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

precision engineering and manufacturing supply chain players for the electronicsindustry in the Asia Pacific region. Eng Teknologi Holdings Bhd (ETHB), the Group'sparent company, is located in Penang and serves as the regional headquarters. It is listedunder the technology section on the Main Board of the Kuala Lumpur Stock Exchange(KLSE). Eng Teknologi’s Integrated Engineering Centre has manufacturing facilities ofmore than 75,000 sq. metres with approximately 1,000 units of CNC machines – whichare strategically located throughout Asia Pacific Region, enabling it to meet itscustomers’ specific requirements. This case is focused on Eng Tekhnologi’s businessencompassing the design & manufacturing of quality precision components andassemblies which are categorized into the global Data Storage Group (DSG).3.3.1. Factors Attractive in Penang for Manufacturing and Design and DevelopmentThe firms attributes Malaysian government's (both at the national and state level)effort to promote the growth of small and medium enterprises in the country as theprimary factor. The other key contributing factors include the various incentives grantedthrough MITI and MOSTE, and the availability of a skilled management and operatingworkforce.3.3.2. Types and Motivations for InnovationThere are both product and process innovation activities in the firm. While theproduct is not new to the world, it’s a new to the firm innovation. Most of the productinnovations are for introducing new products more to avoid competition and to cater tothe ASEAN market. One of the main product development efforts has beenco-designing (with different customers) of the ‘actuator’ or E-Block product. Theprocess innovations follow to support the manufacturing of these new products and alsoto reduce costs. Process innovations include those to cut input costs – sourcing for newmaterials.110