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

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elated activities. An interesting aspect of Penang – is the cultural identity of the people– particularly the engineers in the manufacturing sector – be it electrical and electronicsengineering or others also. There is a strong commitment of these people to thecity/island and the respondents as well as other people interviewed state that overallPenang has a stable “population” and that while there is internal mobility ie peoplecoming in – most of the people have been living there for a long time that has build acommunity and hence ‘learning’ has taken place in a context over a long period of time.There is also what has been mentioned as ‘Engineer Nobilities’ in this city. There is alsoan entrepreneurial culture emerging slowly with the incentives being provided by thegovernment helping.5. CONCLUSION AND RECOMMENDATIONSPenang’s E&E sector can be seen as an internationally linked cluster. It’s a clusterthat is based on supporting policies and institutions (actors) that provide support forinnovation, both at the national level and the regional level and driven by foreign MNCsand now also local MNCs. In general interviewees all agree on (1) Human Capital (2)Low Costs (3) Entrepreneurial Culture) (4) Pro Industry Policy as key factors for thedevelopment of Innovation activities in the Penang region. In addition to nationalinstitutions the key actors in the Penang regional innovation system include the PenangSkills Development Corporation, the University (albeit at a lower level), TrainingInstitutes, MNCs and presence of large supplier network. Intra-cluster firm linkages arevery weak but global linkages within a firm are very strong. This strong orientationtowards headquarters or research and development centre’s of multinationalcorporations and lead users in technologically advanced countries appears to yieldpattern of linkages in which firms are able to 'leapfrog' firms in neighboring ASEANcountries.A notable issue is the lack of joint ventures (JV) firms (there is one firm and the135
author is trying to make contact) but most respondents feel negative towards JV typeorganisation for technological developments and there also appears to be so specificpolicy to support JV form of organisations (like in the MSC cluster). An interestingpoint is the role of MNCs in pushing the local university to collaborate and develophigher capacity for research. All these have implications and recommendation forpolicy.Based on the cases and some additional interviews with certain ‘stakeholders’including academics from the cluster university, an entrepreneur who has moved out ofthe E&E sector into retail and consultants the following recommendations are made forsupporting innovation activities among firms in Penang.5.1. Targeted Policy for E&E Sector and Joint VentureTo improve the Industrial Base of Penang, we suggest that more efforts are made toimprove the types of industry the Penang Cluster is serving. Penang has always been thehub for electrical and electronics manufacturing so an E&E industry specific policy andefforts to bring in firms in the E&E value chain is wanting:• That relvant agency at the state and national level should target certainsub-sectors in the E&E sector and attract key ‘supplier’ firms which are locatedin East Asia (Taiwan, Japan or Korea).• Some of the case respondents – both TNCs and larger local design firmsmentioned the need for the development of a software developer group inPenang – as software development is an integral part of any product of processinnovation in the E&E industry. This could be done through some co-ordinationwith the MSC project (ICT cluster project) or independently.Consequently policy to encourage joint ventures type development is needed. thismay help to bring in the ‘needed’ suppliers and also increase co-operation or136
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 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
Page 49: customers, as developers of supplie
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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