1. Lecture 5 Accounting for S&T

3. When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind" (Lord Kelvin)

4. "Not everything that can be counted counts and not everything that counts can be counted." (Albert Einstein)

8. Why S&T Indicators? L egitimisation : demonstrate support for existing policies/programmes A ccountability : information on how well funds have been utilised as well as performance of S&T system M onitoring : performance of existing policies/programmes A wareness : information on understanding and performance of the S&T system Towards enhanced management of STI

9. A Cautionary Note on Indicators No magic bullets – variety of indicators needed ( input; output; outcome; impact; linkage etc.). Each indicator by itself is incomplete Need to consider complementary information from case studies, evaluation studies for more complete picture/assessment;

12. Linkage Indicators -number of collaborative research projects; -number of co-authored papers; -level of funding by industry;

13. In the context of National System of Innovation, we need to measure knowledge flows such as - technology transfer; -technological alliances -machinery diffusion

14. Knowledge creation/absorptive Capacity Input Indicators -e.g. % GDP spent on GDP; researchers per 10,000 labour force; R&D grants Knowledge Acquisition Acquisition indicators – e.g. imports in tech. balance of payments; no. of regional offices; no. of firms acquired; Knowledge infrastructure capacity Infrastructure indicators e.g. expenditure on capital items; ratings on facilities; no. of PRIs; Knowledge Dissemination Capacity Diffusion indicators e.g. % budget allocated for diffusion activities; no. of tech. fairs; Knowledge Application Capacity Application indicators e.g. % of workforce with university education; % of RSEs; Knowledge Output Output indicators e.g. no. of papers; no. of S&T graduates/post-graduates from universities; no. of patents Knowledge Impact Impact indicators e.g. No. of university spin-off companies; no. of companies exited from incubators; No of cited papers; Increase in exports/reduction in imports Knowledge Linkages Linkage indicators e.g. no of joint projects; no of co-papers; % industry sponsored funding; Knowledge Society Awareness indicators e.g. awareness on S&T issues; acceptance of S&T; internet penetration; PC adoption; Knowledge governance Governance indicators e.g. industry involvement in management of PRIs; univ; regulations favouring autonomy ASSESSING SCIENCE, TECHNOLOGY & INNOVATION IN MALAYSIA Conceptual Framework of Indicators for Assessing Science, Technology and Innovation in Malaysia

15. The Science System The science system or scientific infrastructure may be defined in terms of those institutions and social structures whose activities mainly consist in the discovery, articulation and propagation of scientific and technological knowledge .

16. GOVT. Indu-stry Acad-emia Society S&T System

17. Scientific accounting should be thought of more in terms of the ways in which resources are allocated over different categories of scientific expenditures rather than in input/output terms. The main reason for this is that scientific and technological expenditures are measured at cost since outputs are much more difficult to quantify.

18. Unlike social accounting, scientific expenditures have to be divided between (a) sector of source of funds; and (b) sector of performance .

19. Measuring Output of S&T The main reason why it is hard to assess the output of S&T activity is because much output realises its value mainly within the context of later productive activity. Thus, it is impossible to place an unambiguous value on the scientific output itself since the value of final product is the result of a combination of many inputs of which scientific research is only one.

21. But because scientific investigation is highly uncertain both in terms of technology and commercial viability, application of this technique to scientific expenditures must be treated with caution

22. Patents widely used as a measure of inventive/innovative output; reflect capacity to generate change and improvement; Adv : using patents - statistics are readily available;

27. Adv : statistics on licence payments are readily available; Disadv : licence fees are not the only form of payment in which suppliers of technology receive payment. Hence data on licencing fees need to be interpreted with caution.

30. R&D Expenditure as a % of GDP Year % of GDP Indonesia 1995 0.20 Philippines 1997 0.22 Malaysia 2004 0.63 Singapore 2000 1.89 UK 1998 1.83 Taiwan 1999 2.05 US 1999 2.65

31. No of researchers per 10,000 labour force Year Number Indonesia 1991 3.0 Philippines 1991 3.0 Malaysia 2004 21 Singapore 2000 83.5 UK 1995 95.0 Japan 1999 136.0 US 1999 74.0

32. Malaysia ranked 52 nd among 179 countries in terms of output of ISI publications for period of 2001-2005. We produced 5,688 publications or 0.14% of total for the period under review; Among ASEAN countries: Singapore – 35 th ranking; 0.61% Thailand - 45 th ranking; 0.45% Indonesia – 67 th ranking; 0.06% Philippines – 70 th ranking; 0.05%

35. In terms of citations, Malaysia is ranked 57 th with total of 10,667 citations ; Other ASEAN countries: Singapore – 37 th ; 76,666; Thailand – 43 rd ; 26,626; Vietnam – 64 th ; 7080; Indonesia – 65 th ; 6989; Philippines – 71 st ; 5765

