The OECD Reviews of Innovation Policy offer a comprehensive assessment of the innovation
system of individual OECD countries and partner economies, focusing on the role of
government and concrete recommendations to boost innovation performance and R&D policies.
While Malaysia successfully transformed its economy from agriculture and mining towards
manufacturing and more recently services, it is currently facing an economic slowdown
and new competition. Mobilising new sources of growth will allow Malaysia to respond
to these challenges and re-energise its economy through innovation-driven productivity
Malaysia is one of Southeast Asia’s most dynamic economies and one of Asia’s great success stories. Its economic and social development over the last half century has been impressive. High economic performance, based on a profound transformation into a diversified economy, coupled with a striking reduction in poverty levels, has brought Malaysia closer to reaching its goal of becoming a high-income country by 2020.
To achieve this goal, Malaysia faces a number of challenges. While the economy has maintained resilient growth, productivity growth has slowed in recent years, and Malaysian firms are facing new competition from their East Asian peers.
Malaysia could seize immense opportunities by strengthening innovation and skills. This would allow firms to shift towards segments of the supply chain that support higher domestic value added and higher wages. Continued commitment to innovation policy is needed to support a broad-based upgrading towards more knowledge-intensive activities in services, manufacturing, and the primary and agro-food sectors. The Malaysian government is well aware of these opportunities and has already taken action in this area. The Review recommends further actions to help to build a well-performing innovation system which can effectively drive economic growth and social development.