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

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Clearly the strong TNC base in the industry, mobility of the skilled human capitaland support from the governments has been key for supporting firm development andinnovation. Linkages within and outside cluster are critical for the innovation activities.Interestingly ViTrox is an MSC Status Company (gives it access to several moreincentives from government under ICT sector schemes). "ViTrox also has won someawards included - the Silver Recognition at the Malaysia HR Awards 08-09 whichcovers the HR Development Strategy, Best Practises in HR, Continuous Learning andTraining, Application of HR System and Technology and Recognition of HR asStrategic Resource in the growth of organization".3.8. Case #8 - Mayang Manufacturing Sdn. Bhd.Mayang Manufacturing (Mayang), a local SME/I, started its operations in Penangin 1995. Mayang is a private limited company in Malaysia with production facility onlyin Penang and is principally involved in producing and supplying customized metalstamping parts, electrical components and industrial electrical fans. Mayang operatesfrom its own premises in Sunway Business Park of Perai Industrial area in Penang.Current staff strength at Mayang is about 50 and its sales turn over in 2008 is about RM5 million (approximately 1.45 million USD). Mayang currently manufactures precisionmetal parts, electrical components and electrical fans for companies in Perak and Kedahstates in Malaysia and multinational companies in Penang in Audio Visual, Automobileand Electrical & Electronic industries. Their MNC customers include Robert BoschMalaysia, Sony Malaysia and Perodua the car manufacturer in Malaysia is its localcustomer.3.8.1. Factors Attractive in Penang for ManufacturingMayang chose Penang to setup its manufacturing unit due to the availability ofskilled technical staff and cheap labour, and low operation costs. Supportive policies of125
the federal government and good infrastructure in Penang also helped Mayang to startits production quickly. The presence of a large TNC base as a market was a criticalfactor. Though the initial operations were mainly in manufacturing, later Mayang starteddistribution of laboratory and high-end technical equipment.3.8.2. Types and Motivations for InnovationInnovation at Mayang is driven by requirements from its customers. Majority ofthese innovations are aimed at improvements in products to meet the specific designrequirements of customers and improving existing products to reduce the costs andhence achieve competitiveness in the market. Process innovations are aimed at both toreduce costs and the overall time in production3.8.3. Support for InnovationThe main source for innovation at Mayang is their in-house design engineers. Thein-house design team uses information from internet sources to enhance their designskills.. Key institutions that are supportive to Mayang for innovation include the MIDAand MOSTI at the national level. Mayang is successful in getting grants from both theseministries to procure special fabrication machinery. To a smaller extent, professors fromthe University Malaya (UM), helps Mayang to develop new designs for industrialelectric fans.3.8.4. Linkages of InnovationOverall the linkages developed by Mayang are of a short term nature. Though thefirm is successful in getting grants from national ministries MIDA and MOSTI – thereappears to be no follow in terms of accessing newer funding options for encouragingR&D activities. Mayang has no firm to firm linkage within Penang cluster. The firmdoes not have any linkages with both suppliers and customers within cluster and in other126
Page 8 and 9: export-oriented strategy to promote
Page 10 and 11: Table 5 PENANG: APPROVED MANUFACTUR
Page 12 and 13: participating in the survey, improv
Page 14 and 15: 1. Customized incentives to attract
Page 16 and 17: • Investment tax allowance on the
Page 18 and 19: developing certain factors conduciv
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
Page 37 and 38: this requires the application for t
Page 39: with a university (Multimedia Unive
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
Page 49 and 50: customers, as developers of supplie
Page 51 and 52: author is trying to make contact) b
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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