INNOVATION ENABLING TRANSFORMATION

LIMKOKW

ING

A compilation of speeches, articles and blogs reprinted from New Sunday Times,The Star, Limkokwing publications and websites

INNOVATIONWe must build for this nation a big passion for innovation. We must makethe development of the creative mind a national agenda. Unless we getreally serious about cultivating creativity and promoting innovation, the

transformation to an innovation economy will not readily happen.

Enabling TransformationThe creative passion

that leads to innovation The world is divided into countries that innovateand progress and those that don’t. The nationsthat have innovation high on their priority listsare the nations that are the wealthiest and themost advanced. Essentially Innovation is aboutmoving forward, improving, upgrading, pro-gressing and evolving. It is a cycle of life wherewe will stagnate if we do not innovate. Successfulbusinesses innovate constantly.

To understand innovation is to see it as morethan just a process. It is a force that has a lot to dowith people. It is about mindset and attitude. Itis also about desire and passion.

The ability to innovate is how we manage know-ledge, skills and technology to arrive at a placewhere new things happen.

Innovation takes place in countries where thereis encouragement for new ideas. It becomes

part of the country’s culture and is woven intoits educational system, industrial managementand political manipulation.

It is natural for these countries to lead the world.It is also these countries that attract the best talents,the best brains and so the innovation lead con-tinues. Countries that still hold to traditionaland obsolete methods of governance will even-tually be swallowed by these highly competitivecountries through economic power play.

In this collection of articles and speeches, TanSri Dato’ Dr Lim Kok Wing offers his frankviews on the issues of building an innovativenation, how innovation fuels transformationand the kind of people needed to shape thechange. His views are considered radical bysome while many others think it is timely inview of the changing times.

LIMKOKWING

3rdEdition

Front cover exclusivity: One of Malaysia’s most recognizable faces of ‘creative education’, Tan Sri Dato’ Sri DrLimkokwing, deservingly blazes the front cover of the prestigious Quill. Bestowed the “Father of Innovation inCreative Education” by the Minister of Science, Technology and Innovation, the Founder President of LimkokwingUniversity is acknowledged as the mind behind promoting innovation as the way forward for the country.

The ability to adapt to change is the most crucial trait that a person, acompany or a nation that wants to excel in the 21st century can possess.And what is change if not creativity and innovation? Being innovativemeans improving on what is already in existence. Being innovative istherefore essential to gaining a competitive edge in every area of life.Innovation cannot be ignored.

In this collection of articles and speeches, Tan Sri Dato’ Professor Dr.Lim Kok Wing offers his frank and passionate views on the need forMalaysia and Malaysians to acquire new knowledge and a new attitudein order to compete on a field levelled by globalisation. For only bybeing innovative can we hope to move forward. Innovation is truly theheartbeat of a dynamic nation.

INTRODUCTION

PRIME MINISTER MALAYSIA

Malaysia is fortunate that it has among its citizens one who has shown great concern for its progress andits prosperity. Tan Sri Dato’ Sri Dr Limkokwing has long been an advocate for change through creativityand innovation. He has spoken extensively on the subject in seminars, conferences and workshops.He has also expressed his views in his blog as well as written about it in the various newspapers.There is no doubt that this is a Malaysian who is passionate about the nation moving forward.

I would like to commend Tan Sri Dato’ Sri Dr Lim for his dedication and outstanding leadership inpioneering creativity and innovation over the last 35 years. In pushing for change and progress he hastaken the concept of innovation to many countries where he has helped to build a strong reputationfor Malaysia.

This book documents his ideas on innovation. It has been a useful tool to many, especially those inthe Ministries who have made reference to it as a means to unravel the complexity of the subjectmatter. The essence of the book is the simplicity with which Tan Sri Lim has presented the idea ofinnovation and how it can lift the nation to new heights of achievement. I also take the opportunityto thank Tan Sri Lim for making this book available to the Ministry of Science, Technology andInnovation as part of its initiative to promote the concept of innovation to the rest of the country.

