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

developing certain factors conducive for setting up of manufacturing plants – thelocation factors including availability of cheap labour and supportive policies of thefederal government and good infrastructure. Starting as a manufacturing unit for exports,GAE Penang moved into R&D (product development) and now is an independentsubsidiary responsible for design, manufacturing and marketing car multimedia andnavigation products under its umbrella.3.1.2. Types of and Motivations for InnovationProduct Innovations are to cater to the local markets ie ASEAN markets. Most of theinnovations are for introducing new products more to avoid competition and processinnovations to support the manufacturing of the new products and also to reduce costs.Process innovations include those to cut input costs – sourcing for new materials. Theproduct innovations include new to the markets of the firm and also new to the firm inPenang.3.1.3. Key Drivers and Support for InnovationThere are several sources / support factor for innovation at the GAE. Keyinstitutions that have been supportive for the setting up for the facility are MIDA andMITI at the national level. MIDA provides grants for R&D activities in addition to othersupport like tax incentives etc. At the regional level, the state government, PSDC, thecluster university and FrePenCa are key institutions. A critical driver seems to be thesupport from within the organisation. The organisation has 280 locations linked in anetwork. Bosch has several R&D centres around the world with varying competenciesoffering in-house source of information. Information is available through internet andalso through corporate magazines / news letters.The following diagram provides an overview of the linkages GAE MNC in Penanghas for Innovation103