Law to Mandate Minimum 2% of GDP for R&D?

Malaysia is considering a bold legislative move to enhance its research and development (R&D) sector by proposing the Science, Technology and Innovation Act, which would mandate a minimum spending of 2% of gross domestic product in R&D said the Minister. He said this in parliament. Although the budget for his ministry has increased in recent years, more investment is needed, and legislation will help ensure this. 

Source: https://commons.wikimedia.org

  Most nations lack a legal framework to enforce R&D spending as a percentage of their GDP, countries like China and South Korea have set ambitious goals to boost R&D investment and drive innovation. China’s 13th Five-Year Plan, which concluded in 2020, targeted R&D expenditure to reach 2.5% of GDP. Meanwhile, South Korea has aimed to allocate at least 4% of its GDP to R&D. Malaysia’s investment in R&D has fluctuated significantly over the past years, with the gross expenditure on R&D last peaking at RM17.7 billion in 2016. As of 2020, Malaysia allocates barely 1% of its GDP to R&D, falling behind nations such as South Korea (4%), Taiwan (3.54%) and Singapore (2.2%). 

In a World Bank blog, William Maloney wrote that poor countries invest far less in R&D as a share of GDP. Middle income countries invest well under 0.5%, compared to 3% in advanced nations. 

It is not just the percentage (3%) but what is more important is that for effective R&D spending, it is the people that are needed to generate and employ knowledge. For Malaysia, we want STEM to flourish but constraints overwhelm opportunities. There is a need for an ecosystem, funding availability, research to commercialisation and a healthy, competitive environment for the next DeepSeek to arise or a new oil palm product to emerge. We do have government sponsored entities like RRI or PORIM, but to my mind they show very little tangible results – Why?

Reference:

Govt mulls law to mandate minimum 2% of GDP for R&D, FMT Reporters, 11 August 2024