YAB Dato’ Sri Mohd. Najib Tun Abdul RazakPrime Minister Malaysia

Message from

THE MINISTER OF SCIENCE, TECHNOLOGY AND INNOVATION (MOSTI)I am pleased to be given the opportunity to pen a few words to mark the launching of “Innovation:Enabling Transformation’’ by the Limkokwing University.

Innovation is the source of wealth and prosperity. Innovation requires smart, focused people – drawnfrom the complete talent pool – challenging each other and understanding each other, to create somethingreally new. In an increasingly borderless world, to survive, indeed to thrive, one needs to be innovative.Innovation has become increasingly important in our society and all Malaysians should embraceinnovation as a way of life.

Continuous policy improvements and initiatives were put in place by the government to strengthen varioussectors in the light of the greater competitiveness and the integration of the world economy. The Ministry ofScience, Technology and Innovation (MOSTI) with strong support from other agencies is instrumental inharnessing science, technology and innovation as the key driver in raising the national capacity to acquireand utilise e-knowledge and to foster innovation.

I am confident that innovation will be the key driver for the Malaysian economy. An innovation-driveneconomy will enable the nation to further develop its science and technology sector, making it a force tobe reckoned with globally.

I would like to congratulate Limkokwing University for their tireless efforts in promoting innovation throughoutthe nation. YBhg. Tan Sri Limkokwing is indeed a model of a great innovator in creative education. Ipersonally believe that, with commitment and determination from everyone, Malaysia will be able to achieve itsVision 2020 status and merge as a nation of innovation and generator of world-class technologies and products.

Thank you and God bless.‘’ Championing Scientific Discovery, Transforming Innovation’’

Datuk Seri Dr. Maximus Johnity Ongkili, JP

Foreword from

Spearheaded by with Ministries and Innovation Partners

Acatalyst to rally Malaysians toembracecreativity and innovation

As Malaysia begins its re-invention of the national economy new directionsare sourced for exploration to safeguard sustainability. For the past 15 yearsTan Sri Dato’ Sri Dr Limkokwing has championed innovation as a vitalingredient for the nation to thrive in any crisis. The launch of MalaysiaInovatif 2010 is a clear indication of how the Malaysian Government hasembraced these twin propellers of progress in the 21st century.

The Limkokwing University is proud to be a strategic partner with theMinistry of Science, Technology and Innovation, the lead ministry for

the Malaysian Government drive to transform the nation.

Contents

Introduction 3

Innovation: the heartbeat of dynamic nation 10

Moving the nation’s innovation agenda forward 20

Let’s innovate Malaysia now 37

Building brand on what is true 47

Time to move on, and fast 55

We need our people to be creative, imaginative 51and innovative 59

We must focus on creating the right kind of 57human capital 67

Innovating the heartland - the root of Malaysia’s Transformation 73

Education must be inspiring in response 73to globalisation 83

Gold mine of eastern creativity and innovation 90

A creative people means a dynamic, 87innovative nation 95

We must succeed in building a quality 91image for Malaysia 99

We must become an innovative nation 107

Time for a national branding strategy 113

Move now from adaptation to innovation 119

Top tourist destinations also most innovative, 117most developed nations 125

An inspiring, motivating environment essential in education

Emerging new model for education 141

The creative process is systematic, logical and driven by knowledge

People and society: the heart of successful branding 158

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Winning hearts at home, winning battles abroad 165

Riding on the power of innovation 179

First Malaysia university to establish a 181‘global classroom’ in London 183

Fusion of Asia energy, African creativity and 191Western technology 193

Taking vision to transformation 201

Broadening the vision 217

Meeting global leadership challenges 228

Time to reinvent? 244

Wealth creation through creativity 259

Moving ahead with innovative thinking 272

Good design is good for business 284

We must change and think global 288

Creativity - Heartbeat of an innovative economy 298

Applying brand power for future growth 317

A new vision of education 324

A step to a more forgiving, more peaceful world 336

Media should give space to creative exploration 342

What does it take to be creative? 346

Stay connected or be disconnected 351

Creative destruction necessary to re-brand 356

Talent development being ignored 365

The digital generation 371

Developing more local heroes 376

Creating a two-way traffic in education 384

Driven by creativity, motivated by innovation 388

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The visual impact of Limkokwing University campus is designed to stimulate the mind to think differently.

