ICT-BASED ADMINISTRATIVE INNOVATION AND ITS IMPACT ON R&D ACTIVITIES: A CASE OF THE MALAYSIAN PUBLIC SECTOR AND RESEARCH INSTITUTES

情報通信技術の活用による行政上のイノベーションが

研究開発活動に与える影響に関する研究

－ マレーシアにおける公的部門および研究機関を事例として －

February 2006

Graduate School of Global Information and Telecommunication Studies Waseda University

Economics and Social Impact Analysis of Telecommunication II

Md. Nor Hayati Bin Tahir

i

ABSTRACT

Information and communication technology (ICT) has an influence on Malaysian economic and technological development. Acting as a tool for the sharing of information, it allows information to be disseminated to every corner of the nation and it is used to address the needs of society. Benefiting from the externalities of ICT means that the information from the applications can be used as an input for economic and technological development. When social units are networked to each other, the sharing of information can lead to an indigenously self-sustained economy and the technological development of the nation. As ICT is part of life, this will bring about the achievement of a knowledge-based society and will lead to greater prosperity.

The first dimension of this dissertation examines the public sector that acts as

the nation’s facilitator and collaborator. The public sector plays an important role by providing innovative services that meet the needs of society as a whole. The capability of government officials to use the information from ICT will encourage ICT-based administrative innovation activity. The innovative and creative ideas devised as a result of using the information from ICT applications are a mark of the new innovative services introduced. Implementation of e-Procurement is an example of administrative innovation activity in the public sector. To understand the issues of innovation capability and the usage of information for administrative innovation activity, this dissertation has analyzed the managerial framework and the ICT usage framework. It focuses on how internal capital, external capital and decision-making affect the usage of information from ICT for innovative activities and how the innovation capability is influenced by the length of time of using ICT. The importance of introducing innovative services for the public is that the services will lead to the dissemination of information to the users.

The second dimension of this dissertation examines the research institutes,

namely the government research institutes (GRI) and private research institutes (PRI) in Malaysia. The dissemination of information as a result of using ICT applications leads researchers in research institutions to establish newly emerging products and processes. The usage of ICT for the purpose of acquiring information from the innovative administrative activities of the public sector will result in the diffusion of ICT. To investigate the level of diffusion, this dissertation has analyzed the framework of product innovation development processes. Within the framework, this dissertation focuses on investigating to what extent, the level of diffusion and purposes of using ICT

ii

applications are influenced by different types of research institute.

The two approaches of this dissertation use empirical methods in the form of three case studies. It is proven that managerial factors influence how government officials use information from ICT applications to introduce innovative services to the public. The public sector also demands input from the public to innovate existing services. The researchers in the research institutes are in the process of developing newly emerging products and processes, for which they acquire information from the ICT applications. This will lead to the diffusion of ICT. Diffusion is the result of using ICT applications for the purpose of acquiring information needed for product development during the research and development (R&D) activity in the research institutes. In this dissertation, Chapter 1 introduces the overall issues including the research objective and contribution, background, the research problem, research approach and an overall summary. Chapter 2 reviews the theoretical aspects and previous research related to the issues discussed in this research. Chapter 3 reviews the ICT and R&D profile and development in Malaysia that act as the motivation of this research. Chapter 4 explains the methodological aspects of this research, including the conceptual and operational frameworks, hypotheses and the method of analysis. Chapter 5 describes the relationship of the three case studies. Chapters 6, 7 and 8 consist of three case studies, each searching for the answer to the research problem. Chapter 6 investigates the managerial factors that influence the usage of information. Chapter 7 examines innovation capability and how the length of time of using the ICT applications influences the innovation capability of government officials. Chapter 8 investigates the level of diffusion of ICT applications and the purposes of using ICT applications in the GRI and PRI. Chapter 9 evaluates the overall research based on the three case studies in Chapters 6, 7 and 8. The findings are evaluated by comparing them with presently available data and also by looking at issues of policy. Lastly, Chapter 10 concludes the dissertation by summarizing the overall findings. Some proposals for future undertakings and a number of recommendations for policy and action plans are put forward, based on several limitations.

iii

ACKNOWLEDGEMENT

In the name of God, the most gracious and the most merciful. My gratitude and gratefulness go to the only God, who gave me courage, strength and a piece of mind to make this piece of work possible. I would like to express my deep appreciation to my mentor, Professor Hitoshi Mitomo for his patience, support, guidance, and encouragement mentally and morally. Without those, this work can never be completed. His magic words ‘GO FOR IT!’ that I will never forget. I also like to thank other members of the committees; Professor Kitamura, Professor Nakamura, Professor Higuchi, Professor Tajiri and Professor Okazaki for their valuable advice, comment and support for the improvement of this dissertation. Than, my gratitude is further extend to Mr. John Welford for his effort in editing this dissertation. To all friends who contribute constructively during the process and for the quality of this dissertation. To Dr. Zainal, Dr. Dean and Mr. Zaili who always be around when needed. I also wish to thank all the organizations for the support that make this process possible. My special thanks to Salome, Bella, Zetty and Lenny. I missed all the joy and owed the 3 years of your life that you deserved from me. Your love, understanding and incredible sacrifice is part of the success in pursuing this achievement. Also to the whole family back in Malaysia for the prayers, that keeps me going. Lastly, this dissertation is especially dedicated to my late mother and father, who did not live long enough to see their son’s success. Their last word of encouragement ‘TO LIVE BE TO LEARN’ will never fade as long as I live.

iv

LIST OF ACRONYMS AND ABBREVIATIONS

APITD National Plan of Action for Industrial Technological Development CAD Computer Aided Design CAM Computer Aided Manufacturing CIE Computers In Education DAGS Demonstrator Applications Grant Scheme DOS Department of Statistic Malaysia EPU Economic Planning Unit FDI Foreign Direct Investment Gb/s Gigabyte per Second GDP Gross Domestic Product GERD Gross Expenditure on R&D GERD/GDP Gross Expenditure on R&D over Gross Domestic Product GRI Government Research Institutes HRDS Human Resource Development Scheme ICT Information and Communication Technology IDC International Data Corporation IGS Industry Research and Development Grant Scheme IHL Institute of Higher Learning IRPA Intensification of Research in Priority Areas ITAF Industrial Technical Assistance Fund IT Information Technology K-economy Knowledge-based Economy MAMPU Malaysian Administrative Modernization and Management Planning

Unit MASTIC Malaysian Science and Technology Information Centre MCSL Malaysian Civil Service Link MDC Multimedia Development Corporation MGS MSC R&D Grant Scheme MiGHT Malaysian Industry Government Group for High Technology MIMOS Malaysian Institute of Microelectronic Systems MNC Multinational Company MOSTE Ministry of Science, Technology and Environment MPKSN National Council for Scientific Research and Development MSC Multimedia Super Corridor

v

MTDC Malaysian Technology Development Corporation MYNIC Malaysian Network Information Centre NEDO New Energy and Industrial Technology Development Organization NITA National Information Technology Agenda NITC National Information Technology Council NPO Non Profit Organization NTP National Telecommunications Policy PC Personal Computer P-economy Product-based Economy PRI Private Research Institutes R&D Research and Development TPM Technology Park Malaysia

vi

TABLE OF CONTENTS PAGE TITLE ABSTRACT i ACKNOWLEDGMENT iii LIST OF ACRONYMS AND ABBREVIATIONS iv TABLE OF CONTENTS vi LIST OF FIGURES x LIST OF TABLES xii CHAPTER: 1. Introduction

1.1 Research objective 1 1.2 Research contribution 2 1.3 Background 3 1.4 Research problem 7 1.5 Research approach 11 1.6 Overall summary 12 1.7 Summary of subsequent chapters 13

2. Literature review

2.1 Introduction 15 2.2 Information, knowledge and innovation 17 2.3 ICT and innovation 22 2.4 Sources of information 24

2.4.1 ICT applications as communication tools 25 2.5 Diffusion 25

vii

2.6 Collaboration in innovation and R&D activity 27 3. Background of ICT and R&D in Malaysia

3.1 Introduction 30 3.2 ICT policy and strategy for ICT as a sector

and as an enabler 30 3.2.1 Financial and non-financial incentives 33 3.2.2 Telecommunications 34 3.2.3 Human capability 35 3.2.4 Promoting entrepreneurship 37 3.2.5 Content and applications 37 3.2.6 Provision 38 3.2.7 Roles of ICT in Malaysia 38

3.3 R&D in Malaysia 43 3.3.1 Expenditure for R&D 47 3.3.2 Manpower for R&D 50 3.3.3 R&D output 53

3.4 Comparing ICT and R&D expenditure with R&D profiles 56

4. Research methodology 4.1 Introduction 60 4.2 Research design 61

4.2.1 Scope of the research 61 4.2.2 Research framework 63 4.2.3 Operational framework 67

4.3 Data collection and method of statistical analysis 69 4.3.1 Data collection 69 4.3.2 Statistical method for empirical analysis 70

4.4 Hypotheses 70 5. Description of case studies

5.1 Introduction 73 5.2 Description of Case Study 1 73 5.3 Description of Case Study 2 75 5.4 Description of Case Study 3 75 5.5 Sample and data collection for Case Study 1 and

viii

Case Study 2 76 5.5.1 Descriptive characteristics of Case Study 1 and Case Study 2 77

5.6 Sample and data collection for Case Study 3 79 5.6.1 Descriptive characteristics of Case Study 3 79 5.7 Conclusion 81

6. ICT that promotes administrative innovation activity in the Malaysian public sector 6.1 Introduction 82 6.2 Case Study 1: Managerial factors that influence administrative innovation activity 83 6.3 Measurement indicators and variables 84 6.4 Analysis and discussion 87 6.5 Conclusion 93

7. Influence of information and length of ICT usage on

innovation capability 7.1 Introduction 95 7.2 Measurement indicators and variables 96 7.3 Case Study 2: Influence of information on innovation capability 98

7.3.1 Multiple regression analysis 99 7.3.2 Discussion 101

7.4 Factor of the length of ICT usage that influences the enrichment of information 104 7.4.1 Methodology, measurement and indicators 104 7.4.2 Analysis and discussion 106

7.5 Conclusion 110

8. Usage of ICT applications in the Malaysian research institutes 8.1 Introduction 112 8.2 Role of ICT applications for the sharing of information 113 8.3 Methodology and measurement 115

8.3.1 Diffusion of ICT applications 115 8.3.2 Purposes of using ICT applications 117

ix

8.4 Case Study 3: Diffusion of ICT applications in the GRI and PRI 119 8.4.1 Influence of research institutes on diffusion 119 8.4.2 Influence of research institutes on

purposes of using ICT applications 121 8.5 Discussion 126 8.6 Conclusion 128

9. Research evaluation 9.1 Introduction 130 9.2 The result of testing the hypothesis 130 9.3 ICT that promotes the sharing of information 131 9.4 Intensifying local content and application 133 9.5 Diffusion of ICT for sharing information 135 9.6 Influence of ICT on structural reform in the public sector 136 9.7 Conclusion 138

10. Overall conclusion and recommendation 10.1 Introduction 139 10.2 Summary of overall research findings 139 10.3 Recommendations 142 10.4 Limitations of the research 144 10.5 Future research 145 10.6 Final remarks 146

APPENDICES Appendix I: Operation and technical definition 148 Appendix II: NITC five strategic thrust areas in Malaysia 150 Appendix III: Funding mechanism to supports R&D activity 154 Appendix IV: R&D incentives 156 Appendix V: Questionnaire for Case Study 1 and 2 157 Appendix VI: Questionnaire for Case Study 3 167

REFERENCES 178

LIST OF ACADEMIC ACHIEVEMENTS 188

x

LIST OF FIGURES

Figure Page 1.1 General framework of ICT usage 8 2.1 Linked Chain Model 21 3.1 Dual roles of ICT in Malaysia 39 3.2 National IT framework 40 3.3 R&D expenditure 48 3.4 GERD/GDP ratio of selected countries 50 3.5 Percentage of research personnel (headcount) 51 3.6 Number of publications by researchers in selected ASEAN countries (1998) 54 3.7 ICT-based services and R&D output 55 3.8 R&D output as compared with public agencies’ domain registrations for selected countries 55 3.9 Ratio of R&D expenditure per project 56 3.10 Ratio of ICT expenditure per project 57 4.1 Research framework 64 4.2 Operational framework 66 5.1 Geographical distribution of respondents 77 5.2 Level of usage of ICT applications according to academic level 79 6.1 Perceived contribution of internal capital 88 6.2 Perceived contribution of external capital 90 6.3 Perceived contribution of decision-making 92 7.1 Conceptual model of innovation capability 96 7.2 Model for mean analysis 105 7.3 Distribution of respondents according to length of ICT usage and working 106 7.4 Comparison of innovation capability 109 7.5 Percentage of respondents with a high level of effectiveness 110 8.1 Conceptual framework for diffusion 115 8.2 Model of analysis for diffusion 116 8.3 Model of analysis for purposes of using ICT applications 118 8.4 ICT usage in GRI for commercialization 126 8.5 ICT usage in PRI for commercialization 128

xi

9.1 Domain registrations in Malaysia 134 9.2 Personnel growth rate in the Malaysian public sector (2001 – 2003) 137

xii

LIST OF TABLES

Table Page 2.1 Transformation process of information to knowledge 18 3.1 National expenditure on ICT according to sector 31 3.2 National expenditure on ICT from 1990 to 2003 31 3.3 PC and Internet facilities in schools 36 3.4 Domain registrations in Malaysia 41 3.5 Public agencies’ domain registrations in selected countries 42 3.6 Profile of national R&D expenditure 1992 – 2002 48 3.7 Outsourcing by the private sector 49 3.8 Research personnel and researchers per 10,000 labors 51 3.9 R&D personnel (headcount) and nationality in 2000 51 3.10 Number of researchers (headcount) and nationality in 2000 52 3.11 Number of patents granted in Malaysia 53 3.12 Number of patents granted by United States Patent Office 53 5.1 Distribution according to gender 77 5.2 Distribution according to academic qualification and academic major 78 5.3 Distribution characteristics of respondents 80 6.1 Influence of internal capital 87 6.2 Influence of customer capital 89 6.3 Factors influencing decision-making 91 7.1 Result of the Two Ordered Multiple Regressions 99 7.2 Distribution of respondents according to frequency of ICT usage 101 7.3 Distribution of respondents according to literacy level 102 7.4 Perceived level of significance for job performance 102 7.5 Perceived level of significance for improving the working system 103 7.6 Perceived level of knowledge captured by experience 103 7.7 Perceived level of significance for skill creation 104 7.8 Contributor to usage of ICT according to working experience 107 7.9 Literacy level of respondents with 1 to 5 years of using ICT applications 107 7.10 Computation for innovation capability 108 8.1 Distribution of product types 119

xiii

8.2 Level of diffusion of ICT applications 120 8.3 Purposes of using ICT applications 122 8.4 Usage of electronic documents at the level of analytical design 123 8.5 R&D projects involving electronic documents 124 8.6 Factors motivating the initiation of R&D projects 125

