ASEAN KEY DESTINATIONS
ASEAN should spend more on R&D to boost growth: ADB report
BRUNEI and other more advanced ASEAN economies need to increase their investments in research and development to become more competitive and raise per capita GDP.
“A modern, consumer-oriented economy requires innovation to improve product and process quality while lowering cost,” according to a recent Asian Development Bank (ADB) report ASEAN 2030: Toward a Borderless Economic Community.
The report said middle-income ASEAN economies spend only a fraction of their income on research and development.
Among ASEAN countries, only Singapore allocate a significant amount on R&D, spending on average 2.04 per cent of its GDP on R&D. Malaysia spent 0.50 per cent, Thailand 0.22 per cent, Vietnam 0.19 per cent and Brunei spent 0.02 per cent of its GDP on R&D.
In contrast, Japan spent 3.14 per cent of its GDP on research and development. South Korea had spent 2.77 per cent on R&D while China had spent 1.09 per cent.
The report said that based on the experiences of several countries, increasing R&D investment is a major prerequisite for climbing the per capita income ladder.
“ASEAN countries need to drastically increase R&D spending as they strive to become more competitive and innovative,” the report said.
The report said investing more on R&D will promote high-tech and institutional innovation, create a more favourable business environment by reducing regulation and easing market entry as well as deepen financial development to attract venture capital.
The report also proposed for the establishment of science institutes that will link corporate research with government related research. It also suggested that ASEAN economies need to attract highly skilled foreign workers in order to boost labour productivity. This can be done by offering them a high quality of life and a better working environment.
The report said ASEAN countries in general should allow more foreign technicians, scientists, and engineers to augment the limited domestic pool.
“Singapore, which uses a proactive policy to encourage foreign professionals to join its public and private sectors, can be a good example for other countries to follow,” said the report.
The report recommended promoting industrial clusters for advanced sectors as another way to foster innovation.
“But making clustering successful is not easy. It requires the right concentration of high-tech industries, a vibrant entrepreneurial and innovative culture, close links between industry and research facilities, the availability of venture capital, and a dynamic labor market for scientists and engineers,” the report said.--The Brunei Times
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