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Fostering a mindset that is local but global. Students at the Limkokwing University acquiretechnological skills, creative thinking abilities without sacrificing their cultural traditions. Studentsfrom 145 countries study at the Kuala Lumpur campus.

Creativity and innovation are subjects of urgent concern at the highestlevel of the Malaysian Government. This was reflected by the conveningof the National Innovation Summit in April 2004, on the directive ofPrime Minister Dato’ Seri Abdullah Ahmad Badawi, who opened theevent. The Government has decided to make the conference an annualevent. A National Innovation Council, with the Prime Minister as thechairman, will also be formed to strengthen the national innovation systemacross all technology areas.

In line with the new push to promote creativity and innovation, a series ofarticles on the theme, Creative People, Innovative Nation, were published inthe business section of the New Sunday Times from February to April 2004.

Altogether, 10 articles were produced during this period. Another fivearticles were published from February to April 2006. They receivedprominent play in the newspaper.

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Innovation:The heartbeatof a dynamic nation

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Other articles were published in a number of Limkokwing publicationsto stress the importance of creativity and innovation. Also included inthis edition is a selection of speeches on the two topics.

The articles and speeches were meant to drive home the message thatMalaysians and Malaysian companies need to adopt more creative andinnovative ways to compete successfully in a globalising world. Theyaddress the fundamental deficiencies in the country’s innovation system,and suggest what must be done.

We need to improve our education system to produce people who arecreative, inventive and innovative.

We need companies to believe that innovation is the factor that willdrive productivity and quality; that will help them expand theirbusiness, increase their profitability and enhance their effort to buildmarkets all over the world. We need the Government to support andfacilitate the private sector to enable it to be competitive and gain accessto new markets.

We need to develop a country branding strategy that differentiates usfrom our competitors; that identifies us as a quality country; thatpositions us positively in the minds of people around the world.

These countries generate immense wealth from the products they havecreated, and the brands they have promoted right around the world.These countries produce goods that are perceived to be the best in the

world, everywhere in the world. Because they produce the best goodsthat the world wants, they become the most competitive, the mostsuccessful, the richest.

In the World Economic Forum 2003-2004 Global CompetitivenessReport, all the top 25 countries in the Business Competitiveness Indexrankings are highly developed economies. Finland leads the table,which includes the United States, Sweden, Denmark, Germany, Japan,Taiwan and South Korea. Malaysia is in 26th spot. Malaysians have theability to produce quality products that are desired around the world.

Our capabilities are proven by the number of international brands wehave created and our ranking as the 17th largest trading nation in theworld. But most of the products we make very well and sell very well donot originate from Malaysians.

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We need to inculcate a culture of innovation.

That is because innovation is the heartbeat of modern economies.That is the reason why the world’s most advanced nations are alsothe world’s most innovative. Their governments have builteconomic and social infrastructures that encourage creativity andinnovation. Their people are highly educated, highly skilled,highly competitive.

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Almost 90 per cent of our exports are goods produced by foreign-owned and operated companies in Malaysia, and they use technologydeveloped abroad by foreigners.

We have very little intellectual content, very little intellectual property.Research is very low. Malaysia is currently only ranked 24th in theworld on research and development spending as a share of GDP.

We have seven patents granted for every 1,000 R&D personnel, ascompared to Taiwan, South Korea and Japan which each have over 220patents per 1,000 R&D personnel. The tremendous gap in R&Dbetween Malaysian and foreign companies is underlined by theperformance of Japan’s Matsushita which files 15,000 applications forpatents registration annually.