1

CHAPTER 1 INTRODUCTION

Rapid developments in the information and communication technology (ICT) industries and the development of the ICT infrastructure in Malaysia should be seen as being relevant to Malaysian R&D and innovation activities. The public users, including researchers in the research institutes, should utilize the public sector’s new innovative services. Administrative innovation is the emergence of new services and procedures in the public sector that have an economic value contributed by government officials as the result of evolution, variation, disappearance, appearance, association, dissociation or formatting, and implemented by using ICT applications that are characterized by service optimization, efficiency gains, cost reductions and improved information. 1.1 Research objective

This study is an attempt to examine the roles of information, acquired from ICT usage in the workplace, to promote indigenous economic and technological development through ICT-based administrative innovation and R&D activity. The dynamic characteristics of the information gained from the usage of ICT applications may contribute to the sharing of information for administrative innovation in the public sector and R&D activities that result from ICT diffusion in the research institutes. More specifically, the objectives of this study are:

i. To examine issues that relate to the usage of ICT applications, including

managerial factors that influence usage of ICT by government officials to acquire information in activities involving administrative innovation.

ii. To examine how the period of time of using the ICT applications influences

the innovation capability of government officials at the workplace.

This chapter provides an overview of this dissertation, comprising the research objective and contribution, background, the research problem, research approach, an overall summary and a summary of subsequent chapters. An example of an ICT-based application is also given in the chapter.

2

iii. To investigate the diffusion of different types of ICT application in the government research institutes (GRI) and public research institutes (PRI), and the purpose of using ICT applications amongst the researchers in both kinds of research institute.

iv. To put forward sound suggestions to improve networking among the

researchers in GRI and PRI, so as to optimize the benefits from the information available from the ICT applications.

1.2 Research contribution

Zaitun, Mashkuri and Wood-Harper (2000), dealt with post-administrative innovation, examined factors initiating the implementation, obstacles to and success factors for the implementation of an integrated system in three public organizations. This research aims to examine and measure innovation capability in the public sector concerning information acquired from ICT applications that lead to administrative innovation activity, which is therefore a pre-administrative innovation approach. By using primary data from the users, this research tries to include the factors that influence the use of ICT. Specifically, managerial factors, and the length of time of using the ICT influencing innovation capability are major concern. Understanding the needs of government officials who are involved in the administrative innovation activity in the public sector is to the main issue in this research. The model for innovation capability can be applied as a basic guideline for the strategic planning of an organization in order to enhance the capability of its human resources, as an asset to the organization.

Another aspect of the approach is that individual data are used for investigate

the diffusion of ICT applications in the GRI and PRI throughout the innovation development phases. Past reports used the number of personal computers, main telephone lines in operation, cellular mobile telephone subscribers, television receivers, cable television subscribers and home satellite antennas as the measurement of diffusion of information (NITC, 2000; Paua, 2000). In this research, the perceived usage of the ICT at the individual level has been used for the measurement because R&D is an activity specific to personal who is capable to perform it. Applying the Linked Chain Model contributes to the understanding of the diffusion level of ICT applications in the research institutes.

By applying this method, diffusion of ICT applications can be diversified

3

according to the product developed throughout the innovation phases. As a result, the effectiveness of an ICT policy and implementation of an action plan can be seen directly in the research institutes considered in this research. The second reason is that the core activity of the GRI and PRI is R&D, a very specific activity involved in both products and processes.

1.3 Background The Malaysian economic and technological evolution started with the export of natural resources to the world’s industrialized economies. It contributed to the increase of the gross domestic product (GDP) from 5% during the 1980s to 1990 to approximately 8% during the period 1990 to 1995. Export-oriented manufactured products recorded 19% of the total exports in the 1980s, growing to 77% in 1995.

The rapid industrialization was brought about by the heavy influx of foreign direct investment (FDI) into the country. FDI increased from RM11.3 Billion in 2001 to RM13.0 Billion in 2004 (MIDA, 2005). Advanced technology was introduced through the investment in product manufacturing for global export. The technology enabled the base for the economic development to change from labor intensive manufacturing to capital intensive activities. Thus, an industrial base using high value technology for intensive production was created.

The technology that has been introduced by multinational companies (MNC)

has significantly contributed to the economic and technological development of Malaysia. MNC have enjoyed the supply of cheap labor, and enlightened policies and incentives have encouraged the investment. MNC have provided opportunities for the local participants, namely the government, the private sector and the industrialists to obtain information about advanced technologies. Malaysia has been able to gain information and experience for doing R&D. MNC can provide the technical know-how for R&D processes. Local participants that have been involved in MNC activities could start using advanced technology by themselves, to meet the need of local supporters to get more advantage of utilizing the advanced technology. Therefore, the influx of FDI through the activities of the MNC has contributed to the technological development and has led Malaysia to the present economic stability that it has now.

Jomo and Greg (1999) discussed the issue of the credibility of local

competitiveness when the country experiences sudden technology growth. Questions are

4

raised was whether industrialization was based on durable strengths or transitory factors, or on a product of local industry that would form the country’s competitiveness in the future. Continuous influx of FDI would diversify export industries but, with the introduction of advanced technologies, a negative effect as it will increase wages and erode the country’s competitiveness could also be introduced. The negative effect would divert investors to other countries and create a void in the development of technology. To prevent the creation of this void, the technological development of the country should only keep pace until the local participants could be capable of self-sustained development and indigenously fill the void that has been created.

Considering that, with the presence of globally known MNC, local companies

might minimize their participation in export industries. But in contrast, local companies could participate more actively in export markets if they get the same information on the markets as the MNC or can share the information and then act as local supporters of the MNC. It can be seen that the positive effects of the presence of MNC overcome the negative effects as long as the local participants are given the capability of sharing information and networking with the MNC or other external domains.

Rasiah (1996) revealed that foreign companies were involved in leading edge

products generally access home-site national innovation systems for their R&D. Development of most advanced technologies takes place in the home country and less of that activity is done in Malaysia, the host country. Foreign investment in Malaysia is undertaken after considerations of political stability and the comparative advantage of the cost of labor. Yamashita (1991) supports the argument that the motivations for Japanese firms investing in Malaysia are political stability and the low cost of labor. From this point of view, it seems that foreign companies are giving little attention to diffusing the advanced technology that has been brought into Malaysia as part of the investment. This means that local supporters, the small and medium sized industries that act as supporting industries to the MNC, have to take innovative action by themselves to grasp the technology opportunities available. The supporting industries have to intensify their links in design, management, production and marketing into an integrated system. Institutionalizing the network among the supporting industries is needed in order to share the information and create indigenous development.

In order to become an industrialized country as outlined in Vision 2020,

Malaysia must be able to self-sustain technological development and economic growth.

5

Rapid growth must be accompanied by the development of capabilities to acquire, adapt and improve technologies indigenously. Local participants must play an important role in nurturing these capabilities. The capability to capture information is needed in order to fully benefit from the presence of advanced technology from the MNC that would then be available to the local participants.

In 1990, the National Plan of Action for Industrial Technological Development

(APITD) was established to promote activities aimed at increasing R&D spending targeting at 1.5% of GDP in 1995 to 2% by the year 2000. Regrettably, the achievement of R&D expenditure in the year 2000 was only 0.5% of GDP. The reason for the slow progress in R&D activities is the shortage of qualified research personnel and limited physical facilities for R&D activities. In human resource terms, it was found that there is a shortage of qualified research personnel, especially in the non-agriculture research sector, to support the demand created by the research institutes. In the private sector, focusing on human resource development has had two negative impacts. First, the return on spending for training was found to be unprofitable when compared to the cost of spending on productivity improvements. Second, local small industries are at a disadvantage in the labor market in terms of wages since they are not competitive as compared to the MNC. As a result, they have difficulty in retaining trained and experienced technically skilled labor.

Realizing the fact that the government has to play an important role, soft

factors of ICT in R&D activities is stressed by the Economic Planning Unit (EPU) under the Prime Minister’s Department in Malaysia. The soft factors of ICT in R&D activities in the information age affect individuals, organizations and societies. ICT can affect individuals, organizations and societies to communicate, interact, perform business transactions, and learn. The fundamental soft factors of ICT in R&D activities are to: know where the information is, when to use the information, how to get the information which information is relevant, and why the information is needed. Thus, the innovation and R&D activities in Malaysia must be information-based.

Innovation is defined as any change affecting one or more terms of one or more

vectors of characteristics (technical, services or competences) which are brought about by a range of basic mechanisms: evolution or variation, disappearance, appearance, association, dissociation or formatting. They may be programs that are intentional or emerging as the fruit of natural learning mechanisms (unintentional) (Gallouj, 2002).

6

The Malaysian Administrative Modernization and Management Planning Unit (MAMPU) is a central agency under the Prime Minister’s Department entrusted with the task of introducing administrative reforms in the public sector in order to upgrade the quality, efficiency, effectiveness and integrity of Malaysian public services in accordance with national goals.

The private sector in Malaysia plays an important role in sustaining the

economy and technology, which is a primary driver of growth. Further intensifying the product-based economy will only increase the gap between Malaysia and the world’s advanced economies. The presence of ICT creates challenges for the Malaysian private sector in doing business. As a result, the private sector has to transform the economic development of Malaysia from a product-based economy (P-economy) to a knowledge-based economy (K-economy), since advanced economies perform in the K-economy. Information is the key factor in the K-economy to intensify R&D and innovation. With the presence of ICT, information can flow more freely between the participants, which could contribute to the further increase in their capabilities.

Researchers in the GRI, PRI and institutes of higher learning (IHL) are the

main actors in promoting technological development. For example, in order to produce a cutting-edge product and process to promote the nation’s development, the researcher needs information from all sources so as to improve the marketability of the product. This is where ICT plays a role of contributing to the effectiveness of the flow of information from the source to the researcher. The information that contributes to the development of technology can be acquired from various sources through various purposes of using ICT applications. Networking among researchers promotes the flow of information between peers. The information received by a researcher can be combined with the researcher’s own information so that both can contribute to the emergence of a new product or process. Networking among the researchers is one of the fundamental ways that create the dynamics of information that in turn can contribute to technological development.

The government is required to play a role as facilitator and collaborator for

other participants. The public sector, as the governing body for policies and incentives, must act in the same way as a catalyst prompting the private sector to spearhead the development of the K-economy. One of the focused areas for the public sector must be the development of human capital, involving capability, knowledge, skill and

7

experience in meeting the sophisticated approach and service that is demanded by the private sector. In addition, the public sector is required to fill the needs of the private sector and to play a vital role in performing administrative innovation activities to serve the public, also including policies, incentives and other product services supporting the private sector.

One example of such initiative taken by the public sector in giving innovative

services to the public is the implementation of e-Procurement, i.e., electronically purchasing via an electronic procurement application. It is one of the initiatives under the e-Government flagship of the Multimedia Super Corridor (MSC) of Malaysia.

e-Procurement is a RM270 million project including the installation of a nationwide network that will enable smaller sized suppliers to trade online with all Government procurement centres. The network will help suppliers to perform online transactions such as submitting registration applications, providing catalogue details or even getting connected to the Internet.

The infrastructure will be constructed in all state and district capitals, even near non-IT literate suppliers. In 2000, Phase I of the project, four government departments were involved with 5,000 registered suppliers. Analysis of user requirements is carried out where the system is being tested with application modules such as direct purchasing, requests for quotation and requests for tender.

State governments, statutory bodies and other government-related entities will use this innovative service in order to benefit from economies of scale, with the ultimate aim to increase domestic productivity and provide opportunities for exports. The network, when spread nationwide, will promote government-to-business (G2B) e-commerce. 1.4 Research problem

The general framework of ICT usage that involves the public sector and public users is illustrated in Figure 1.1. The public sector, comprising the central agencies, should utilize the ICT facilities to provide innovative products and services to serve the public users including, among others, the general public, organizations and institutions, and research institutes. The administrative innovation activities undertaken by government officials are intended to disseminate information by the usage of ICT

8

applications1. The information available from the innovative services, especially in the areas of policies, incentives, grants and funding mechanisms, could lead the research institutes towards R&D activity. Nevertheless, the public sector is not the only source of information for the research institutes, public users also have to disseminate and share information with the researchers in the research institutes, as the input for their R&D activities.

