Harnessing science for wealth creation

Publication: NST

Date of publication: Oct 1, 2013

Section heading: Main Section

Page number: 014

Byline / Author: By Dr Ahmad Ibrahim

NEXT month, the prime minister will unveil the 2014 Budget. As usual, the speech will include estimates of income and expenditure for next year.

Reducing the deficit will continue to be a key target. It is also expected to touch on ways to expand the country's income base. The goods and services tax (GST) is one option being discussed.

However, it should not ignore other potential new growth areas. It has become evident in recent years that the country has to create new sources of revenue as it prepares to move up the economic ladder. The Economic Transformation Programme (ETP) is a good start. But we also need to look for longer-term support for the economy. Some of the industries that feed the nation's coffers are at risk of decline.

The palm oil sector, for example, still struggles to expand production. Land is a limitation. The other obstacle concerns objections by some groups on grounds of sustainability. There is, however, hope that yields may improve as a result of the recent breakthrough in the oil palm genome by the Malaysian Palm Oil Board.

The petroleum sector is also expected to witness a decline in coming years. Oil deposits will not last forever. We are now forced to explore marginal areas where extraction is more costly.

The electric and electronic sector is on shaky ground. We are too dependent on multinationals to drive that sector. Some have moved to other lower-cost countries. The country, therefore, needs to constantly scout for new growth areas.

In an innovation-driven world, economy, science and technology hold the key to many new growth areas. Over the years, the government, through the Ministry of Science, Technology and Innovation (Mosti), has invested in research and development to develop technology.

This is undertaken by universities and research institutes in the country. R&D has delivered some potential technologies and products that may be commercialised.

Commercialisation, however, should not be the only endgame. Instead, such technology should be strategised as a forerunner of new growth areas. Mosti is the ministry for the new economy. It is where ideas on the new growth areas are born and nurtured for the nation's well-being.

The new science, technology and innovation (STI) policy that will be launched soon is designed to deliver that. Among the six pillars identified in the policy, the most critical one is, admittedly, to energise industry. This is the endgame for the policy.

After all, Mosti's vision has always been to harness STI for wealth creation. So, creating new growth industries is within its mandate. And Mosti is doing just that. A number of flagships have been identified for possible mention in the Budget.

The important criteria for such flagships are that they should be technology-driven, new in terms of global business and carry some element of risk which has to be managed. These should not be businesses which are already crowded.

Scanning the global emerging technology business, it has become evident that there are a number of potential growth areas.

As expected, much of the emerging global interest is linked to green technology, halal pharmaceuticals and healthy foods.

Fuel cell-based business, for example, is an area that can be explored as a flagship. Much research has happened in Malaysia on this. It is now time to move the fuel cell technology into a full industry.

In the energy sector, thorium, a safer replacement for uranium, is being researched for nuclear power. Over the long term, experts see a thorium-based nuclear plant as a big energy business.

Regarding halal pharmaceuticals, the world is looking at plants as factories to produce vaccines and medicinal drugs. Incidentally, tobacco is the best candidate crop to host such technology. With the nation's tobacco farming facing threats post-Asean Free Trade Area in 2015, such a project should be welcomed by tobacco farmers in east coast states. All such projects conform well to the new economic model of being high income, inclusive and sustainable. The 2014 Budget should seize this opportunity.