Most companies in Malaysia view intellectual property merely as ameans of protection for their products. They don’t see the potential increating wealth out of IP. In comparison, around the world, 70 to 99percent of the market capitalisation of successful companies comes fromIP. That is not happening in Malaysia.

Instead, our people have been making their money from landedproperty and the stock market. The manufacturing base has largelycome from our people producing goods on OEM arrangement.

We are not looking at getting intellectual property or developing intellectualproperty that will earn us an income over and over again in country aftercountry. Unless we get serious about creativity and innovation, the trans-formation from manufacturing to innovation will not happen. And thattransformation must happen.

We must develop and produce Malaysian brands of world-class quality,able to penetrate international markets.We must export goods designedby us, using our own research findings, our own local components.

This will ensure that we keep moving up the value chain. It will alsoensure that we keep most of the wealth that we create within Malaysia andfor Malaysians.

Tan Sri Dato’ Sri Dr Lim Kok WingPresident • Limkokwing University of Creative Technology

President • Limkokwing Empowerment Centre for InnovationPresident • Malaysia Design Technology Centre

President • Malaysia Creativity & Innovation InstituteMember • National Innovation Council

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The huge wrap of the Limkokwing University campus gives opportunity for the “skin” to be shed every fewyears to be replaced with new, vibrant designs that reflect the philosophy of its Founder.

As participants in a globalised world economy, we are all familiar withthe challenges facing the nation. We know that as the world becomesmore competitive and more advanced, success and prosperity increasinglygo to those who add value in the global value chain. ‘Knowledge’ and‘know-how’ become the main drivers for economic growth. It is nolonger enough to be assemblers or expert practitioners of old methods,as we will surely be overtaken by those with cheaper labour. We need togo to the next level. We need to be developers of knowledge and expertpractitioners of more superior technologies.

Therefore, it is vital that we establish and move the nation’s innovationagenda forward. I am pleased to see representatives from variousinstitutions attending here today to participate in advancing the agenda.

The work to encourage innovation– namely, the process of developingideas through to commercialisation – requires the capabilities andsupport from a range of parties. My hope is that all of you will take this

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Moving the nation’sinnovation agenda forward

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opportunity today and tomorrow to raise the right issues and to bringconstructive input to the discussion. Looking at where we are today, itmay appear as if our future is relatively assured. According to the IMDWorld Competitiveness Report 2003, we are ranked as the fourth mostcompetitive economy against countries with a population size of over20 million. Nevertheless, according to the same report and based onother accounts, we do not perform well in areas related to science,technology and knowledge generation.

Malaysia is currently only ranked 24th in the world on R&D spendingas a share of GDP. We have seven patents granted for every 1,000R&D personnel, as compared to Taiwan, South Korea and Japanwhich each have over 220 patents per 1,000 R&D personnel. Thiscould well mean that, while we may be regarded as a success story now,we may not have the capacity in knowledge-generation or in scienceand technology to sustain our competitiveness into the future.

Malaysia is thus at risk of undergoing long-term stagnation in innovationand economic growth. We need to improve our capacity for innovationand knowledge-creation by addressing the fundamental deficiencies inthe country’s innovation system.

The first key issue to address relates to “focus”. Malaysia has beenpursuing a diverse portfolio of R&D areas, but we still have some way togo in terms of producing distinctive output. We have carried out R&D

efforts in semiconductor fabrication, telecommunications, aerospace andphotonics, among others, but the returns have not been very clear. As Ihave said before, we cannot afford to be a jack-of-all-trades and master ofnone. Of course, one could argue that results in science and technologytake time, but we do need to assess clinically and honestly whether weare spreading our resources too thin.

After all, we have to recognise that our resources are quite limited. As such,I believe we need to be more focused in our approach to innovation. Giventhe high capital requirements of some technologies, we cannot affordto invest in technologies that will not yield comparatively sizeable benefits.In this respect, our R&D portfolio has to be developed more strategically.Perhaps 70-80% of our efforts should be focussed on three or four prioritytechnology areas, and the rest of our efforts in other areas be allowed tocontinue merely to allow other ideas to bloom.