Figure 1.1: General framework of ICT usage

GRI together with PRI should initiate R&D activities appropriate for the desired development. Thus, R&D can contribute to the indigenous growth of economic and technological development. The increase in growth of the infrastructure of the ICT should contribute to the increased R&D activities.

Specifically, the problem can be explained in two respects: i. The public sector, as the governing body, should initiate the administrative

innovation activity to support the other participants who can initiate indigenous development. This dissertation focuses on whether the information acquired through the ICT applications can contribute to the capability of the public sector to innovate.

1 An example of services available by using ICT applications provided by the public

sector is the online submission of grant scheme applications (DAGS, 2004a).

Research Institutes

Public Sector

Public User

Public User

Public User Public User

Public User

9

ii. As regards the ICT-based administrative innovation and R&D activity, the sharing of information that is to be used by the receiver should be analyzed. In this matter, the mode of the sharing of the information should be investigated and understood so that it can be institutionalized.

From these scenarios, the ICT applications must be fully utilized by

government officials to complement what other participants are using. The ICT applications are used not only for the purpose of executing services, but also for generating by-products from the information available in the applications. From these facts, a fundamental question can be raised is:

• Whether the information available in the ICT applications can contribute to

the ICT-based administrative innovation in the public sector? It is argued that the high technology influx to Malaysia is countered by slow

innovation activity on the part of local participants. The failure is attributed to failures in networking and through not taking advantage of the knowledge spillover that comes from the advanced technology. The local participants fail to collaborate over the information about technology and do not promote R&D and innovation activities. By networking, information can be disseminated between participants for future use.

The public sector that governs the nation acts as a facilitator and a collaborator

for other participants and therefore must initiate administrative innovation in order to serve others. Innovative services are needed to satisfy the needs of the participants. Business players and industrialists need information from the public sector to support their activity. For these reasons, the public sector must come out with innovative services as needed by the business players and industrialists. In order to do this, the public sector needs the capability to innovate. To have a capability to innovate, the public sector needs information for its administrative innovation activity and this information can be acquired from the ICT applications used by the public sector. The fundamental issue that needs to be addressed is:

• Are government officials in Malaysia capable of acquiring the information

that is available from ICT applications and of using this information for administrative innovation activity?

10

Involvement of government officials in the administrative innovation is dependent on the innovation capability of government officials, where innovation capability is defined as the capability of government officials to perform an administrative innovation activity in the public sector as the result of using the information available from the ICT applications. From this, the other fundamental issue to be addressed is:

• What are the managerial factors that influence the innovation capability of

government officials to transform the information so that it can be used for administrative innovation?

Government intervention is needed to liberalize many sectors including finance,

banking, manufacturing, labor, education and telecommunications, in order to promote economic and technological development. Actions need to be taken to bring about innovative reactions by the public sector to comply with the needs of other participants in development. This will show that information has been gathered by the public sector and the relevant reformation is already taking place.

Innovation activity is a continuous learning process, implying that it is

important to discuss the issue of time in this context. Information that is acquired by government officials may also accumulate as they use ICT applications at the workplace. As a result, the capability of government officials to innovate may increase, as the length of time of using the ICT applications increases. The information available from the ICT applications used by government officials acts as an input for innovation activity as government officials use the applications in performing their public duties. The information they acquire should have some relationship to the innovation capabilities of government officials. From this, one fundamental issue that needs to be addressed is:

• How does the length of using the ICT applications at the workplace relate

to the innovation capabilities of government officials? ICT, when used as one of the tools for networking, may promote the sharing of

information between sectors. Networking between researchers may contribute to the intensification of information sharing that triggers innovation capability. Benefiting from networking implies that the network cannot be limited to an organization but must

11

link several organizations that can jointly contribute to the acquiring of unlimited information. The impact of using the ICT applications in the research institutes may result in the diffusion of the ICT. From this issue, the research problems that need to be addressed are:

• How does the level of diffusion of the ICT applications vary as between the

GRI and PRI? • What is the purpose of using ICT applications in the GRI and PRI? ICT development has demonstrated a positive growth rate and so have the

products of R&D activity in the research institutes. The development of ICT signals the intensification of ICT usage and contributes to the usage of the information from the ICT to be used in the R&D activity, which may result in diffusion in the research institutes.

In total, the research problems identified seek to understand the current

situation of usage and diffusion of ICT applications in Malaysia, so as to motivate the optimization of ICT facilities that are available in the organizations. 1.5 Research approach

The approach of this research aims to establish usage of ICT applications in the public sector and diffusion of ICT applications in the research institutes with the emphasis on examining:

i. The factors that influence innovation capability as the result of using the

ICT applications in the public sector. Further investigations are based on what is discovered.

ii. The diffusion of ICT applications that explains the sharing of information

between the users, in turn implies the presence of networks among the users. The measurement of the level of diffusion of the ICT applications at the point of diffusion is examined.

To establish the findings concerning the factors influencing the innovation

capability and the diffusion of the ICT applications, appropriate primary data are

12

analyzed statistically and empirically. Finally, from the evaluation made of the results of statistical and empirical analyses, policy implications and recommendations are put forward as a proposal to optimize the existence of ICT for the economic and technological development of Malaysia..

1.6 Overall summary Positive growth of ICT expenditure, in both the infra and infostructure, should be followed by the establishment of networks among the participants involved in development in Malaysia. Positive growth of R&D expenditure hints at the possibility of technological development growth, leading to economic development. These two major issues act as motivators for this research through two dimensions, namely the initiatives taken by the public sector and the implications for the research institutes.

The public sector should be innovative in providing services and information through the medium of ICT applications the ICT applications. To examine the initiatives taken by the public sector to provide better and more innovative services through the medium of ICT applications, the investigation considers administrative innovation activity in the public sector. Three factors are examined, namely managerial factors, innovation capability and the influence of the length of time of using ICT applications.

This research found that internal capital, external capital and decision-making

are the managerial factors that have influenced the involvement of government officials in administrative innovation activity. The innovation capability of government officials is influenced by the characteristics of using the ICT applications and the knowledge captured from using the ICT applications. Management style influences the decision-making for the new innovative services.

The innovative services provided by the public sector affect the research institutes, the GRI and PRI, as regards the sharing of information. The availability of information in the ICT applications permits the researchers in the research institutes to use the information for R&D activity. The impact of the usage of ICT applications by the researchers can be seen by examining the diffusion level of the ICT applications as measured by the Linked Chain Model of innovation development. It is found that the diffusion level of ICT applications varies depending on the research institute, which implies that the availability of information in the ICT

13

applications used by the researchers also varies. Other than the public sector, the general public also acts as an important source of information for initiating R&D activity in the research institutes. The networks established as a result of using ICT applications in the research institutes bring about the utilization of ICT facilities that are available for the sharing of information.

The findings from both dimensions imply that the public sector needs to intensify alternative services by using ICT, which will lead to the establishment of networks to encourage the sharing of information. The availability of information limits the diffusion, which implies the need to intensify local information, especially in the areas of technology and the commercialization of new products. 1.7 Summary of subsequent chapters

This dissertation consists of 10 chapters, summarized as follows: Chapter 2: Literature review This chapter reviews theoretical perspectives and previous studies pertaining to

the theme of this dissertation. These engage the issues of technological growth, transformation of information for innovation and R&D activity, innovation, networking and the sharing of information, and diffusion of ICT.

Chapter 3: Background of ICT and R&D in Malaysia This chapter reviews the present state of ICT and R&D in Malaysia. The

evolution and development of ICT in Malaysia are explained using historic data to support the motivation of this study. The chapter also reviews the R&D profile in Malaysia and the state of research in GRI and PRI.

Chapter 4: Research methodology This chapter explains the methodology adopted to analyze and address the

issues in this dissertation. It includes the conceptual framework, operational framework and the working hypothesis of the study.

Chapter 5: Description of case studies This chapter describes the relation of the three case studies presented in this

research. It also describes the sampling and data used for the analysis in each case study.

14

Chapter 6: ICT that promotes administrative innovation activity in the Malaysian public sector This chapter examines the managerial factors that influence the user, namely

government officials using ICT for the purpose of administrative innovation activity. The discussion is based on a case study that examines three managerial factors concerning customer capital, internal capital and decision-making. These managerial factors influence the user involved in administrative innovation as a result of using the ICT applications in the workplace. Chapter 7: Influence of information and length of ICT usage on

innovation capability This chapter also examines how the frequency of using the ICT and the length of time of using the ICT influence the innovation capability of the user. The discussion is based on a case study that examines the factors that contribute to the innovation capability of government officials at the workplace.

Chapter 8: Usage of ICT applications in the Malaysian research institutes This chapter examines the level of diffusion of ICT applications in GRI and

PRI. The discussion is based on a case study that examines the diffusion level measured by the innovation development processes. This chapter also examines the purposes of using ICT applications amongst the researchers in both types of research institute.

Chapter 9: Research evaluation This chapter evaluates the findings. Discussions and comparisons are made

between the findings and the present situation involving ICT, administrative innovation in the public sector and R&D activity development in Malaysia.

Chapter 10: Overall conclusion and recommendation This chapter summarizes the results of the analysis from chapters 6, 7 and 8

that are based on the case studies. Concluding remarks are based on the findings and recommendations are put forward for future research to be conducted.

15

CHAPTER 2 LITERATURE REVIEW

2.1 Introduction Technological competitiveness and investment activities have a direct impact

on economic growth. The Schumpeterian evolutionary approach states that the direct impact on economic growth is by virtue of product and process innovation and diffusion. This economic growth depends on specialized new technology in certain sectors of the economy. Specializations in the field of advanced technology also have a direct impact on economic growth because advanced technology has a pervasive and enveloping effect on different sectors of the economy. This technological competitiveness favors specialization, which allows entry into the fields of high technological opportunity, and this specialization induces higher rates of technical change. The competitiveness will also inspire demand for innovation and thus create the possibility of a virtuous circle of growth.

As in neoclassical theory, in considering a perfect competition where output and capital growth are at a steady rate, the increase in per capita income is explained only by exogenous technical progress. Growth is affected due to the imperfect market and the presence of the effect of trade.

Trade in products requiring high knowledge input for their manufacture can affect economic growth in a country (Meliciani, 2001). Three ways in which this can happen have been identified. The first effect is through the international exchange of ideas that can enlarge the stock of knowledge that can in turn reduce the input requirement for R&D in each country. Reducing the input requirement for R&D means that there is a reduction of capital costs in carrying out R&D. On aggregate, this

This chapter reviews theoretical approaches related to the issues of the application of ICT and diffusion, and R&D activity. Referring to literatures and previous studies, relationships between data, information, knowledge and innovation are intended to sustain economic and technological development. The Linked Chain Model, a structured innovation development process, is incorporated to examine the ICT diffusion, and to understand the relationship between information and R&D activity.

16

reduction of capital costs will contribute to the economic growth of a country. The second effect is that the integration of the product market between countries with the same rate of innovation avoids the duplication of research. The third effect is that the trade will result in the integrating of product markets between countries, even those with different rates of innovation. As a result of the integration, a country achieving rapid technical progress will increase its market share for innovative products and thus increase the incentive to promote innovation. In the long term, the trade affects the growth of the economy because of the increased return on the knowledge gained.

Growth in trade depends on the proportion of goods traded in two sectors,

namely highly technological products and traditional goods. The resource composition and R&D activity associated with the two categories are different, as R&D needs more input of human capital. The effect of trading these goods will depend on the level of spillovers. When knowledge becomes a national public good, country that are rich in human capital will experience growth at a faster rate. Hence, the importance of externalities in international trade has been identified.

There are endogenous factors that contribute to economic growth (Griliches,

1998). The first contribution by an endogenous factor is the new knowledge spread through training and the adoption of new technology. Secondly, there are new techniques where inputs and products are regarded as elements for improving the current technology, and thirdly there is the production of economically valuable new knowledge that influences future economic growth. Hence the effect of endogenous economic growth is technological spillover and the externalities of the knowledge that are embedded in the product will overcome the threat of diminishing returns.

When shifting from old to new technology it is important to configure the

advanced technology correctly. To handle the compatibility of the properties of old and new technology, innovation and R&D activities must complement each other. In an economy with a variety of objectives, concentrated research activities are less efficient because the result of each R&D products distributed with a relatively short production period. This forces firms to collaborate with others instead of integrating new activities themselves or doing purely in-house research (Dosi, 1988). In collaboration processes, ICT will play an important role in distributing the information and communication networks that can generate economies of scope and scale.

17

2.2 Information, knowledge and innovation Nonaka and Nishiguchi (2001a) defined knowledge as the interpreting of

information and accruing it in human long-term memory. It is the ability to apply certain information to certain tasks. Humans produce goods or services with certain economic values as a result of the application of knowledge. This economic value will contribute to the growth of the economy. Gisela (2003) defined knowledge as being aware of something or having information. From these definitions, an element of information is clearly of prime importance for the existence of knowledge for the creation of innovation. Romer (1986) stressed that knowledge spillover will maintain a constant return at firm level but at the aggregate level it will affect the endogenous growth. The growth is attributed to the low expenses on R&D contributed from the spillover and the externalities of the knowledge. The spillover is gained from the pools of generally accessible knowledge from innovations created by others. This can be achieved from both inter- and intra-industry networking. Griliches (1995) concludes that spillover comprises the sum of all the other firms’ R&D weighted by the measure of relatedness and has a powerful positive effect on a firm’s patent, R&D and total factor productivity.

Past innovative activities have increased the stock of knowledge that later exhibits a positive impact on the productivity of the innovative sector in the present. The innovations of others promote one’s own innovations. The share of product and process innovation develops positive effects, meaning that positive spillover outweighs negative displacement. This negative displacement is caused by increases in competition pressure as the result of spillover (Slomny, 2000). Hence, in innovation, knowledge is an investment analogous to capital investment in the production function. Knowledge and the spillover of knowledge promote endogenous economic growth. Knowledge is retained in the memories of those who work and the diversity of knowledge is therefore dependent on the diversity of the firm’s specialization (Ito, 2003).

