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Tiger Economies Under Threat
Table 7.1 R&D Spending as a Share of GDP, 1996–2006 Share of GDP (%) Country
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
China
0.57
0.64
0.65
0.76
0.90
0.95
1.07
1.13
1.23
1.33
1.42
Indonesia
0.16
0.16
0.09
0.09
0.09
0.09
0.09
0.04
0.01
—
—
Japan
2.82
2.89
3.02
3.04
3.05
3.13
3.18
3.2
3.18
3.33
3.40
Korea, Rep. of
2.42
2.48
2.34
2.25
2.39
2.59
2.53
2.63
2.85
2.98
3.23
Malaysia
0.22
—
0.39
—
0.50
—
0.69
—
0.63
—
0.95
Singapore
1.37
1.48
1.81
1.9
1.88
2.11
2.15
2.12
2.24
2.36
2.39
Thailand
0.12
0.1
—
0.26
0.25
0.26
0.24
0.26
0.25
—
—
Sources: World Bank World Development Indicators database. The data for Indonesia are from Association of Southeast Nations Science Technology Indicator/Technology Competitiveness Indicator project (ASEAN STI/TCI) (http://aseank.kisti.re.kr/). Note: — ⫽ not available.
intensive in more advanced economies. By the same token, the limited supply of researchers may itself reflect weak demand. Furthermore, R&D spending is spread relatively thinly across a number of technological disciplines.
R&D Spending Knowledge intensity is measured by a number of indicators, among which R&D spending has some primacy as it affects the supply of research skills from universities, the demand for scientists and engineers, and the potential output of patents. However, R&D spending is not a guarantee of commercially viable innovation, which can help raise growth in gross domestic product (GDP). R&D spending in Malaysia as a share of GDP has increased slowly over the years to reach 0.95 percent in 2006 (see table 7.1).3 Relative to other, more highly industrialized economies in East Asia, Malaysia’s aggregate outlay on R&D is lower, although it is comparable to that of Brazil and Mexico, which have similar levels of per capita income. In fact, Malaysia was squarely on the trend line estimated for a sample of comparators for 1996 to 2004 (see figure 7.1). Not surprisingly, R&D spending by China, Japan, the Republic of Korea, and Singapore is above the predicted line, especially that by Korea. The number of personnel engaged in R&D in Malaysia has risen at a slow pace since 1997. The number of people engaged in R&D in 2004 was 12,800 (see table 7.2), compared with, 51,500 in Indonesia (in 2001), 21,900 in Singapore, and 32,000 in Thailand. The number of researchers has tripled in Thailand in eight years while 3
The Second Science and Technology Policy (STEP2), launched in 2003, aims to increase R&D spending to 1.5 percent of GDP by 2010 (Shapira and others 2006).