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

collaboration between firms in the cluster5.2. Attracting Consultancy Firms into the clusterPenang needs to be able to attract the best consulting firms to setup their firms inPenang to allow strategic planning consultancies to help move the firms in the PenangCluster to a higher parts of the value chain. Penang also has to have market researchcompanies operating in it to allow for market and product exploration and research.More innovative products with better market knowledge will make products made inPenang easily marketable to the world. Besides that, the presence of human capital andfinancial capital in Penang would encourage more high quality internal research anddevelopment to spur the firm’s growth. The Penang government seems more focused onmanufacturing – which is a good thing – but there is need to attract service firms tosupport the growth of the local firms and also TNCs to become independent subsidiariesin Penang5.3. Promotion of Policy and Incentives Available for InnovationInterviews with one of the (former) entrepreneurs in Penang and also from somerespondents indicate that while there are several grants and incentives being offered bythe government – particularly for R&D activities. The SMEs lacked information aboutthese funds and incentives i.e., there is poor information flow on incentives andfinancial assistance provided by the government and other agencies. The relevantagencies like Invest Penang or MIDA need to have road shows or other forms ofpromotion.(Recently the SMART (Small and Medium Enterprises Market Advisory Resource& Training) centre – was set up an initiative of the state government throughinvestPenang to provide market intelligence, business advisory, information & resources,and Training service to SME in Penang.)137