As the knowledge gathered from the source is later used in the process of

creating innovation, the innovation produced will be related to the downstream activities. Applying those processes, the profitable innovation is not provided by upstream factors such as R&D but by downstream (applied) discoveries (Wan Latifah, 1999). To acquire knowledge from information, one must undergo a learning process. Metcalfe (1995) offers a guideline taxonomy of organizational learning, specifying the

18

learning that emerges from experience in the production of goods or services, learning that allows organizations to exploit extramural knowledge, and learning that is focused on internal problem-solving. The learning process will affect the innovative activity of the organization and contribute to technological change. Learning involves interaction with internal or external sources of knowledge and the receiver will accumulate the knowledge.

Knowledge can be defined as either tacit or explicit. Tacit knowledge is highly

personal and hard to formalize, making it difficult to communicate or share with others. It is subjective, may consist of intuitions and hunches, is difficult to verbalize, and is deeply rooted in individual actions and experiences, in ideals, values or embraced emotions. Explicit knowledge can be expressed in words and numbers, shared in the form of data, scientific formulae, specifications, manuals and the like. It can be readily transmitted between individuals formally and systematically.

Table 2.1: Transformation process of information to knowledge To tacit To explicit

From tacit Socialization Externalization

From explicit Internalization Combination

Source: Adopted from Nonaka and Nishiguchi (2001a) Knowledge creation, as described by Nonaka and Nishiguchi (2001a), happens

as the result of dynamic interactions between chaos and order, macro and micro, tacit and explicit, body and mind, emotion and logic, and action and cognition. It takes effect in four different modes, namely socialization, externalization, combination and internalization. Socialization is the process of converting new tacit knowledge into explicit knowledge through sharing experiences, interaction, spending time together, active interaction in the same environment and learning through hands-on experience. Externalization is the process of articulating the tacit knowledge as explicit knowledge in terms of crystallizing the knowledge and producing something concrete that can be appreciated by others. Combination is used in the process of collecting explicit knowledge from inside or outside the organization, for conversion to more complex and systematic explicit knowledge. The processes of exchanging and combining knowledge can be performed by way of media documents, meetings, conversations, using ICT applications and networking. Keys for dissemination of the explicit knowledge are communication, diffusion and systemization of knowledge. Internalization is the process

19

of embodying knowledge as tacit knowledge to be shared by others. The interactions of tacit and explicit knowledge are illustrated in Table 2.1.

Carvalho and Ferreira (2001) have introduced the concept of data, information

and knowledge. Information and knowledge can only make sense in relation to the cognition of the user. Data is transported through networks or by natural communication. Data is distinguished from information in that the latter only exists when the cognitive capacity of the receiver works on the data. As the information makes sense to the receiver it is converted into knowledge, which is embedded in human action in terms of rules, principles, mental models and memories. The information can be explained as taking one of three forms when it reaches the receiver. It may generate new knowledge in a receiver and add to his/her existing knowledge, it may just be temporary and create no new knowledge, or it may simply strike the receiver as noise. Information is still information, unless it is converted to knowledge when concepts, models, memories and sensations are added to it.

The innovation activities will lead to two types of innovation, namely process innovation and product innovation. Process innovation will contribute to the efficiency of labor and capital, and determine the quality of what is produced. Product innovation will affect demand for the product, thus determining the quantity that is produced. From this point of view, the argument is that the uncertainty can be resolved by the information gathered from the customer, who decides the level of demand for the product. As pointed out by Gallouj (2002), innovative products are co-produced by the product provider and the customer. Innovation on the part of a firm depends on another firm’s innovation that is passed on through positive spillover.

Innovation is an action of technical change to the production of goods and

services or the use of a method or input that is new to the producer (Hall, 1994). In Malaysia, it is an activity that has to be institutionalized under the National Innovation System. Elements involved in innovation include networking, research institutes, multinational companies, ideas, policies, tax incentives and funding, the activities that bring about technological change and the dynamic interactions amongst them.

Arora, Gambardella and Rullani (1997) identify innovation processes as two

factors, namely the production of modules and the combination of modules. Modules are basic knowledge components for basic product design. The combination of modules

20

aims to obtain a wider variety of applications that are more finely tailored to the needs of individual groups or users. These two segregated innovation processes come about as the result of different market demands. Innovation involves changes from an old system to a new system where the involvement of technology and the market are of prime importance (Olsson, 2003). Information is needed to make the changes in the old systems suit the needs of the market and thus to generate the growth of the economy.

In the innovation economy, five attributes must be stressed (Metcalfe, 1995).

First is the researcher or technologist where there are different individual imaginations and this will produce a variety of innovations across an organization. Researchers need to be sensitive to organizational and market needs and what has been planned by the organization. Second is the input and output when there is consideration of the uncertainty, and unforeseen and unintended consequences of innovation. If these factors are not considered, the product will be inappropriate to the market. Third, the innovation is meant to change the state of the art of the present product or process. Innovation redefines the possibility of the product for the next period of time. Fourth, innovation is not only technology specific but also organization specific. The product will depend on the innovation process that takes into account the organizational issues, the individuals involved and the way that their endeavors are organized and networked to other organizations. Fifth, when the organization is at the leading edge, its abilities will depend upon interaction with a wide range of knowledge-generating institutions that provide skills and information to enhance and guide internal innovation activities. These five attributes account for the innovation possibilities that are at the forefront of an organization.

Kline (1985) defined innovation in economics as the set of actions that leads to

the actual adoption in practice of a device, machine, process or system. The Linked Chain Model is based on 30 years of consulting in aircraft, automotive, paper, petroleum, power plant and other industries. The model consists of five pathways for innovation processes. It involves the process of market finding, invent and/or analytic design, detailed design and test, redesign and produce and distribute and market. On top of those stages, it involves knowledge and research. The elements of the model are shown in Figure 2.1.

The chain-of-innovation pathway frequently starts with market finding, where

an assessment is made to improve a given product or system in order to meet the needs

21

of an unfulfilled market. Knowledge comes between research and the chain-of-innovation because knowledge intermediates between the two. In the pathway of connections, reaching research through knowledge means that if there is any lack of knowledge at any of the five stages in the chain-of-innovation, one must refer to the stored knowledge, whether in literature or held by experts, in order to proceed with the innovation. Adequate knowledge gathered from the pool of knowledge will allow the innovation process to continue to the next step in the chain-of-innovation. If there is inadequate knowledge from the pool of knowledge, one can activate research activity, but this imposes high costs and takes time. The process of knowledge gathering from the pool of knowledge can be repeated at any stage within the chain-of innovation to the final stage of distribute and market.

Figure 2.1: Linked Chain Model

Research Knowledge

Market finding

Invent and/or

Analytic design

Detailed design and

Test

Redesign and

Produce

Distribute and

Market

Source: Adopted from Kline (1985) In the Linked Chain Model, the five underlying processes, from market finding

to the final stage of distribute and market, represent the structured innovation development stages. Communication between the different stages, including the knowledge and research activities, must be collaborated to ensure efficiency in an organization. As the process proceeds to the next stage, more knowledge is accumulated as the result of moving to a higher stage of innovation development.

Hall (1994) discusses the morality of the Linked Chain Model. In the model, most innovation is done with information that is already in the custody of the people in the organization. To a lesser extent, the people who are doing the work of innovation have other information readily accessible to them. It is only when these sources of information fall short of solving the problem that there is a need for research in order to complete a given innovation.

The Linked Chain Model explains the linkages between competences and

technology (Gallouj, 2002). Competences are symbolized by the use of information and

22

research systems transferred from customers for the exchange of information and ideas. Information will be tapped into when the innovator needs to find a new solution for a problem. The information is fed into the organization, among others means, by way of technological networking, R&D, technological monitoring, staff transfer, technology transfer or technological progress made by suppliers. Competences based on experience are divided into four genres. There is the competence to use theoretical information, competence arising out of the performance of the task, competence in establishing routines and organizational learning processes and competence in the management of information derived from the market.

Knowledge is about things, and this is an approach where knowledge can be

stored in remote databanks and IT systems in the form of information and digital documents. The information is in an explicit form that can be used by members of the network. Innovation is an interplay process comprising the conversion of information during the human quest for a new product, which is the origin of doing things (Nonaka and Nishiguchi, 2001a).

Hargadon (2002) outlined a 5-step process of organizational learning for

innovation. First is access, where a network perspective is important for diffusing the information between domains. The second step is bridging, this being the process of connecting to a domain where the innovator benefits by moving the resources from one group to another and these resources appear innovative to the receiving group. The third is learning the set of activities that individuals and groups in an organization engage in, to extend their ability to act within their environment. The fourth step is linking the activities of individuals and groups and leading them to recognize how past information can apply to the current situation, getting at least some of the right information to the right person at the right time. Fifth is building, this being the construction of the new network around new combinations of individuals in order to ensure success.

2.3 ICT and innovation

ICT-based innovation activity becomes independent and asynchronously induces goals that permit decentralization of information resources that focus on the market. The ICT applications that affect the permeable boundaries of the information sharing will cut the cycle-time of the innovative products (Quinn, Baruch and Zein, 2002). Sharing of information will increase the effect of externalities and the technological spillover. To internalize the effect, a technological mechanism has to be

23

adopted and one of the ways to do this is through ICT because of its dynamic character and capability varies over time. This has been stressed by Melliciani (2001) who, when studying the technology, trade and growths in OECD countries, came to the conclusion that ICT offers greater opportunities for different countries to exploit the new technologies in regard to different economic activities because of their high degree of pervasiveness.

Nobeoka and Baba (2001) noted that information is considered one of the key

factors in the management of new product development. Information from ICT applications is becoming more critical in the areas of design, engineering and manufacturing in product development. Information technology uses tools that support product development processes with organizational management positioned in the center. The key factors are communication and coordination where ICT can contribute to quality discussion and information exchange among project members.

Steinmuller (2002a) suggests three effects of ICT on the economy. The first is

where ICT allows productivity gains particularly during the processing, storage and exchange of information, which is fundamental in a k-economy. The second is that ICT favors the creation and growth of new industries such as multimedia, e-commerce and software. The third is that ICT promotes incentives for better exploitation of new possibilities in the distribution and dissemination of information, especially with the advent of the Internet, because of digitization of information. The K-economy is generated as an effect of the codification of the information in digital terms, which eases transmission and allows users to access and work upon the information at a distance, to interact and have large quantities of information available to them.

ICT can affect the enrichment of information. Information is enriched from a

variety of sources due to efficient access and communication networks. ICT allows for an electronic interaction framework for information sharing, and remote access for teamwork and organizing and coordinating tasks over a wider area. It enhances creative interaction between scholars, scientists, designers, suppliers and finally customers. It serves to facilitate collective work and learning in order to increase the speed of producing a new product. It allows for the exploration and analysis of the content of a vast database, which in itself is a means of knowledge enhancement. ICT facilitates huge amounts of information and allows for the rapid exchange of messages with an increasingly rich content. A combination of the above will develop a large-scale

24

distributed system for data gathering and the sharing of information through networking. Metcalfe (1995) defined networks as economic clubs acting to internalize the

problems of effective information transmission. The networks are substitutes both for the formal market and organizational integration. The networking phenomenon falls within the perimeter of non-market devices where firms seek co-ordination activities with other firms and knowledge-generating institutions. Firms in some industries have been observed to develop detailed networks of international alliances for sharing information and developing technology. From this interconnection, information is spilled over to affect others and compete in R&D intensive activities. Foray (2004) stressed two phenomena as the result of networking, that is the increase in the number of agents that are capable of producing, diffusing and absorbing knowledge; and a substantial decrease in marginal costs of dissemination of information and knowledge processing. The result is that networking has spawned a unique information instrument based on the dynamics of ICT. 2.4 Sources of information

The emergence of networking has changed the normal trend of innovation. The consumer interacts with other consumers to create value for new products and services. Finch (1999) categorizes customers into two categories. First is the customer in the upper stream, inputting information and becoming part of an organization’s innovation activity. The second category is the customer who is in the lower stream and plays the role of customer as buyer and user. In this framework, the participation of the customer in product development terms can be examined. The customer is the source of idea generation for product development. Customers create demand for new products and the challenge to the innovator is to capture clear information from the complex demands of the customer.

Campbell and Cooper (1999) point out that working together with the customer

will shorten the average time taken and reduce costs for a new product to be developed, because the first interaction with a customer could effectively be used to gather information, providing capabilities and other resources that the innovator lacks internally. This phenomenon will be further enhanced with the emergence of ICT where the links between innovators and customers have been greatly increased.

Dahan and Hauser (2002) stressed that the emergence of ICT will rapidly and economically incorporate innovators and customers in the product development system

25

by enhancing communication, conceptualization and implementation. Tzu and Jen (2004) summarized this by emphasizing a customer’s participation in establishing product concepts. It is realized that market-orientation is not just production-orientation, pushing products to customers, but it is also market-intelligence focused through numerous interactions and the obtaining of information from customers.

2.4.1 ICT applications as communication tools Carvalho and Ferreira (2001) stressed that ICT is used to accelerate the speed of knowledge creation and information transfer. ICT applications support information flow through the network. In their study, ten types of application that have the same common features are examined. The research based on a list of 26 software vendors that are involved in the study. They identified ten types of software that have common features to support information flow, and these are:

• Intranet-based systems, • Electronic document management (EDM), • Groupware, • Workflow, • Artificial intelligence-based systems, • Business intelligence (BI), • Knowledge map systems, • Innovation support tools, • Competitive intelligence tools and • Knowledge portals.

