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

personnel amongst the firms within the cluster is nonexistent – in the case of MNCs andlocal firms with international presence (one has manufacturing plants and design centreacross the region and the others have a ‘US’ office) there is extensive movement ofengineers between their different global locations.4.5. Obstacles for InnovationIn general the main limitation for moving into innovation activities – particularlyfor ‘research’ part of the “R&D” – is the lack of enough competencies among thesuppliers, lack of talent / human capital (particularly PhDs), lack of higher researchcapability of the local university (in their related areas). All the respondents discuss thatthey are open for collaboration within the cluster and also globally – but somehow thishas never happened. All the R&D units have been developed as fully in-houseindependent units – with the exception of with formal links only with the group.Another issue in Penang is the need for staff with administration, economy, socialsciences and law qualifications is rising as there is a lack of talent in these sectors whilethere is no shortage of people with technical educational backgrounds. The presence ofa skilled workforce in a region is a key requirement of any regional economy andtechnological system.4.6. Public Policies Supporting Innovation ActivitiesOverall the current policies – be it related to infrastructure development, taxincentives, Grants etc are all considered critical for the moving up the value chain intodesign and development activities by the firms in Penang. Key institutions at thenational level include the Ministries for Intl Trade and Industry (MITI) and Science,Tech. and Innovation (MOSTI), MIDA – the industry development authority. Thepolicies that have attracted MNCs to have a major presence in the cluster are important– the MNCs play multiple roles – as a employers of qualified engineers, as large133