The three or four priority areas need to be selected based on our areasof competitive advantage. We should capitalise on our existing areas ofstrength, for example, in electrical and electronic manufacturing or incommodities, biotechnology and tropical medicine. We stand to reapgreat rewards from enhancing our capabilities in these so-called‘traditional’ sectors by utilising more technology and going into morevalue-adding activities.

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New economic sectorsOf course, there is still scope to explore new economic sectors, but Ibelieve that the greatest returns on our investment will be derived fromapplying technology to our areas of strength. Nowhere is this demon-strated more clearly than in the R&D efforts relating to palm oil. In lightof this, there needs to be an objective review of our country’s areas ofcompetitive advantage.

Following from this, we can ascertain which areas will benefit most byan investment in R&D and what types of research we want to pursue.Whatever the final priority areas may be, we must focus and review ourinnovation efforts through the strategic and social lenses of the nation.

Secondly, in order to enhance science and technology in the country, weneed to develop our pool of intellectual capital. Human resource is an areaof great concern to me. Much of the success of a society, of an economy,of a country, lies in the capabilities and talent of its people.

In a speech I delivered two days ago on my vision for the education system,I talked about the need to nurture and develop young people to reachtheir full potential, personally and in their careers. I talked about the needfor our education system to develop individuals who can think analytically,creatively and innovatively.

Industry-driven researchersThe curiosity, inquisitiveness and courage to experiment with new ideasand to develop them are in fact the very foundations upon which ascientific tradition can be built and strengthened in Malaysia.

Nevertheless, innovative and creative thinking alone will not do. We haveto develop more qualified, competent and industry-driven researchersamong all Malaysians. We must also continue to develop a competitiveand capable bumiputera scientific and technological community, able tostand against the best in the world.

There is much to be done in this regard. According to the same IMDWorld Competitiveness Report, Malaysia is ranked 17th in the world interms of the number of R&D personnel per capita. To raise our ratio toSouth Korea’s, we would need to develop an additional 60,000 R&Dpersonnel. As such, I look to universities and research centres to workcollaboratively with members of the industry to set up and execute aresearch and commercialisation agenda in the country. To support thiseffort, more PhD. programmes in science and technology, focussed oncommercial output, will have to be developed.

In addition, more incentives, financial or otherwise, will have to be givento researchers in areas with high commercialisation potential.While wewould like to fulfil our human capital requirements locally, the reality is

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that we cannot develop our local talent pool quickly enough to meet thedemands of industry. Malaysia will face a shortage of 35,000 skilledworkers in 2005, especially in critical fields such as information andcommunications technology (ICT), science and technology,manufacturing, finance and medicine. In order to bridge the talent gap,we must move rapidly to attract high-quality talent to the country, inareas such as research, design, engineering, sciences, medicine andeven management.

Much needs to be done to compete with other countries such as the US,Australia and Singapore which are equally hungry for foreign talent, andwho are aggressively marketing themselves with comprehensive incentivepackages. Malaysia needs to be equally aggressive, or more so, before welose out. Currently, Malaysia has some incentives in place to attract foreigntalent as well as Malaysians working abroad to relocate to Malaysia. Butour overall efforts at this “brain gain” has so far met with little success.

For example, I was told that as many as 30,000 Malaysians with tertiaryeducation are currently working in OECD countries. While it isencouraging to hear that Malaysians are excelling in competitive workenvironments overseas, it is also alarming that we are losing some of ourbest talent to other countries, particularly when the need at home is soacute. A concerted effort therefore needs to be made to entice Malaysiansabroad to return, or to tap their expertise in other ways. That said, we

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The Limkokwing University breaks the norm in education providing experiential learning through theincubation of in-house business units that are available for franchise.