The ICT applications act as the communication channel for the flow of

information and contribute to the sharing of information amongst the users. Using the applications to acquire information from other users means that the network has been established. Nevertheless, to acquire information from the application, it must be diffused to the user. The diffusion of the application in turn results in the sharing of information where information is being accumulated and used in other activities. 2.5 Diffusion Rogers (1995) defined diffusion as the process by which an innovation is communicated through certain channels over time, among the members of a social system. The communication is concerned with ideas where participants create and share

26

information with one another in order to reach a mutual understanding. It is a process of convergence or divergence as two or more parties exchange information in order to move towards each other in finding a common meaning that they can give to a certain event. Innovation is benefited when it is diffused and adopted but even when this does not happen rapidly there are obvious and proven advantages. As argued by Stoneman (2001), diffusion involves uncertainty and information asymmetries. It also results in a different impact when the technology is adopted.

Rogers (1995) outlined four elements of diffusion, namely innovation, communication channel, time, and social system.

i. An innovation is an idea, practice or object that is perceived as new by an

individual or other unit. ‘New’ in this context refers not just to a short lapse of time but also to the reactions of the user, either favorable or unfavorable, based on perception of the innovation’s novelty. Newness may be expressed in terms of knowledge, persuasion or decision to adopt. How soon an innovation is adopted depends on the perceived attributes towards it.

ii. A communication channel is a process by which participants create ideas

and share them with one another in order to reach a mutual understanding. It involves the innovation, an adopter who has information about the innovation, another party who has no experience with the innovation, and the means to allow an information exchange in the form of media and interpersonal contact that may involve face-to-face interaction.

iii. Time is a dimension of the process by which an individual, having

information about the innovation, decides to adopt or reject it. The adopters are categorized as innovators, early adopters, early majority, late majority and laggards. The rate of adoption along the S-curve of diffusion describes the cumulative frequency of adopters over time. Critical mass occurs at the point at which enough individuals have adopted an innovation for the innovation’s further rate of adoption to become self-sustained. At this point, the adoption is interdependent on other adopters and interactive communication technology can expedite the diffusion.

27

iv. A social system is a set of interrelated units that are engaged in joint problem-solving to accomplish a common goal. This includes the interpersonal network linking system to ensure the reduction of uncertainty of adopting the innovation.

The rate of adoption of innovation depends on the perceived attributes of the

innovation. Rogers (1995) listed five perceived attributes of innovation. i. Relative advantage is the degree of individuals perceiving that the

innovation will bring more advantages than beforehand. The more advantageous, the more rapid its rate of adoption.

ii. Compatibility is the degree of innovation that is perceived as being

consistent with the existing values, past experience and needs of potential adopters. Incompatibility would imply that new value systems are being introduced and would result relatively slow adoption.

iii. Complexity is the degree to which the innovation is perceived as being

difficult to understand and use. iv. Trialability is the degree to which an innovation may be experimented with

in a limited basis by the adopter. v. Observability is the degree to which the results of an innovation are visible

to others. This encourages peers to discuss new ideas and evaluate the innovation.

2.6 Collaboration in innovation and R&D activity

The interconnection and networking among the participants need to be collaborative in order to exploit the economic value of the products and processes. The collaboration is through national technology systems or national innovation systems that allow the activities to be institutionalized. This will modify the behaviour of the participants and may result in the better management of the innovation process, thus enhancing efficiency and eliminating duplication. Non-duplication can be achieved through institutionalizing the programming of innovation and R&D activities. The program, together with all the available options, should be explored by the participants

28

to reveal greater technological opportunities and may lead to a more rapid reduction in uncertainty. Technological opportunity is defined as the potential for technological progress (Olsson, 2003). Networking in the institutionalized R&D and innovation programs will result in the participants joining together to share information so that the corresponding of ideas will stimulate creative innovation and R&D. Collaboration means not only the pooling of resources but also raising the productivity of the processes of innovation and R&D.

Monte and Link (2002) explain that the sources of external information in

collaboration come from customers, suppliers, cooperative research agreements (expensive), journals, patent databases and trade fairs (inexpensive). The internal sources of information come from production. Firms must develop innovative capabilities in-house, partly because of the sticky nature of knowledge (knowledge is not always freely transmissible), otherwise firms will buy-in all new technology. In further developing internal capabilities, the firm will simultaneously increase its capacity for absorbing external information. They further stress that the external sources are used for learning about the higher technology that is absent in the firm.

Collaboration on R&D and innovation will be as a result of government

intervention. The intervention is spelled out by way of rules and regulations, policies and incentives. Looking from the other viewpoint, it is a mechanism to internalize the externalities as a result of new technology production. The information can be shared among the participants by way of government intervention.

Tidd, Bessant and Pavitt (2002) elaborate the forms of collaboration as: i. Subcontracting the non-core activities for the purpose of saving costs since

they are passed on to another firm and will benefit from economies of scale. Issues of vertical relationships between industries are in the form of specialization and share of information.

ii. Technology licensing is in terms of exploiting the intellectual property

rights that involve royalties. The relative cost depends on the nature of the technology, markets, strategy and the capability of the firm. Licensing is used usually for reasons of fast access rather than cost considerations because information needs to be acquired quickly so that the firm can keep

29

pace with competitors.

iii. Research consortia are used where a number of organizations work together on a relatively well-specified project, pooling investment in a common research facility or new venture (as in Europe) and with well coordinated co-location in various member firms (as in the United States and Japan).

iv. A strategic alliance is an agreement between firms to co-develop new

technology or products. v. Joint Ventures are of two types, that is either by forming a new firm by a

combination of firms sharing stock, or on a contractual basis for collaboration.

vi. Innovation networking is used to overcome transaction costs, where the

purchasing of technology is involved. Networks between universities, suppliers, distributors, and competitors are established because of the mutual information sharing and social bonds created through repeated dealing that increases trust and reduces costs.

30

CHAPTER 3 Background of ICT and R&D in Malaysia

3.1 Introduction This chapter consists of two parts; the first describes the development of ICT in Malaysia including the evolution, policy, strategy and action plan. The second describes the R&D profile, the research institutes and the researchers in Malaysia. International comparisons have been made in some areas of the discussion. 3.2 ICT policy and strategy for ICT as a sector and as an enabler

ICT development and expenditure in the government sector has increased every year since the start of the ICT evolution in Malaysia. The increase in expenditure on ICT corresponds to the innovative development of ICT applications in the public sector. The government information and telecommunication evolution started in the period 1965 to 1985 with individual applications including personnel, accounting and payroll.

From 1985 to the early 1990s, with the establishment of a national data processing committee to promote wider application in the public sector, the expenditure on ICT increased and accounted for 12% of national ICT expenditure in 1990, as shown in Table 3.1.

The widening of the applications involved local government, mapping, project management, meteorology, immigration and customs. The integration of the public

This chapter explains the ICT and R&D policy in Malaysia. The approach of the discussion is to look at the policy especially from the viewpoint of the funding and incentives structure, and initiatives taken by the government. The ICT policy aims to transform Malaysia into a value-based knowledge society by the year 2020 with a dual-purpose strategy: ICT as an enabler and ICT as a sector for economic and technological development. The R&D activity in Malaysia, one of the strategies in the National Science and Technology Policy, aims to address problems or perceived opportunities related to economic and technological development. To address the issues, government intervention has taken place especially in the areas of funding and incentives mechanism. International comparisons are made in several focus areas discussed in this chapter.

31

service network started in 1991 and the services evolved to link the civil service’s aim to deliver those public sector services intended to be used by the private sector. As a result, the expenditure on ICT in 1995 increased by more than double compared to 1990, as shown in Table 3.2.

Table 3.1: National expenditure on ICT according to sector AMOUNT (RM million)

SECTOR 1990 % 1995 % 2000 % 1996-

2000 %

Banking and Finance 507 39.0 1,026 27.2 827 14.0 3,723 15

Manufacturing 78 6.0 494 13.1 1,182 20.0 4,041 16.3Government 156 12.0 380 10.1 532 9.0 2,062 8.3 Telecommunication - - 473 8.0 2,323 9.3 Oil and Gas 234 18.0 380 10.1 296 5.0 1,623 7 Utilities 39 3.0 266 7.0 236 4.0 1,253 5.0 Professional ICT and Services n.a. n.a. 125 3.3 236 4.0 236 1.0

Education and Research 52 4.0 114 3.0 236 4.0 1,008 4.0

Others 234 18.0 988 26.2 1,891 32.0 8,632 34.6Total 1,300 100.0 3,773 100.0 5,905 100.0 24,901 100.0

Source: Association of Computer Industry Malaysia PIKOM and Shafie (2001)

Comprehensive policies are being developed to encourage ICT usage in various

sectors of the economy and to accelerate the growth of the ICT sector. ICT policy in Malaysia is based on leveraging ICT for national development and global positioning. "Vision 2020" has a target for Malaysia to be a fully developed knowledge-rich nation through the development of the ICT sector and to use ICT as a contributor towards better global competitiveness.

Table 3.2: National expenditure on ICT from 1990 to 2003 Year 1990 1995 1998 2000 2001 2002 2003 RM million 1,300 3,773 4,840 5,905 6,501 6,512 7,863

Source: Various sources The increase in expenditure should be complemented by an increase in the

32

dissemination of information among the users. Without the sharing of information, the ICT infrastructure will only serve users individually and the users themselves will hold the information, which is in the form of a cluster. To study the dissemination of the information, it is important to understand whether the user is using the information, especially in the public sector that acts as the facilitator and collaborator for the other participants in economic and technological development.

The ICT policies play dual roles in moving Malaysia towards being a knowledge society and a knowledge-based economy. These are firstly ICT as a new sector of economic growth, and secondly ICT as a social enabler. The non-linear development, because of the interaction between the economy and society, will shift the nation towards values-based knowledge that will contribute to the achievement of the nation’s vision. The establishment of a high quality ICT infrastructure will contribute to the promotion of economic and technological growth initiated by the establishment of the Multimedia Super Corridor (MSC). The establishment of the Multimedia Development Corporation (MDC) in 1996 aimed to promote the MSC, the ICT hub of Malaysia and the region. It also promotes the new economic sector, which is underlined by the ICT policy. Production technology present in the MSC will increase competitiveness locally and globally and will further generate the private sector as the primary engine of economic growth. To coordinate public, private and community sectors, the National Information Technology Agenda (NITA) was established as a major strategy for national development. NITA was launched in December 1996 by the National IT Council (NITC) to provide the foundation and framework for the utilization of ICT, aimed at transforming Malaysia into a developed nation. The establishment of NITA targets social development and plays a role as an enabler towards a values-based knowledge society, and supports economic development in the era of the K- economy.

ICT policy in Malaysia is giving attention to areas that are believed can transform the economy from a P-economy to the K-economy. The areas are:

i. Liberalization of trade and investment through the trade and investment

policies. ii. Liberalization of telecommunications and infrastructure. iii. Policies on human resources and the education system. iv. Fostering local entrepreneurship and business activities. v. Creating local content and applications relevant to the user.

33

vi. Legal provision. The public service plays an important role in assisting the public by adopting

ICT in its administration and services (KEMP, 2002). The public service, as an early adopter of ICT with RM 2.6 billion spent on ICT during the Seventh Malaysia Plan (1996 to 2000), is putting effort into fully exploiting the benefits of ICT in order to raise quality and productivity through the introduction of the e-Government initiative. The knowledge environment is being created with the establishment of the Malaysian Civil Service Link (MCSL) as a gateway to the home pages of government agencies. As a result, focus is being given to initiatives in the ICT domain for the dissemination of services using ICT. 3.2.1 Financial and non-financial incentives

The establishment of the MSC was intended to create a high-tech environment and infrastructure that can attract national and international investors and create spillover effects in the rest of the Malaysian economy. To create an attractive environment, the Malaysian government has also defined policies to encourage foreign investment. Incentives are given, financial and non-financial, on tariffs and to promote local and foreign investment. Financial incentives include zero income tax for a period of 10 years, R&D grants, and a 100 percent investment tax allowance on new investment in the MSC. Non-financial incentives include unrestricted employment of foreign knowledge workers, no restrictions on global capital, and limited restrictions on ownership.

A grant scheme has also been established as an initiative for realizing the NITA.

The Demonstrator Applications Grant Scheme (DAGS) was launched on 21 April 1998 with the aim of facilitating social and economic progress through utilization and innovative2 use of ICT. Up to the end of 2004, RM100 million had been allocated for the scheme. DAGS objectives are to acclimatize Malaysians to ICT and to maximize the benefit of ICT applications at work and at home, by building the integrated network for communities using ICT and multimedia technology, promoting web-adapters, developing electronic network-enabled entrepreneurs, enhancing cooperation and collaboration between sectors and organizations, and encouraging Malaysians to be more innovative by adopting ICT and multimedia technologies (DAGS, 2003). It

2 DAGS as of June 2004 totalled 75 projects where the private sector contributed 43%,

NGO 20% and the public sector 37%. (DAGS, 2004b)

34

provides funds for citizens to access the opportunities associated with the MSC and to be involved in multimedia development. Three strategic priorities were identified, namely social digital inclusion that focuses on life-changing ICT solutions that address the target group of marginalized communities, women and youth; economic competitiveness that works to encourage firms in electrical and electronic manufacturing, the food cluster in agriculture and the financial services cluster, to adopt ICT in order to innovate new methods and systems; and modifying processes to gain and sustain economic competitiveness in the global arena.

