Kuala Lumpur (May 4): policy research think tank Institute for Democracy and Economic Affairs (IDEAS) has urged the government to undertake further reforms to promote knowledge economy, which will be a key driver of global economic growth in the future.

Among the key recommendations are strengthening the role of universities, supporting small and medium enterprises, and creating a regulatory framework that encourages experimentation and favours innovation.

In addition, IDEAS also recommended that the government provide rewards and incentives for collaboration between innovators and local industry, as well as ensuring that the Malaysian education system produces high-skilled workers in scientific fields.

At the same time, IDEAS has also encouraged the government to place innovation at the centre of the strategic plan for all government agencies.

“Knowledge economy will be the key drivers of global, sustainable and equitable growth. To get there, strategic fiscal incentives by the government are important,” IDEAS acting chief executive officer Ali Salman said in a statement today, following the recent conclusion of its roundtable discussion entitled “Malaysia’s path to a Knowledge Economy – Lessons from Home and Abroad”.

“Policymakers, academicians, industry players, lawyers, and relevant stakeholders need to work very closely to fortify Malaysia’s intellectual property rights policies and enforcement,” Ali added.

Meanwhile, IDEAS said the roundtable discussion group agreed that the knowledge economy requires innovation and a robust framework for intellectual property (IP) rights as a part of its ecosystem.

“Intellectual property plays a crucial role in promoting innovation in the marketplace. Besides, IP plays a major role in enhancing the competitiveness of IP-concentrated industries,” added IDEAS’ Ali.

According to IDEAS, strengthening intellectual property rights will benefit the host countries by creating more innovators, increasing its gross domestic product per capita and encouraging foreign direct investments.

Citing the result of a US-based research, IDEAS said for every one-unit increase in patent rights, per-capita income increases by US$780.

“The experts noted that the Malaysian pharmaceutical industry is particularly important component of the knowledge economy, and is forecasted to grow at a rate of 4.4% from 2017 to 2022 reaching RM8 billion by 2022,” said IDEAS.

First published in The Edge Markets, May 04, 2018.