prakash chandran | president & ceo, siemens … 18, 2013 · prakash chandran | president &...
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The Rest of the World and Malaysia:
External Challenges to Malaysia’s
Growth
Prakash Chandran | President & CEO, Siemens Malaysia Sdn Bhd
2013-June-18
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Page 2 Prakash Chandran
External Challenges to Malaysia’s Growth
US Economic Situation “Tepid” recovery in the US economy - IMF
Eurozone Crisis Economy likely to shrink by 0.6%, not the forecasted 0.5% - ECB
China Slow growth continues. Fiscal revenue increase of only 0.27trillion yuan, YTD
2013-June-18
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Page 3 Prakash Chandran
Growth Levers
Technology Infrastructure
Political
stability Ethics
Economic policies
People-aided
accelerators
External
investors
Natural
resources City
development
Bilateral & regional
corporation
Competitive
value
addition
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Page 4 Prakash Chandran
To Rise Above the Challenge – 2 Key Themes
• invest in R&D
• ensure innovation Technology-driven growth
• to accelerate growth we need to compete in higher-value activities
Knowledge-based capital
2013-June-18
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Technology-driven growth:
Research and innovation complement each other
Research is transforming
money into knowledge
Innovation is transforming
knowledge into money
Consequences:
• Research is a necessary
though not sufficient
precondition for innovation
(Innovation is the invention plus
market success)
• Economic value is only created
by successful innovations
• Business strategy drives R&D
strategy
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Technology-driven growth:
Consistent innovation strategy
Innovation Strategy
Consistent with respect to:
Technology
strategy
Standards
strategy
Human
Capital
Development
R&D
resource
strategy
Patent
strategy Processes
• Focus on trendsetting technology
portfolios and achieve leading position
• Increase patents in trendsetting
technologies
• Effective R&D spending
• Full leverage of our capabilities and
assets to tap further potential
2013-June-18
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Research
Institutes
Technology-driven growth:
Networks are the breeding grounds for innovation
(“Open innovation”)
Start-up /
VCs
Competitors
Key
Customers
Technological
partners
Other
Industries
Think Tanks
Universities
MALAYSIA
2013-June-18
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What is knowledge-based capital
Computerised Information
• Software
• Database
Innovative Property
• Patents
• Copyrights
• Licenses
• Trademarks
Economic Competencies
• Brand equity
• Human capital
• People network
• Process knowledge
• Productivity / enterprise efficiency
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Knowledge-based capital:
Investment
In 2008, only 5 OECD countries (France, Germany, Japan, Korea & US) invested
heavily in R&D, amounting to 74% of the total OECD R&D spending
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Page 10 Prakash Chandran
• Facilitates entrepreneurial activity – essential to
encourage economic growth
• Skills shortfalls represent a bottleneck
• Increased sophistication of production processes in
many industries
• Need for new business process skills as a result of
major investments in ICT
• Process standardisation
• Productivity improvement
• Improvement in competitiveness
Knowledge-based capital:
Why it is important
2013-June-18
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Page 11 Prakash Chandran
• Good conditions for the financing of KBC-
intensive firms
• Bridge businesses and information sources –
benefits could be had from including all forms
of KBC
• Better measurements to gain a fuller
understanding of innovation, investment and
growth
• Harness existing international collaboration
opportunities
• Open market accessibility
Knowledge-based capital:
How to make it work
2013-June-18
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Page 12 Prakash Chandran
Thank you.