Academic calls for coordinated research funding, stronger university–industry partnerships and industrial upgrading to turn allocations into lasting economic gains
By TENGKU NOOR SHAMSIAH TENGKU ABDULLAH
KUALA LUMPUR, Oct 11 – Budget 2027’s success should be measured by whether Malaysia develops and owns more technology, strengthens domestic companies and creates sustainable, higher-value employment, rather than by funding allocations or technology adoption alone, Assoc. Prof. Dr. Zulkifly Abbas said.
Zulkifly, Associate Professor of Electrical and Electronics Engineering at the School of Artificial Intelligence and Robotics (SAIR), Xiamen University Malaysia (XMUM), said research, artificial intelligence, graduate employment and industrial upgrading must be addressed together.
“The four policy areas are interdependent,” he said in a written analysis of Budget 2027.
“R&D funding has limited economic impact without commercialisation capacity; AI adoption does not automatically create domestic technology ownership; wage benchmarks cannot substitute for productive engineering jobs; and foreign investment does not necessarily strengthen local technological capabilities.”
Prime Minister Datuk Seri Dr Anwar Ibrahim, who is also Finance Minister, tabled Budget 2027 in the Dewan Rakyat on Friday, Oct 9, outlining total resources of RM510 billion.
The package includes RM376.8 billion in federal operating expenditure and RM83 billion in development expenditure, alongside investments by government-linked investment companies, statutory bodies and other investment channels.
Against that backdrop, Zulkifly said implementation would determine whether the budget strengthened Malaysia’s technological and industrial capabilities.
RESEARCH NEEDS A PATH TO MARKET
On research and development, Zulkifly warned that funding spread across ministries and agencies could produce overlapping priorities and weak coordination.
University research, he said, may concentrate on publications and patents, while bringing technology to market requires further investment in prototypes, engineering validation, certification, manufacturing scale-up and market access.
“Not all research should be expected to generate immediate commercial returns,” he said.
He recommended a coordinated funding framework with clear responsibilities and measurable milestones, supported by staged financing from proof-of-concept to pilot production.
Priority areas should include AI, robotics, semiconductors, automation and advanced manufacturing, guided by industrial needs.
Stronger university–industry partnerships, shared testing facilities and experienced technology-transfer teams would help bridge the gap between research and commercial applications.
However, he cautioned against evaluating every project through short-term commercial results.
“Milestones should allow for legitimate technical failure and long-term basic research rather than favouring only projects with immediate commercial prospects.”
AI ADOPTION MUST BUILD LOCAL CAPABILITY
Zulkifly said AI subscriptions and digital training could improve productivity but might also reinforce dependence on foreign platforms if Malaysia’s domestic research and development remained weak.
Competitive AI development requires computing resources, reliable datasets, specialised talent, long-term financing and customers willing to test locally developed solutions.
Rather than attempting to compete across every part of the AI industry, Malaysia should concentrate on specialised applications linked to its existing industrial strengths.
“Malaysia need not develop every AI layer independently,” he said.
“Frontier general-purpose models may be prohibitively expensive; targeted applications and specialised technologies may be more realistic, although commercial success is not guaranteed.”
He identified semiconductor engineering, machine vision, robotics, embedded systems and manufacturing automation as areas for focused development.
Shared computing facilities, access to legally usable industrial datasets and commercial trials could help Malaysian developers build expertise and market opportunities.
WAGE FLOORS NEED BETTER JOBS
Zulkifly said a higher graduate wage benchmark could improve starting-pay expectations but could not independently generate skilled employment.
Some smaller companies may lack the productivity, revenue or margins to sustain higher salaries, while graduates could remain underemployed if the economy produced too few design, research and advanced engineering positions.
“A common benchmark may not reflect differences in qualifications, responsibilities, location and industry,” he said.
He recommended industrial placements, practical engineering training and continuous professional development alongside wage measures.
Targeted, time-limited support could encourage smaller companies to recruit graduates into substantive engineering roles, provided assistance was linked to additional employment, training and productivity gains.
He also urged policymakers to track employment quality, salary progression and how effectively graduates’ skills were used.
“Wage support needs careful targeting to avoid subsidising recruitment that would have occurred anyway,” he said.
INVESTMENT MUST STRENGTHEN DOMESTIC FIRMS
Malaysia’s established position in semiconductor assembly, testing and packaging provides a foundation for industrial upgrading, Zulkifly said.
Moving into integrated circuit design, advanced packaging, specialised equipment and proprietary technologies, however, requires substantial capital, specialised talent and long development cycles.
“Foreign investment does not automatically create technology transfer or strong domestic supplier linkages,” he said.
“Automation adoption alone may raise productivity without creating domestic technology ownership.”
He recommended linking appropriate investment incentives to verifiable local research, engineering employment, technology transfer and domestic supplier development.
Financing and access to advanced testing and manufacturing facilities would also help Malaysian technology companies qualify as suppliers and develop their own products.
While Malaysia could draw lessons from South Korea’s sustained investment in research and industrial capabilities, he cautioned that its model could not be replicated directly.
MEASURE OUTCOMES, NOT JUST ALLOCATIONS
Zulkifly said performance indicators must recognise the different timelines and risks involved in basic research, technology development and commercialisation.
“The central challenge is implementation: coordinated funding, realistic targets, stronger university–industry partnerships and transparent evaluation are needed,” he said.
“Ultimately, success should be measured by whether Malaysia develops and owns more technology, strengthens domestic firms, improves productivity and creates sustainable, higher-value employment.”
- TNS NEWS
Disclaimer: The views and opinions expressed in this article are solely those of Dr. Zulkifly Abbas and do not necessarily reflect the views or positions of Xiamen University Malaysia.