36. US Utility Patents granted to Selected Countries, 1977-2004 55.6 1,725,549 United States 2.7 83,991 United Kingdom 0.01 348 Thailand 1.19 36,802 Switzerland 1.15 35,673 South Korea 0.09 2,719 Singapore 0.91 28,256 Netherlands 0.02 547 MALAYSIA 18.5 574,865 Japan 0.4 12,348 Israel 0.05 1,843 Ireland 0.06 1,921 India 0.3 10,802 Finland 0.08 2,593 China 2.1 63,944 Canada 0.5 15,876 Australia % of Total US Patents granted, 1977-2004 Country

37. US Utility Patents granted to Selected Countries, 1977-2004

40. Impacts of R&D are partly captured in input-output balance sheets. In reality these impacts are exceedingly complex. Utility of patents weakened by : - differing patent laws and procedures; -patents issued for inventions of unequal value; -many patents issued for invention which are never used long after the patent is issued -patent applications governed by market pull as well as by technology push – lower tendency to patent in small markets

41. OECD S&T output indicators not generally applicable in the developing countries. Technological balance of payments relevant only to payments incurred in formal contracts of tech. transfer between countries.

42. Malaysian Science and Technology Indicators Report 2006 DRAFT FINAL REPORT DECEMBER 2006

45. Increase in student registration for science and mathematics at SPM and STPM levels

48. Stocktake 1: Education in STI Increase in students registration for science and mathematics at SPM and STPM levels; Decline in proportion of Arts students in first-degree enrolment in public IHLs Sharp increase in postgraduate enrolment and graduation where Arts students predominate. Ratio of PG to UG enrolment increased from 1: 14 (1994) to 1: 6.7 in 2004; First degree enrolment at private HEIs almost 50% that of public IHLs; More women enrolment and graduates at first-degree level in both Arts and Sciences

52. National R&D Expenditure by Sector (1996 – 2004) 1996 1998 2000 2002 2004 R&D Expenditure Total GERD (RM million) 549.3 1127.0 1,671.5 2,500. 6 2,843.7 Total GDP (RM million) 253,732.0 283,243.0 340,706.0 360,658.0 449,609.0 Ratio GERD/GDP (Research Intensity) 0.22 0.39 0.50 0.69 0.63 GRI (RM million) 108.7 247.3 417.5 507.1 296.9 IHL (RM million) 40.4 133.6 286.1 360.4 513.3 Private Sector (RM million) 400.1 746.1 967.9 1,633.1 2,033.5 Proportion of R&D Expenditure GRI(%) 19.8 21.9 25.0 20.3 10.4 IHL(%) 7.4 11.9 17.1 14.4 18.1 Private Sector (%) 72.8 66.2 57.9 65.3 71.5

53. National R&D Manpower (Headcount)

54. NUMBER OF RESEARCHERS PER 10,000 LABOUR FORCE (1992-2004) Researcher per 10,000 labour force has increased to 21.3 in 2004 from 18 in 2002 – …but well below that of developed countries

57. Increasing importance of pre-packaged incentives

59. Radio, television and communication equipment Coke, refined petroleum and nuclear fuel Office, accounting and computing machinery Scientific equipment, watches and clocks Motor vehicles, trailers and semi-trailers Figure 5.2: Incidence of Innovation by Industry 67 43 50 71 67 76 57 63 47 56 58 32 62 57 25 41 56 55 62 29 73 46 33 57 50 29 33 24 43 37 53 44 42 68 38 43 75 59 44 45 38 71 27 54 0 10 20 30 40 50 60 70 80 90 100 Recycling Furniture Other transport equipment Electrical machinery Other machinery and equipment Fabricated metals Basic metals Non-metallic mineral Rubber and plastics Chemical Publishing and printing Paper Wood Wearing apparel Textiles Food and beverages Percent (%) Innovating Non-Innovating Tanning and dressing of leather Source: Mastic

60. Innovatin g Figure 6.3: Incidence of Innovation by Size, Manufacturing 0 10 20 30 40 50 <20 20-49 50-249 >249 Non-Innovating

63. ISI-based publications in the field of Biotechnology and Applied Microbiology in ASEAN (2001-2005)

64. Comparison of selected top research fields for selected ASEAN countries (2001-2005)

65. Publication and Citations in Malaysia by selected IHLs (2001-2005) Top 10 individual Scientists by No. of Papers (2001-2005)

66. Countries that collaborated with Malaysian-based authors sorted by number of publications (2001-2005)

68. Patent Applications Filed in Malaysia by Malaysians and Non-Malaysians for period 1996 – 2000 and 2001 – 2005 1996-2000 2001-2005 Variation (Percentage increase or decrease during the two 5-year period under review) Malaysians 1,017 2,013 + 97.9% Non-Malaysians 29,039 25,648 - 11.7% Total applications 30,056 27,661 -8%