The strategic priorities identified clearly show that intensification of the

contents and applications should be developed to suit the needs of the public. In order to promote economic and technological development, the central agencies must initiate the development of content in the area of services that can support the dissemination of information that is needed by the public. To understand the issues, a study is undertaken to investigate whether government officials are capable of initiating administrative innovation activity by using the information from the ICT applications as in Chapter 7 of this dissertation. The development of the content and applications can be realized with the support of financial and non-financial incentives either to the public sector or the private sector.

3.2.2 Telecommunications

A concerted effort has been made to deregulate the telecommunications industry. With the privatization of the government’s telecommunications department in 1987, and the establishment of the National Telecommunications Policy (NTP) in 1994, the market has now been fully liberalized. Deregulation has also taken place in the computer and software markets, although there are restrictions on participation in government bids and equity requirements for setting up manufacturing facilities by foreigners. This will encourage the activity of joint ventures and distributorships involving local companies. The process of deregulation is continuing especially where regulation discourages productivity. The objective of macro level telecommunications policy is to have national unity and integration by encouraging interaction through the use of telecommunications facilities and services. The dissemination and expansion of information technology will produce a society capable of contributing towards the development of new technology for the nation’s economic and industrial growth. In turn, it will enhance the growth of telecommunications technology in all sectors and promote ICT as an emerging sector.

35

Malaysia has invested heavily in world-class infrastructure. In 2003, spending by Malaysia's telecommunications carriers stood at RM4 billion. Telecommunications network equipment made up 84% of total carrier spending, while the remaining 16% was on IT equipment including hardware, software, and services (IDC, 2004). The high-speed link network operating at 10 Gb/s is designed to create an ideal environment for ICT-related production. The infrastructure also acts as the backbone supporting extensive public administration, education and business applications. The aim of the superhighway is to provide quality access to global information as quickly and easily as possible.

Broadband infrastructure was introduced in the year 2002 to support the

delivery of information. To spur the growth in demand for broadband, several programs had been planned. In 2006, the Ministry of Energy, Water and Communications are expecting to install 84,000 broadband connections in government departments at federal, state and local level. Research institutions and public universities will be provided with 74,000 broadband connections to enable them to gain access and collaborate with R&D institutions throughout the country and around the globe. At the end of 2006, more than 1,700 broadband connections will be provided to the 800 libraries in the country to increase access to information. Broadband is also adequate for supporting further rollouts in the private sector as well as benefiting improved telecommunications facilities.

Widely used, broadband could contribute to the rapid dissemination of

information. The infrastructure will promote the usage of the information available in the ICT applications to be used by the public, in turn contributing to the sharing of information amongst the participants of economic and technological development.

3.2.3 Human capability

The deficit in skilled labour, especially in the ICT and manufacturing sectors, has required Malaysia to focus on the area of human capability. Improving the quality of manpower in the R&D sector should be on the agenda for increasing R&D activity in Malaysia (Mani, 2000). To address the issue, the government is investing in a high-quality, comprehensive education system designed to meet the demand. The Computers In Education (CIE) Program has been introduced, providing personal computers (PC) as shown in Table 3.3. A total of 2400 computer laboratories have been built at primary and secondary schools to educate society for the future. Selected teachers are trained

36

and retrained to conduct CIE courses. Computer Aided Design and Computer Aided Manufacturing (CAD and CAM) courses are being taught in secondary technical schools. At university level, new skills such as information and knowledge management, as well as programming applications, have been incorporated into the education and training curriculum.

Table 3.3: PC and Internet facilities in schools

School level No. of Schools in Malaysia

Schools with PC

Schools with the Internet

Primary 7217 2202 739 Secondary 1641 883 559 TOTAL 8858 3085 1298

Source: International Telecommunication Union (2002)

The introduction of curriculums that involve the use of computers and ICT is aimed at producing a better skilled labour force that is capable of networking and using the applications for gaining information. The introduction at an early stage, at the primary school level, can reduce the gap of the digital divide among public users and contribute to the diffusion of ICT. As a result, a vast network can be established at the national level that can contribute to the sharing of information for the encouragement of indigenous economic and technological development. The issue of capability is still uncertain, because the effect of the introduction of the curriculums in the educational system is yet to contribute to countering the deficit in the labor supply. Nevertheless, the need to share information among the people who are working towards development is of great importance if the country is going to be able to compete in the global market. In Malaysia, the private sector and the industrialists depend to a great extent on information from the public sector in order to be competitive in the market. As a result, the capability of government officials is crucial, as an assurance that the public sector can contribute information to the other participants. To achieve the level where the public sector is acting as a source of information, government officials must be innovative in introducing new services that can comply with the demands of the participants. To meet this level of achievement depends a lot on the innovation capabilities of government officials.

37

3.2.4 Promoting entrepreneurship Incentives are designed to promote entrepreneurship and efficiency in the new

investment sector. These incentives could encourage the emergence of enterprises that can compete globally, having the edge in price, quality, delivery and costs. One of the effects of the strategies is a record of 60% of the total national exports in 2001 being ICT products, with the small and medium industries playing a vital role in supporting the achievement of the MNC. Activities that can contribute to the emergence of ICT as a sector include the production of hardware and software in the ICT sector. These activities will complement the availability of the information that can be accessed by the public. The introduction of local applications that contain local information and content will promote entrepreneurship. 3.2.5 Content and applications

Intensive efforts being made by the public and private sectors to develop local content and applications are aimed at providing the public users with information. Traditionally, local content is defined as content that is relevant for people in a certain locality, or content for people speaking a particular language or being from a certain culture. It is the expression of the locally owned and adapted knowledge of a community defined by its location, culture, language, or area of interest (Ballantyne, 2002). In the framework of this dissertation, local content is the locally owned and developed content for which ICT applications are used to disseminate it locally, it being information that is relevant to the interests of the local community in the areas of culture, language, services, technology and other areas of interest.

The seven flagships of the MSC demand the intensified emergence of new

local content and applications to promote accessibility by the user. The seven flagships are: e-Government, multipurpose cards, smart schools, telemedicine, R&D clusters, borderless marketing and worldwide manufacturing webs. Portals have been developed to enable the user to share new information and obtain consultation and training. These will increase the administrative efficiency of the public and private sectors for the benefit of the user. Electronic initiative applications are being strategically developed to help provide Malaysians with more efficient means of sharing information both locally and globally. They are: e-Economy, e-Public Services, e-Community, e-Learning and e-Sovereignty. Each of the electronic applications sectors is explained in Appendix II.

38

The development of local content and applications can also promote the growth of entrepreneurship and the emergence of ICT as the new sector of economic growth. Development of local content could complement the work of participants in development, and the public, through their use of the ICT. This can be realized because of the growth of applications that cater for local information and the needs of the local user.

The availability of the information will result in more information being shared

by the participants in economic and technological development, including the research institutes. The availability of the information will contribute to the intensification of the R&D activity and will result in the emergence of new products and processes. From the demand side, the intensification of local content can promote sharing of more information by all sectors involved in the development and the public in general. From the supply side, the intensification of the local content will increase the dissemination of information that is supported by the technology. The users of the service will be forced to use the technology and, in turn, will be able to gather more information. The effect of the use of the technology is its further diffusion.

3.2.6 Provision

Alongside the establishment of the new ICT scenario, and with the presence of MSC-status companies, the government also provides a comprehensive regulatory framework of intellectual property protection and cyber law to facilitate the ICT environment. Bills of Guarantee have been provided under the cyber law. Some examples are: The Digital Signature Act 1997, The Communications and Multimedia Act 1998, The Copyright (Amendment) Act 1997, The Computer Crimes Act 1997 and The Telemedicine Act 1997. 3.2.7 Roles of ICT in Malaysia

Strategically, ICT plays two roles in transforming Malaysian society. ICT plays the role of a new sector and is also an enabler within society. Economically, ICT is emerging as a new sector involving the use of information as a commodity within industry. As the available information is shared, it is used in the new business scenario and creates valuable knowledge that in turn contributes to the emergence of new products, goods, services and processes. This will shift the idea of doing business from a conservative style to a new competitive knowledge-based economy.

39

Socially, with the availability of the infra and infostructure, society is able to access information in the new way of life3 and business environment4. In time, the knowledge-based society will be inculcated with the life-long learning and innovation culture. Socially, the goal of society is that people will be united morally and ethically, and sustain a good quality of life.

Figure 3.1: Dual roles of ICT in Malaysia

Source: MIMOS (2004) As a result of the interaction between the emergence of ICT as a new economic

sector and society as an enabler, the nation will be transformed from an information society to a knowledge-based and finally to a values-based knowledge society. The interaction between the two roles of ICT policy is illustrated in Figure 3.1.

3 The e-Bario application is one of DAGS’s initiatives to deliver infra and infostructure

for sustainable human development to remote rural communities in Sarawak. 4 ICT-Manufacturing initiatives help local manufacturers to face the challenges of

ASEAN Free Trade Area (AFTA), World Trade Organization's Globalization (WTO) and automotive industry specific requirement of ISO/TS 16949 standards by promoting Advanced Product Quality Planning, Total Quality Management, Research and Development and Service Quality to Small and Medium industries (BSMSD, 2004).

40

The vision is to use ICT to transform Malaysia, across all sectors, into an information society, subsequently a knowledge society, and finally a “values-based” knowledge society. To make the transformation involves three elements that are interconnected to each other, namely the people, infostructure and content and applications, as illustrated in Figure 3.2.

The people factor in the changing environment involves access and equity, and

qualitative transformation. The infostructure acts as the mechanism for people’s accessibility and equitability. The content and applications act as the mediator for the people to transform to the values-based society with the help of the infostructure. The infostructure consists of two types of infrastructure, namely the hard infrastructure consisting of the hardware and telecommunications components, and the soft infrastructure consisting of databases, networks, laws, and regulations.

Figure 3.2: National IT framework

Source: NITC (2000)

To accelerate the development of ICT, microelectronics and information

technology, the Malaysian Institute of Microelectronic Systems (MIMOS) was established in 1985 under the Ministry of Science, Technology and Environment

41

(MOSTE). In 1994 MIMOS was appointed as the Secretariat to the NITC and played a pivotal role in the development of a framework for MSC. The Malaysian Network Information Centre (MYNIC) is a division of MIMOS that acts as the registry and registrar for the .my (dot my) domain.

The seven second-level domains in Malaysia are as follows:

i. com.my - for commercial organizations and activities ii. net.my - for network-related organizations and activities iii. org.my - for organizations and activities that do not qualify for other

categories iv. edu.my - for Malaysian educational organizations only v. gov.my - for Malaysian government organizations only vi. mil.my - for Malaysian military organizations only vii. name.my - for Malaysian individuals' personal use only

Table 3.4: Domain registrations in Malaysia

Year

com

.my

net.m

y

org.

my

gov.

my

edu.

my

mil.

my

nam

e.m

y

Yea

rly

Tota

l

1995 100 3 4 31 13 0 0 151 1996 537 32 30 73 42 0 0 714 1997 1306 61 37 57 30 0 0 14911998 2061 86 42 62 61 0 0 23121999 4738 222 144 64 63 0 0 52312000 10048 378 192 51 74 0 0 107432001 7372 348 204 83 111 0 0 81182002 7514 334 216 81 126 1 0 82722003 8030 408 289 99 154 3 0 89832004 9086 404 293 123 168 1 173 102482005 (Jan – Apl) 3035 147 120 35 72 0 16 3425

Total 53827 2423 1571 759 914 5 189 59688Source: Malaysian Network Information Centre, MIMOS (2005)

An increase in the number of website registrations in Malaysia at the first level of the .my domain, as shown in Table 3.4, demonstrates the presence of highly

42

ambitious organizations, institutions and public users in Malaysia who aim to have access to a network and to share information.

Generally, the growth of domain registrations increases every year. A

substantial increase of 372% in total was shown from 1995 to 1996 because of the response of organizations and institutions to the establishment of the MSC and the resulting activity. With the availability and accessibility of the infrastructure, ICT is used to promote economic and technological development. ICT applications have been used in the Malaysian public sector and the information available contributes to the creation of administrative innovation activity by government officials (Md. Nor and Mitomo, 2005a, Md. Nor and Mitomo, 2005b). The ICT applications act as the source of information and government officials are capable of using the information for administrative innovation activity.

An international comparison of domain registrations by public agencies from selected countries found that Malaysia scores higher than Singapore but lower than Japan, as shown in Table 3.5. These figures show that the Malaysian public sector is taking action to disseminate information and services by using ICT applications aimed at public users for fast delivery of services. Nevertheless, it can be argued to what extent the services provided is used by public users. One of the issues to be discussed is the diffusion of ICT.

Table 3.5: Public agencies’ domain registrations in selected countries

Malaysia As at April 2005

Singapore As at Nov. 2005

Thailand As at Nov. 2005

Japan As at 1st Dec 2005

759 406 681 841 Source: National Information Centres of selected countries

The ICT-based administrative innovation product services offered by the public sector will provide services to public users by using ICT applications, as an alternative to the traditional way of providing the services by manual methods. The marketability of the administrative innovation product services provided by the public sector depends to a large extent on the public users. The services will be utilized when the public users perceive that the services will result in a fast delivery of services that encourage the efficiency of the public users’ activities. In December 2005, the public sector is providing 2,930 applications in terms of digitized format forms that can be downloaded by users of the myGovernment portal which offers 325 online services (Utusan

43

Malaysia, 2005). This is the single gateway to information and services provided by Malaysian Government agencies on the Internet, initiated by MAMPU (MAMPU, 2005). Looking at the indirect impact of the dissemination of information, regarding policies and incentives5, by ICT applications through the administrative innovation services, one can see the extent of the involvement of foreigners who are investing in Malaysia. Five leading nations investing in Malaysia, representing 68% of FDI in 2004, are Germany (RM4.7 Billion), Singapore (RM1.3 Billion), Japan (RM1.2 Billion), USA (RM1.1 Billion) and Taiwan (RM488.1 Million). The investment is not only in new activities but 35.2% of the total FDI involves the expansion of present activities and diversification of projects (MIDA, 2005). 3.3 R&D in Malaysia

Throughout almost all developed and developing countries, a significant function of government, in supporting and promoting R&D activity, has been geared to addressing problems that are of national concern such as health, the environment and education, as well as problems or perceived opportunities relating to economic development (Duga and Studt, 2005). The role of the government in the initial stage of R&D is anticipated by the private sector because of the growing relationship between the private sector and the technology resources that are benefiting the private sector. To a certain extent, the government’s liberalization of policies and incentives will have prepared the ground for this growth.

