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

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3.3.3. Key Drivers and Support for InnovationThere are several sources / support factors for innovation at Engtek. Keyinstitutions that have been supportive for the setting up for the facility are MITI andMIDA at the national level. With MIDA providing grants (from MITI and MOSTE) forR&D activities in addition to other support like tax incentives etc. At the regional level,the state government support has been, PSDC, the cluster university (USM) andFrePenCa are key institutions. Another factor supporting innovation seems to be thesupport from within the organisation. One hand it’s the mission of the organisation to bea TNC and have in-house design and development capabilities. In addition, theorganisation has a few locations around ASEAN near to their regional customers andthere is flow of knowledge from customers in these locations to the Penang facility –through meetings and also movement of engineers. Information from customers servingas a driver for innovation – the firm has inter-group meetings (conferences or seminars)for exchange of technology information.3.3.4. Linkages or CollaborationsThere appears to be almost no formal firm to firm linkages within Penang cluster orout of cluster also. The firm attributes support for innovation due to the availability ofand having strong linkages with suppliers, sub-contractors within Penang. There appearsto be a very weak link with Cluster University. There is strong link with PSDC.111
Figure 5 Diagram of Firms Linkages of Engtek PenangAn interesting set of ‘actors’ that are linked to Engtek are entrepreneur groomed byEngtek – to become suppliers / co-developers (also known as Intre-prenuership). Engtekthemselves have had the experience of getting support from TNCs located in Penang –in terms of being a customer and also training in technology related and other areas –based on this experience they have also groomed some of their employees to start upfirms in Penang to support Engtek and also be independent – there is a case whereEngtek has even bought out one such ‘groomed entrepreneurial venture’.3.3.5. Issues in Policies related to InnovationOverall the government policies, both at the national and state level, are consideredto be favourable and supportive for Innovation – be it in terms of grants, infrastructureprovision, policies like tax rebated etc.3.3.6. ConclusionOverall the main support factor for innovation are skilled manpower base in Penang,a strong industrial base - with a mix of TNCs and local firms – offering support as112
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Chapter 3 Linkages for Fostering Innovation Activities â Case ... - ERIA

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