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

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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
Figure 3 Diagram of Firms Linkages of the GAE MNC in Penang3.1.4. Linkages or CollaborationsIn general the external collaborations are short term. There appears to be almost noformal firm to firm linkages within Penang cluster or out of cluster also. There arelinkages with suppliers within cluster and in other locations are considered very strong.Other actors with which Bosch has strong linkages include USM (the cluster university)and PSDC.The GAE in Penang has strong linkages with suppliers within the cluster. Amongthe key reasons for continuing and extending the value chain activities in Penanginclude the presence of a large supplier base in the E&E sector. In addition theGAE-MNC has strong links with what it calls tier-2 suppliers in Japan and France – thiscollaboration is for joint product development and also to build capacity of thesesuppliers. One of these suppliers has a presence in Penang also.The linkage with cluster university (USM) is fairly strong – the university’slaboratory facilities are used for testing and also the firm uses the knowledge of thefaculty in the mathematical and statistics faculties for various analysis works.104
Page 8 and 9: export-oriented strategy to promote
Page 10 and 11: Table 5 PENANG: APPROVED MANUFACTUR
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Page 16 and 17: • Investment tax allowance on the
Page 20 and 21: Linkage with Other Cluster Actors T
Page 22 and 23: facility. Among the more recent inn
Page 25 and 26: precision engineering and manufactu
Page 27 and 28: Figure 5 Diagram of Firms Linkages
Page 29 and 30: 3.4.2. Key Drivers and Support For
Page 31 and 32: further develop the cluster are con
Page 33 and 34: Kontron has healthy inter firm link
Page 35 and 36: which houses manufacturing cells an
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Page 39 and 40: with a university (Multimedia Unive
Page 41 and 42: the federal government and good inf
Page 43 and 44: 3.9. Case #9 - Motorola MalaysiaFou
Page 45 and 46: Figure 11 Diagram of Motorola Linka
Page 47 and 48: co-develops products and also uses
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Page 53 and 54: 5.4. Entrepreneurial Culture for In
Page 55 and 56: Appendix AScience and Technology In
Page 57 and 58: undertaking reinvestments D (by way
Page 59: Enrolment and Graduation in Doctora

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