GOVERNMENT ’ S ROLES IN ENHANCING ENTREPRENEURSHIP IN MALAYSIA : INCUBATION PROGRAMMES

1. GOVERNMENT’S ROLES IN ENHANCING ENTREPRENEURSHIP IN MALAYSIA : INCUBATION PROGRAMMES

2. INTRODUCTION • Malaysia has too much government and big corporate economy. It needs more of an entrepreneur driven economy. • The importance of entrepreneurship in Malaysia is because entrepreneurs innovate. • Innovation in Malaysia does not necessarily come from new enterprises but also from Government Linked Corporations (Perodua with the Kancil), Umno Linked Corporations (Renong/ UEM with the North/ South Highway) and even true blood entrepreneur companies like Air Asia.

3. GOVERNMENT’S ROLES IN STRENGTHENING THE ENTREPRENEURSHIP • Funding support • Advisory services • Entrepreneurial training and development programmes • Incubators programmes

4. INCUBATORS PROGAMMES • The need for technology incubator programme is created by two fundamental forces: • Demand from industry for skilled human resources • Strategic direction from Government to improve technology industries • The pre requisites for a successful national incubation programme are: (a) Government Strategy (b) Capital Support (c) Graduate Source (d) Technology Facilities

5. The incubators will require capital support, sources and infrastructure to develop the industries. Funding may come from several sources from private venture capital to direct subsidy by government.

6. Government strategy and active support are essential to stimulate and sustain the growth of technology industries. • The Government provide: • Land and money in terms of development funds • important source of financial support • establishing policy, industry liaison • monitoring the performance of the various incubator activities set up

7. OBJECTIVES OF INCUBATOR PROGRAMMES • Support and sustain university research and development programmes • To encourage and facilitate the formation and growth of the new businesses • Assist and support start-up companies meeting the technological criteria to achieve financial break-even within 3 years of engagement with the incubator • Provide business management training for selected entrepreneurs • Establish knowledge-sharing networks between universities, incubators, and established technological industries.

8. INCUBATORS IN MALAYSIA • Technology Park Malaysia Corporation (TPM) The incubator concept in TPM are categorized into three categories: (i) Innovation House (for individual entrepreneurs, scientists, software writers, innovators and start-up entities at pre-production stage) (ii) Incubator Centres (for individuals and companies expanding from the prototype and pre-production stage through to market testing and production) (iii) Enterprise House (for medium-sized companies or R&D wings of large companies or enterprise expanding from the other TPM facilities)

9. (b) MTDC Incubation Centres • MTDC Incubation Centres were set-up to enhance the technology development activities through collaboration with universities. • This will provide the universities with source of recurring income, further streamline the activities of MTDC and provide closer relation with the host-universities.

10. (c) SIRIM Industrial Incubator • SIRIM’s Industrial Incubator’s areas of focus are Process Technology, Advanced Materials and Advanced Manufacturing Technology (Industrial Automation/Mechatronic, Industrial & Engineering Design, CAD/CAM, Industrial Instrumentation & Electronic and Artificial Intelligence System).

11. (d) MSC Central Incubator (MCI) • MCI is designed to assist in R&D while providing market exposure to tenants. • This programme is also expected to attract investors interested in new, innovative, commercially viable products.

12. (e) Kulim Hi-Tech Park • It incorporates several functions: • Industrial research and development facilities • New township concept with shopping centres • Medical and educational institutions • Recreational facilities.

13. FINANCIAL SUPPORT FOR INCUBATING ACTIVITIES • Intensification of Research in Priority Areas Fund (IRPA Fund): • This programme was established to provide funds to support R&D in the public sector for improvements in the socio-economic fields.

14. (b) Industry Research and Development Grant Scheme (IGS) • The purpose of IGS is to increase the private sector R&D and promote closer cooperation between the private sector and public sector institutions and public sector universities through collaborative linkage.

15. (c) Multimedia Super Corridor Research and Development Grant Scheme (MGS) • The purpose of the MGS is to help start-up and young local companies, including joint ventures, to develop multimedia technologies and applications.

16. (d) Demonstrator Application Grant Scheme (DAGS) • The purpose of DAGS is to encourage Malaysians to adapt and customize existing IT and multimedia technologies.

17. (e) Technology Acquisition Fund (TAF) • The technology activities eligible for partial funding includes purchase of high-tech equipment and machinery, technology licensing, acquisition of patent rights, prototypes and design, expert-sourcing programme.

18. (f) Commercialization of R&D Fund (CRDF) • The activities eligible under the partial funding include market survey and research, product or process design and development, standards and regulatory compliance, and intellectual property protection.

19. FUNDING FOR THE DEVELOPMENT OF HUMAN RESOURCE SKILL • Science and Technology Development Fund (S&T HRD Fund) • The S&T HRD fund was set up to create a pool of skilled and trained S&T manpower among professional and supporting staffs.

20. (b) National Science Fellowship (NSF) • The NSF scheme is intended to enhance the number of skilled and qualified R&D researchers in the selected fields and to create a pool of “critical mass” in less researched fields and to encourage bright graduates to be involved in S&T research. (c) Postgraduate and Post Doctoral Program (PPP) • The PPP scheme is intended to increase human resource skills and expertise in advanced technology areas.

21. Networking and structural relationship between incubators,universities, Government and supporting services

22. Extensive networks at many levels operate in Malaysia to support the incubator programme. • Sponsored and supported by the major science and technology organizations in Malaysia, such as TPM, MDC and the universities, this ensure they receive appropriate level of support and investment.

23. CONCLUSION • In Malaysia, continuous improvements, new avenues and strategies to existing programmes are being pursued to positively reinforce successful technology business incubators. • For the maximum cumulative benefit from the incubator programmes, the Government must provide the appropriate degree of strategic, legal, financial and administrative support.

24. The success of the incubator programmes depends to a great extent on the availability of graduates, access to research and development facilities and an environment of intellectual creativity. • There should be a mechanism for reinforcement of formal and informal networking between industries, universities, research institutions and the incubators. • To maximize the productive flow of ideas, share research, provide mutual support and encouragement and to assist with the evolution of the incubating businesses from start-up mode to sustainable profitability.

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