Chapter 3 Linkages for Fostering Innovation Activities – Case ... - ERIA

Technology (MIGHT) and ministries such as Ministry of Science, Ministry ofTechnology and Innovation were setup. SIRIM’s primary objectives are to conductR&D, contract research projects and to develop new innovations in product design andprocess development. MAVCAP helps companies to commercialization and financetheir R&D projects, while MIGHT (non-profit organization) for promoting technologymanagement and transfer.Through MOSTI, the Malaysian Government has initiated funding for Innovationin manufacturing industry through several grants and Incentives. For E & E industry,these schemes include the Technology Acquisition Fund (TAF), the Commercializationof R& D Fund (CRDF), the Industry Grant Scheme (IGS), the Industrial TechnicalAssistance Fund (IATF), while the incentives include tax exemptions for the use ofR&D services, construction of Industrial building for R&D. It is to be noted that, allthese grants and incentives are given to encourage investment in R&D, but there is noformal requirement imposed on firms to undertake R & D activities. Table 6 shows thevarious Fiscal and Non-Fiscal Instruments that are available for manufacturing industryin Malaysia.Table 6 Structure and Content of Innovation Policy – MalaysiaFiscal InstrumentsTax Incentivesfor R&DThere are nine differenttypes of tax incentivesResearch GrantsIndustry R&D Grant Scheme (IGS)Technology Acquisition Fund (TAF)Multimedia R&D Grant Scheme (MGS)Intensification of Research in Priority AreasCommercialization of R&D Fund (CRDF)Note: A brief description about various Research Grants schemes is in Appendix A.Non-Fiscal InstrumentsNot Clearly ArticulatedIn addition to grants there are tax incentives provided by Malaysian Government tofirms to encourage them to take R&D activities include:100