Rahm, Kirkland and Bozeman (2000) pointed out three reasons behind the

involvement of government in funding R&D activity. The first is that basic research is often theoretical, leading to scientific findings that are less marketable and unlikely to produce returns on private investment. Secondly, research frequently requires an investment that is well beyond the ability of a single firm. Thirdly, the research will be performed with a long time lag from basic research to commercialization. As a result, firms that are concerned about annual profits will not invest in the activity.

In Japan, action has been taken to intensify research by establishing the

Council for Science and Technology, an advisory and inter-ministerial coordinating

5 This is part of the e-Government initiative meant to disseminate comprehensive digital

information about policies, incentives, application forms, the business environment and other related information issues for investors in Malaysia (MIDA, 2005).

44

body on science and technology policy (Ijichi and Goto, 1998). A special coordinating fund for promoting science and technology includes a program for increasing funds for the national institutes, aiming at establishing Centres of Excellence; a program to promote cooperation amongst national institutes on basic research that crosses the boundaries between ministries; and a program on prioritized areas to promote basic research to create technological initiatives in national institutes. The Japanese government also classifies R&D expenditure by the government as public investment rather than current expenditure, and this allows for public R&D funding through government bonds. The Science and Technology Basic Law was enacted in November 1995 and subsequently a Science and Technology Basic Plan was approved by the cabinet in 1996, with the aim of doubling the budget for R&D before the year 2000, to the level of that of the United States (Barker, 1998). The R&D expenditure in 1994 of Japan and the United States was Yen 12,419,209 million and Yen 30,951,000 million respectively (Ijichi and Goto, 1998). Collaborative activity was dominant mostly in basic research (Ray, 1998). University-industry cooperation was established that allowed national universities to accept researchers and research funding from private industry for local inter-sectoral collaboration (Barker, 1998).

R&D activity was rolled out to a much greater extent after the establishment of

the National Council for Scientific Research and Development (MPKSN) of Malaysia in 1975. The Council’s main function is to oversee research in the public sector so as to ensure that national resources are directed to enhance national development. Another function of the MPKSN is to formulate the science and technology policy that aims to transform economic development based on advanced technology. The intensification of R&D activity is one of the strategies resulting from the science and technology policy, which consists of three focus areas, namely:

a. To exploit agricultural resources and manufacturing technology, and to

develop a suitable product process in the area of medicine; b. To establish an effective R&D management system, with infrastructure

development such as patent offices, research institutions and manufacturing design institutions, to ensure the transfer of technology;

c. To encourage the industrial sector to invest in R&D by the establishment

of incentives, collaborative mechanisms between the private sector, IHL

45

and GRI, and to encourage the commercialization of R&D products with the emphasis on applied and experimental R&D.

The reason for the establishment of policies is to support R&D and to minimize

the risks involved in R&D activities. The integration of the strategies was undertaken in the Fifth Malaysian Plan (a short 5-year plan from 1986 to 1990) when the MPKSN established a funding mechanism called the Intensification of Research in Priority Areas (IRPA), to fund R&D activities in the GRI.

Between the Fifth Malaysian Plan and the Eighth Malaysian Plan (2001 to

2005), various funding mechanisms have been established. The funding of R&D comes from two main sources, the government and the private sector, with the private sector bearing the major cost and the government providing grants through the establishment of funding mechanisms.

i. Intensification of Research in Priority Areas (IRPA) ii. Industry Research and Development Grant Scheme (IGS) iii. MSC R&D Grant Scheme (MGS) iv. Demonstrator Applications Grant Scheme (DAGS) v. Malaysia Technology Park (TPM) vi. Malaysian Technology Development Corporation (MTDC) vii. Human Resource Development Scheme (HRDS) viii. Industrial Technical Assistance Fund (ITAF) ix. Malaysian Industry Government Group for High Technology (MiGHT)

The funding structure is explained in Appendix III. In order to support the high spending on R&D activity, incentives are established that lead to reduced costs and increased rates of return for the private investor. The incentives are administered by various agencies in the public sector. The incentives take effect for R&D activities in both Hi-tech and non-Hi-tech industries, contract R&D, R&D for associated companies and in-house R&D activity. Some examples of incentives include special pioneer status, investment tax allowances, direct tax exemptions, capital allowances for plant and machinery and full exemptions of import duty and sales tax on materials for R&D. A detailed explanation of the incentives for R&D is given in Appendix IV.

46

The Malaysian Science and Technology Information Centre (MASTIC), under

the MOSTE, publishes a biennial report about R&D activity. The R&D institutions are categorized into three sectors that play a major role in innovation and R&D activity. They are the GRI, IHL and PRI. The GRI represent the public sector and the PRI represent the private sector in innovation and R&D activity. Even though some of the IHL are public universities, the fact that the sector includes some private universities means that all the innovation and R&D activities done by the IHL are considered under the category of IHL and not the GRI. Non-profit organizations comprise a fourth category of R&D institutions in Malaysia, although reports of R&D activity only relate to 1994. In this dissertation, investigations were done only on GRI and PRI because of the lack of primary data from the IHL.

In the area of collaborative arrangements, the government plays the role of

establishing policies to encourage alliances between the GRI, PRI and IHL. The formation of alliances comes about because of the high costs of doing R&D, the risk and uncertainty of new products and processes, the desire to capture more of the external benefits of R&D and to exploit economies of scale (UNTP, 1999). The availability of technology for R&D also encourages the establishment of collaborative R&D activity. To cater for the vast area of inter-related establishments, the public sector in Malaysia has to undergo administrative innovation activity to provide innovative policies that encourage R&D activity.

In the United States, collaborative activity started with the establishment of

antitrust policy in the late 19th century (Mowery and Rosenberg, 1998). The collaborative activity involved linkage mechanisms, especially in the form of university/industry collaboration. Some examples of institutionalized mechanisms are university intellectual property offices, university/industry research centres, research parks, industrial extension services for the community, contract research, industrial R&D consortia and industrial offices for technology transfer. To support the collaborative arrangements, the government is taking action in terms of policies in the areas of economics, trade, patents, procurement, regulatory matters, R&D and taxes.

In the United Kingdom, the collaborative activity has sought to influence

funding mechanisms. Some examples of collaborative activity supported by the government are teaching company schemes aimed at transferring technology, training

47

programs, and programs that provide support for specific projects involving science based and industry partners in certain priority areas. Technology foresight is the collaborative activity aimed at identifying opportunities in markets and technology that will enhance the prosperity and quality of life.

In Japan, collaborative activities involve the enacting of laws to promote

government spending to attract people to follow scientific careers. Some examples of the action taken are the establishment by the government of a 5-year plan focusing on facilities and equipment, educational improvement and research in graduate schools, securing and training researchers, and formulating policies to improve research facilities. As part of university/industry cooperation, university scientists are allowed to work in private companies. Funding mechanisms are allowed to establish projects in areas including space science and astronomy. New research institutes have been established including the Science and Technology Agency Centres of Excellence. The New Energy and Industrial Technology Development Organization (NEDO) channels funds directly to university researchers for its Original Technology R&D Promotion Program, where fixed-term contracts for scientific personnel have been established.

3.3.1 Expenditure for R&D

The Malaysian target of 2% gross expenditure on R&D (GERD) over GDP, GERD/GDP, in 2000 was not achieved. As a general profile of Malaysian R&D expenditure, the overall trend of expenditure on R&D has been increasing since 1992, as shown in Table 3.6.

The GERD/GDP also shows an increasing trend since 1992, even though it decreased by about 0.12% in 1996. This decreases was contributed to by the decrease in expenditure in the GRI and IHL. R&D expenditure for GRI showed a decreasing trend in 1994 and 1996 but it increased in 1998 and 2000.

The fluctuation of overall expenditure and the GERD/GDP ratio show a similar

trend that implies that not much intensification of expenditure has taken place when compared to national GDP, as shown by Figure 3.3. The achievement of R&D expenditure in 2000 was only 0.5% of GDP and the trend of positive growth in 2002 is shown as 0.69% of GDP.

The expenditure in GRI, which previously was dominantly on agricultural

48

science research, had shifted to information, computers and communication technologies by 1998, responding to the government’s efforts to promote development of the IT industry. In PRI, the expenditure in the field of engineering sciences in 1992 had shifted to applied sciences and technologies in 1994, 1996 and 2000. The shift is towards supporting the development of emerging technology relevant to the sector, in order to increase market competitiveness.

Table 3.6: Profile of national R&D expenditure 1992 - 2002

Expenditure (RM million) 1992 1994 1996 1998 2000 2002

Ratio GERD/GDP 0.37 0.34 0.22 0.39 0.50 0.69 Overall 550.7 611.3 549.2 1127.0 1671.5 2500.6PRI 246.3 292.6 400.1 746.1 967.9 1633.1GRI 253.7 164.9 108.7 247.3 417.5 507.1 IHL 50.7 150.9 40.4 133.6 286.1 360.4 NPO - 2.9 - - - % GRI / Overall 46.1 27.0 19.8 21.9 25.0 20.3

Source: 2004 National Survey of Research and Development Report by MASTIC

Figure 3.3: R&D expenditure

R&D Expenditure and GERD/GDP

2500.6

1671.51127.0

549.2611.3550.6

0.37 0.340.22

0.390.50

0.69

0500

10001500200025003000

1992 1994 1996 1998 2000 2002

Expe

nditu

re(R

M m

illio

n )

0

0.2

0.4

0.6

0.8

GER

D/G

DP

Expenditure GERD/GDP

Source: Adapted from Table 3.6

The high percentage of government spending through GRI in 1992, at 46.1%, declined to 20.3% in 2002, implying that the action taken by the PRI was in response to the technology advancements needed by industry, as shown in Table 3.6. Internationally, government spending for R&D in developed countries was 20.2% in Japan in 1994,

49

35.5% in the United States in 1995, 39.3% in Germany in 1995, 44.3% in France in 1992 and 32.3% in the United Kingdom in 1993 (Watanabe and Hemmert, 1998).

The presence of outsourcing is an element to look at regarding the demand for

R&D activity. The outsourcing of R&D expenditure of RM569.1 million in 2000 declined by 46.2% to RM306.0 million in 2002. In 2000, 76.7% of the expenditure was outsourced to local institutions and 23.3% to institutions outside Malaysia. The reverse occurred in 2002 when 24.8% of the expenditure was spent locally and 75.2% was outsourced to institutions outside Malaysia (MASTIC, 2004). In the year 2000, private sector outsourcing expenditure amounted to RM131.9 million, GRI amounted to RM433.0 million and IHL amounted to RM4.1 million. Although the outsourced funds were high, about 97.3% of the locally outsourced funds went to local IHL. The private sector outsourced funds received by GRI were very small, as shown in Table 3.7.

Table 3.7: Outsourcing by the private sector

Outsourcing by Private Sector 1992 1994 1996 1998 2000

Expenditure (RM million) 48.5 29.4 57.0 69.6 131.9 To GRI 0.057 0.3 0.1 4.7 0.4 To IHL 0.012 1.9 1.6 4.6 4.8 To Private Sector 0.2 2.2 2.4 3.3 5.4 To Overseas 48.2 25.0 52.9 57.0 121.3

Source: National Survey of Research and Development Report (Various Years) Three issues contributed to the outsourcing of R&D activity to institutions

outside Malaysia. The first reason was that local researchers were lacking in terms of expertise and technology. Private sector institutions that are active in R&D are among the MNC investing in Malaysia through FDI. The investment involves technology that is not available locally (MASTIC, 2000). Secondly, private sector companies outsourced the activity to their mother companies overseas because they are MNC. The third reason is that the researchers were lacked of networked with other researchers (Narayanan and Wah, 2000).

Internationally, Malaysia, with GERD/GDP of 0.69 % in 2002, is slightly ahead of some ASEAN neighbours such as Indonesia and The Philippines with GERD/GDP of 0.05% and 0.11% respectively. Singapore leads the ASEAN countries with 2.15%, well ahead of other members. Many countries registered a high GERD/GDP ratio when compared to Malaysia, especially developed countries such as Japan and the United

50

States with 2.98% and 2.72% respectively in 2000, as illustrated by Figure 3.4 (Duga and Studt, 2005 and MASTIC, 2004).

Figure 3.4: GERD/GDP ratio of selected countries

GERD/GDP ratio of selected countries

0.000.501.001.502.002.503.003.50

1992 1994 1996 1998 2000 2001Year

GER

D/G

DPl

kj

United StatesJapanGermanyFranceUnited KingdomItalyCanadaRussiaMalaysiaSingapore

Source: Duga and Studt (2005) and MASTIC (2004)

Japan leads in terms of GERD/GDP ratio where the private sector accounts for

about 70% to 75% of the expenditure followed by universities, government and non-profit laboratories at 15%, 10% and 5% respectively. The figures for the United States’ private research institutions show them declining from 75% of the expenditure followed by universities (approaching 20%), government (declining from 15%) and non-profit laboratories (3% to 5%). 3.3.2 Manpower for R&D

The intensification of R&D activity in Malaysia has been supported by the increase of manpower. Distributions of researchers from all four categories of research institute are shown in Figure 3.5. The number of research personnel in Malaysia increased continuously from 11,472 in 1994 to 24,937 in 2002, as shown in Table 3.8. The increase of research personnel over the period was 2.17 times. Within the same period, the ratio of researchers per 10,000 labors shows an increase of 7.83 times.