69. Patents Granted to Malaysians and Non-Malaysians by the Intellectual Property Corporation of Malaysia (MyIPO) for period 1996 – 2000 and 2001 – 2005 1996 - 2000 2001 - 2005 Variation (Percentage increase or decrease during the two 5-year period under review) Malaysians 215 142 - 34% Non-Malaysians 4,067 9,253 +127% Total granted 4,282 9,395 +119%

70. Time Taken For Obtaining a Patent in Selected Countries Source: Manual For the Handling of Applications for Patents, Designs and Trade Marks Throughout the World, Kluwer Law International, 2005 and Guide For Applicants Issued by the Various National Patent Offices Applicant must provide the US Patent Office all the disclosures in order to expedite grant . 3-4 years United States Request for examination must be filed within 2 years from the filing date of the UK Patent application. 4 years United Kingdom Request for examination must be filed within 2 years from the filing date of the Singapore Patent application 2-4 years Singapore Request for examination must be filed within 2 years from the filing date of the Malaysian Patent application 4-5 years Malaysia Request for examination can be filed up to 7 years from the filing date of the Japanese Patent application 7-12 years Japan Request for examination must be filed within 2 years from the filing date of the European Patent application 7 – 8 years European Patent Office Remarks Time Taken Country

72. Number of Computer per 1000 people in Malaysia and Selected Countries, 2004 Source: Computer Industry Almanac, IMD World Competitiveness Report 2005 Computer ownership in Malaysia highest in ASEAN (after Singapore) but well below that of developed countries

73. Number of Internet Users per 1000 people in Malaysia and Selected Countries, 2004 Source: Computer Industry Almanac, IMD World Competitiveness Report 2005

80. R&D Manpower need to address problem of static growth of supporting staff and technicians Anecdotal evidence suggest exodus of senior researchers over next 2-3 years – succession planning/mentoring must be in place

82. Public Support for STI Noticeable decline in R&D grant approved under the various grant schemes since 2004 – does not bode well for industry to seek such funding. Efforts must be made to encourage more firms to apply for these incentives as well as to enhance the administrative machinery governing the approval of these grants;

84. Trade in Technology Despite some improvements services account continues to be negative with the deficits remaining high. There is thus a need to strengthen government policy to quicken further learning and innovation in firms in Malaysia. The growth in surplus involving construction and engineering involving other economies also suggests that the government should encourage diversification of service markets .

87. Public Awareness Our lower scores on understanding of S&T necessitates more proactive measures to increase public awareness of S&T, and to review the effectiveness of the programs.

88. STI Performance Scorecard 2006 US (79); Europe (67); US(45); Europe (53) +ve 62.3; - 63.7; 71.9; 47 Attitude towards S&T # Index of Scientific Promise # ; Index of Scientific Reservation # NA - 2.32 2.22 Mean Score of perceived knowledge in S&T NA - 2.41 2.40 Mean Score of perceived interest in S&T S&T Knowledge, Understanding and Awareness > 60 18 +ve 36.9 56.5 Cellular phone subscription per 100 inhabitants > 60 17 +ve 31.9 38.2 Internet users per 100 population > 500 16 +ve 137 192 No. of computer per 1000 people Knowledge Infrastructure and Diffusion 152 15 +ve 2.5 3.6 No of USPTO patents granted per million population > 6,300 14 -ve 32 24 No. of patents granted (Malaysians) > 10,000 13 +ve 322 522 No of patents applied (Malaysians) 37,502 12 -ve 2716 1360 Total Citations (2001-2005) 16,628 11 +ve 938 1179 Total number of publications in ISI-indexed journals, (1981-2005) Outputs and Outcomes >10 10 - NA 2.0 % of public R&D financed by industry/external funds Interaction and Cooperation 27 9 +ve 33.7 35.8 Women researchers as proportion of total researchers (%) 1:11.6 8 +ve 1:8.4 1: 6.6 Proportion of postgraduate enrolment to undergraduate enrolment 32.4 7 -ve 44.2 40.6 Science and engineering enrolment as % of total post-graduate enrolment 44.6 6 -ve 51.8 48.2 Science and engineering enrolment as % of total first degree enrolment 0.74 5 +ve 0.40 0.55 Total FTE per researcher 61 4 +ve 18.0 21.3 Researchers per 10,000 labour force > 100,000 3 +ve 24,937 30,983 Total R&D Personnel (Headcount) Human Resources > 62 2 +ve 65.3 71.5 Industry R&D expenditure as % of GERD 2.33 1 -ve 0.69 0.63 Overall R&D Intensity R&D Investments and expenditure Average/Selected OECD Trend Year 2002 Year 2004 Indicator Category