feedback options, thereby allowing the public to express their views, needs and problems.


The Malaysian government has made innovation and creativity central to the nation’s economic growth and prosperity. This is evident by the establishment of the Special Innovation Unit (UNIK) in the Prime Minister’s Department in 2010 to promote innovation, as well as the National Innovation Centre in 2009 and the Yayasan Inovasi Malaysia (YIM-Malaysian Foundation for Innovation) in 2008.

The YIM describes grassroots or cultures-based innovation as one of the three key areas of innovation. The other two are education and industry. Innovation in education is often a significant improvement, because education itself requires a mastery of the established or old knowledge prior to the creation of something new. Innovation in industry boosts competitive advantage and enhances productivity.  

Several drivers of innovation have been identified based on the experience of the world’s innovation leaders.  Manufacturing activity is one of the important elements as it plays a key role for not only the development of an economy but also for innovation. It drives new thinking and innovation – this is proven by the fact that all the innovation leaders are manufacturing- driven economies. Emerging economies like Malaysia must strive to leverage on its manufacturing prowess to push for higher innovation.

Another important driver to innovation is the tie-up between universities and industries.   Research labs in universities are among the biggest drivers for new thinking and innovation as evidenced by the success stories in many countries. For instance, over 2100 international patents were filed by US universities in 2010, which is the highest compared with any other country.


Creating an innovative culture is not an easy task.   The most challenging is to change the mindset and discipline of the society.  The people must be able to work together, take risks and be capable of persisting through failures.  In addition, the government, universities and industries should derive a huge sense of pride and honor among innovators, with innovation becoming the mainstream focus for the whole society.

Significantly broadening public access to ICT and bridging digital divides represent major challenges for Malaysia. Initiatives by the government to allow Employees Provident Fund (EPF) contributors to withdraw a portion of their savings to purchase computers, and civil servants to get interest-free computer loans are steps in the right direction. Likewise, the initiatives to enhance community access to the Internet through publicly provided facilities are commendable attempts to close the access gap between urban and rural areas, as well as across income levels. However, much more needs to be done to widen public access to e-government and Internet facilities in other remote areas. While infrastructure is critical, people also need awareness, skills, and motivation to utilise such facilities, and to leverage on them to produce value-added products and services, as well as to generate fresh ideas. 

Questions to think about:

  1. What are the ingredients of an innovative society?
  2. What is the role of leaders in creating and nurturing a culture of innovation within a society?
  3. What is the role of the corporate sector and universities in promoting innovation?
  4. What are the challenges faced by universities in promoting innovation?
  5. Can innovation really be achieved through government top-down plans and policies?
  6. Can the innovation process be managed? If so, what is the best stewardship model for the process of innovation?
  7. What are the most effective methods of inculcating curiousity and love for knowledge – the two essential ingredients for an innovative, progressive society?
  8. Is Malaysia’s education system an appropriate platform for the growth of creativity and innovation?
  9. Can “old dogs learn new tricks” – what are the most effective ways of changing mindsets and overcoming fear of the new?
  • Malaysia Economy: Selected Issues and Policy Directions
  • Ownership and Control in the Malayan Economy: A Study of the Structure of Ownership and Control and Its Effects on the Development of Secondary Industries and Economic Growth in Malaya and Singapore
  • Economic Development and Social Peace in Islam
  • International Economics and Trade Liberalisation: Challenges to Muslim Countries
  • Reflections on Malaysian Economic Policies
  • MALAYSIA Policies & Issues in Economic Development
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