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Research & Development (R&D)
Managing and promoting R&D investments is crucial for Malaysia’s journey towards becoming a knowledge-driven nation with inclusive growth. To reach the 12MP goal of 2.5% gross domestic expenditure on R&D (GERD) by 2025 (up from 1.44% in 2019), MIDA prioritise collaborations between private sector, academia, and government, streamline R&D facilitation, and enhance R&D commercialisation.
The National Policy on Science, Technology, and Innovation (NPSTI) 2021-2030 outlines strategies and plans to realise the country’s STI aspirations. This plan includes ten (10) Science, Technology, Innovation, and Economy (STIE) leap programmes designed to achieve the GERD goal of 3.5% by 2030.
Private sector involvement in funding and support is crucial for advancing R&D. Around 70% of R&D spending is anticipated to originate from venture capital, endowment funds, and international sources to drive lasting economic growth. As of 2020, the public-private R&D spending ratio stands at 35:65, with 40% of GERD dedicated to experimental development research.
The ultimate goal is R&D commercialisation, creating value and fostering global competitiveness by exporting innovative, competitive products.
The Government approved 99 projects in research, development, and innovation for RM5.6 billion in 2021-2022. The 12MP established a Research Management Unit (RMU) within the Prime Minister’s Department to monitor R&D quality. It ensures over 50% of R&D funds aid experimental development with commercial potential and verifies effective technology transfer from tax incentives to eligible companies.
Total Capital Investments
(2017-2022)
Approved Projects
(2017-2022)
High-tech Jobs Created
(2017-2022)
For more statistics, please click here.
6 University-linked companies
were awarded R&D Status (as at 2021)
Clients of R&D Status companies can enjoy double-deduction on R&D expenditure
This encourages collaboration and ensures projects are focusing on value-adding research outcomes and impact for industry partners to improve their innovation and competitiveness
Most Innovative Upper Middle-Income Economy
in the World
(Global Innovation Index 2022, World Intellectual Property Organisation, WIPO)
Most Innovative Country
among Asian Economies
(Global Innovation Index 2022,
World Intellectual Property Organisation, WIPO)
MIDA’s ongoing efforts to nurture the country’s R&D ecosystem have propelled Malaysia to the 36th rank in the Global Innovation Index (GII) 2022 report by WIPO. Among Asian economies, Malaysia is 6th out of 17, attributed to its strong tertiary education, sophisticated capital market, and thriving private sector. Notably excelling in high-tech and creative exports, Malaysia also secures the third spot among upper middle-income innovation economies.
Malaysia actively supports a wide array of industries in their R&D pursuits through incentives and financial aid that cover the innovation process from start to finish. These incentives include R&D Status, Contract R&D Company, R&D Company, and In-House R&D. MIDA, mandated by the government, drives R&D investment and collaboration, fostering partnerships between industry players, R&D institutions, and universities. This aligns with the triple helix model of innovation.
The outlook for 2023 R&D investments is positive, especially in the E&E sector, with semiconductors as common enablers for technology growth across industries. Malaysia’s E&E sector has outperformed global trends, evident in shipments surpassing global sales. The semiconductor industry plays a crucial role in various technological applications.
A R&D company is a company that provides R&D services in Malaysia to its related companies or to any other company.
100%
100% of the qualifying capital
expenditure incurred within ten
(10) years.
70%
The allowance can be offset
against 70% of statutory income
for each year of assessment.
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