51

Figure 3.5: Percentage of research personnel (headcount)

Research Personnel (Headcount)

6850 65147865 7777 7222

31641342 2287

4246 5177

1417

1253811239

19751337410

300060009000

1200015000

1994 1996 1998 2000 2002

GRIPRIIHLNPO

Source: National Research and Development Survey 1994 to 2002 (MASTIC)

Table 3.8: Research personnel and researchers per 10,000 labors Year 1994 1996 1998 2000 2002

Research personnel (headcount) 11472 9193 12127 23262 24937Researchers per 10,000 labors 2.3 5.0 7.0 15.6 18.0

Source: National Research and Development Survey 1994 to 2002 (MASTIC) In GRI the number of personnel by headcount was registered at 7,777 in 2000

as shown in Table 3.9. IHL contributes 48.3% of the total R&D personnel and the researchers represent 59.3% of total researchers in the nation. The large number of researchers in IHL implies a variety of expertise that contributes to the inflow of locally outsourced funds from other research institutions. The private sector contributes the lowest percentage of the manpower but the highest expenditure on R&D activity.

Table 3.9: R&D personnel (headcount) and nationality in 2000 Malaysian Foreign

Sector

Res

earc

her

Tech

nici

an

Oth

er S

taff

Res

earc

her

Tech

nici

an

Oth

er S

taff

Total

GRI 3,676 1,116 2,820 133 22 10 7,777 IHL 8,193 794 1,511 716 14 11 11,239 Private 2,136 342 1,594 168 1 5 4,246

Total 14,005 2,252 5,925 1,017 37 26 23,262 Source: 2000 National Survey of Research and Development Report (MASTIC)

52

Internationally, Malaysia is ahead of other nations in ASEAN with 15.6 researchers per 10,000 labors in the year 2000 rising to 18.0 in 2002, except for Singapore, which leads with 83.5 researchers per 10,000 employees in 2000. Other selected developed countries registered 136.0 for Japan (1999) and 74.0 for the United States (1999).

The research personnel in the GRI vary academically from the level of PhD to

non-degree holders as shown in Table 3.10. Once again the IHL registered the highest number of research personnel with the highest academic qualification (doctorate) and the private sector shows the lowest number of researchers with the highest qualification.

Table 3.10: Number of researchers (headcount) and nationality in 2000

Malaysian Foreign

Sector

Doc

tora

te

Mas

ter

Bac

helo

r

Non

-Deg

ree

Doc

tora

te

Mas

ter

Bac

helo

r

Non

-Deg

ree

GRI 967 1,301 1,012 396 82 30 20 1 IHL 2,767 1,790 2,422 1,214 276 239 197 4 Private 59 187 1,494 396 8 6 138 16

Source: 2000 National Survey of Research and Development Report (MASTIC)

Foreign researchers play a role in Malaysian R&D activity, not only in PRI but also in IHL and GRI. In the private sector, most of the foreigners hired in the field of engineering are involved in the manufacture of electrical machinery and apparatus; in IHL researchers are hired in the fields of engineering and agricultural, medical, biological and applied science; and in GRI they work in the veterinary, nuclear technology, agricultural and industrial research institutes. In Japan in 1982, attempts were made to attract foreign researchers by deregulating laws and procedures to permit the employment of foreign nationals at the Japanese national universities (Barker, 1998). Considering the period 1994 to 2000, the increase in researchers per 10,000 labors was 7.83 times and the increase in GERD/GDP ratio was only 2.03 times, implying that increasing the number of researchers to achieve the national expenditure target of 2.0% of GDP should intensify the R&D activity.

53

3.3.3 R&D output It is still uncertain whether the output of the R&D activity will justify the

expenditure and the increase in number of researchers. Nevertheless, the number of projects completed by the researchers shows a positive trend with an increase of 400% from 1274 projects in 1998 to 6372 projects in 2002. The patents granted for new products have gone mostly to foreign researchers, as shown in Table 3.11.

The issue of the commercialization of products curbs the achievement of the

research institutes when MOSTE (2004) reports that out of 5232 R&D projects implemented from 1991 to 2000, fewer than 5.1% were commercialized. Factors curbing the commercialization are, among others, lack of effective linkages and networks, and insufficient knowledge of the commercialization process.

Table 3.11: Number of patents granted in Malaysia

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002Residents 14 21 29 79 52 21 39 24 18 32 Foreigners 1270 1608 1724 1722 734 545 682 381 1452 1460Total 1284 1629 1753 1801 786 566 721 405 1470 1492

Source: Malaysian Science and Technology Information Centre (MASTIC) Internationally, the number of patents granted to Malaysia shows an increasing

trend since 1995, ahead of any other country in ASEAN except Singapore, as shown in Table 3.12. Malaysia cannot be compared to developed countries like Japan and the United States in terms of R&D output.

Table 3.12: Number of patents granted by United States Patent Office

1993 1994 1995 1996 1997 1998 1999 2000 2001Indonesia 5 9 7 2 12 10 5 14 10 Malaysia 19 16 8 24 29 35 34 47 56 Philippines 5 1 4 4 21 19 21 12 15 Singapore 44 59 61 97 100 136 152 242 304 Thailand 17 8 10 11 11 21 29 30 47 Japan 23411 23500 22864 24046 24183 32116 32513 32922 34891USA 61226 64244 64399 69328 69860 90649 94040 96920 98594

Source: Technology Assessment and Forecast (TAF) Database, United States Patent and Trademark Office, USA, from MASTIC

54

Another indicator used by MASTIC to measure the output of the researchers is the number of publications they produce. Comparing the number of papers published by the researchers in ASEAN countries, Thailand was the highest with 7,759 publications in the year 1998 followed by Malaysia with 5,626 publications, as shown in Figure 3.6.

An examination of the evidence and implications of ICT usage in the public

sector as to the output of the research institutes in Malaysia shows that the accumulation of domain registrations in the public sector (gov.my) has a positive relationship with the number of projects undertaken by the research institutes, as shown in Figure 3.7. This implies the presence of a relationship between the R&D activities carried out by the researchers and the information disseminated by the public sector through its ICT-based services.

Figure 3.6: Number of publications by researchers in selected

ASEAN countries (1998)

Philippines,3,871 (19%)

Thailand, 7,759(39%)

Malaysia, 5,626(28%)

Indonesia, 2,775(14%)

Source: MASTIC (2001)

Figure 3.8 shows an international comparison for selected countries between

the number of public agencies’ domain registrations, as in Table 3.5, and the number of patents registered, as in Table 3.12. The figures for Japan show that the services provided by the public agencies contribute to a very high output of R&D activities as compared to those of developing countries. Malaysia is ahead of Thailand in the ASEAN group of countries. From Figure 3.8, it can be seen that an increase in ICT-based services provided by the public agencies leads to an increase in R&D activity.

55

Figure 3.7: ICT-based services and R&D output

Public sector ICT services and R&D output

502

338223

637.2533.5

127.40

100200300400500600700

1998 2000 2002Year

Num

ber Cumulative

registration ofgov.my

R&D projects(x 10)

Source: Adapted from Table 3.4 and MASTIC (2004)

From the comparisons made in Figure 3.8, it can also be seen, from the

increasing number of domain registrations that the research institutes have responded well to the initiatives taken by the public agencies that provide services and information, in terms of their use of ICT applications.

Figure 3.8: R&D output as compared with public agencies’ domain registrations for selected countries

Public agencies domain and patent registrations

0100200300400500600700800

`92 `93 `94 `95 `96 `97 `98 `99 `00 `01Year

Dom

ains

(No.

)

0

10

20

30

40

50

60

Pate

nts (

No.

) Japan DomainsThailand DomainsMalaysia DomainsJapan Patent (x 1000)Thailand PatentMalaysia Patent

Source: Various sources

56

3.4 Comparing ICT and R&D expenditure with R&D profiles When looking at the effectiveness of ICT and R&D expenditure, comparisons can be made between the ICT and R&D expenditure of the nation as a whole with the R&D output of the research institutes. i. R&D expenditure per project

Comparing the R&D expenditure for the research institutes with the number of projects completed 1998 to 2002, this shows a negative trend as in Figure 3.9.

The negative trend of expenditure per project means a positive achievement of spending in R&D per output by the research institutes. The 64.77% decrease of the ratio from 1998 to 2000 may be due to a factor that promotes the reduction of costs in undertaking R&D in the research institutes.

Figure 3.9: Ratio of R&D expenditure per project

Number of projects and R&D expenditure6,372

5,335

1,274 2500.61,671.5

1127.00

1,0002,0003,0004,0005,0006,0007,000

1998 2000 2002

RM

(mill

ion))

)

0

0.2

0.4

0.6

0.8

1

Rat

io E

xpen

ditu

ree

per p

roje

ctProject

R&DExpenditure

RatioExpenditur

Source: Adapted from Table 3.6 and MASTIC (2004) The reduction of costs in undertaking R&D activities may be due to the

establishment of networks among the researchers. The researcher in a research institution benefits the network by sharing information as part of the process of doing the research. The networks established increase the number of researchers who are capable of producing and diffusing the information, resulting in a reduction of the marginal cost of disseminating the information (Foray, 2004).

57

ii. ICT expenditure per project Comparing the ratio of national ICT expenditure with the number of projects

completed by the research institutes from 1998 to 2002 shows a negative trend, as in Figure 3.10. The ICT expenditure per project decreased from 1998 to 2002, indicating a positive achievement in spending on ICT per project carried out by the research institutes.

Figure 3.10: Ratio of ICT expenditure per project

Number of projects and ICT expenditure

651259054840

1,274

5,3356,372

0

2000

4000

6000

8000

1998 2000 2002

RM

(mill

ion))

)

0

1

2

3

4

Rat

io E

xpen

ditu

reee

per p

roje

ct

ICTexpenditure

Project

RatioExpenditureper project

Source: Adapted from Table 3.2 and MASTIC (2004)

The reduction of the ratio implies that the ICT usage may promote efficiency and productivity. An increase in efficiency and productivity in the R&D activity is the result of better access to the information needed by the researchers with the help of the ICT infrastructure and the network established by the researchers. iii. Outsourcing activity

As noted by Kagami and Tsuji (2001), outsourcing by Japanese, American and European IT companies is reinforcing their dependence on Asia. The outsourcing activity is the result of competition in management cost and quality terms in the developed countries. The fact of expenditure on outsourcing R&D activity to Malaysia may signal the presence of collaborative R&D activity by the research institutes. This phenomenon will signal further sharing of information between the parties involved in the activity.

The three factors that form a complex interrelationship between the parties

involved may result in the reduction of R&D expenditure per project and ICT

58

expenditure per project. These factors may motivate the sharing of information between the researchers in the research institutes and the participants involved in the economic and technological development of the nation. As sharing of information is of prime importance to the reduction of costs in R&D activity, ICT is complemented and expedited by the acquiring and flow of information.

Three findings that have resulted from the secondary data and the establishment

of policies and incentives motivate this dissertation to prove the four core issues, which are:

i. The usage of ICT applications in an organization will affect the management

system of the organization. To understand the issues that involve the management, this dissertation investigates what the managerial factors are that influence the usage of ICT applications as the source of information.

ii. The public sector is the agency that is responsible for supplying information to

the participants of development as guided by ICT policies and incentives. Government officials should be innovative in creating new services. To be innovative and comply with the needs of the participants, information must be acquired from various sources including ICT applications. It is important to investigate whether government officials are capable of using the information acquired through the ICT applications and creating new and innovative alternative services by using of ICT.

iii. Findings from the secondary data also show that the time taken in

implementing the ICT applications influences the reduction of cost per project. To understand the issue of implementing the ICT applications, this research investigates how the length of time of using the ICT applications influences the capability of government officials to innovate.

iv. Research institutes that act as pacesetters to technological development play a

vital role in initiating new products and processes. Using the information from the ICT applications means establishing networks that could contribute to cost reductions for R&D activity. The findings signal that the sharing of information from the networks implies that researchers are using the ICT applications as their source of information. From this framework, this

59

dissertation investigates at what level the ICT applications diffuse within the research institutes as the result of using the applications for the acquiring of information.

60

CHAPTER 4 RESEARCH METHODOLOGY

4.1 Introduction This chapter is divided into four sections, namely the introduction, research

design, the data collection and method of statistical analysis, and the hypotheses. The method that was designed has been influenced by the current state of ICT and R&D activity in Malaysia as explained in Chapter 3 and the literature review in Chapter 2, for the purpose of understanding the usage of ICT applications in Malaysia. It is also applied to examine the issue of diffusion of ICT applications and purposes of using ICT applications in the research institutes in Malaysia.

The chapter is arranged as follows:

Research design explanation: • Why the limitation and scope of research is on the public sector, the GRI and PRI • The research framework as the guideline for the overall research process • The operational framework as a guideline so that the research framework could be

operational during the research process Data collection and method of statistical analysis describing: • The method of selecting the sample • The type of statistical analysis that was used in this research

The purpose of this chapter is to design a method for understanding the usage of ICT in the public sector and the research institutes. This chapter explains the approach and the method from two dimensions: the usage of ICT applications in the public sector for administrative innovation activity, and the diffusion of ICT applications in the research institutes in Malaysia. To understand the usage of ICT applications for administrative innovation in the public sector, three factors are investigated, namely the managerial factors, innovation capability and length of usage. To understand the diffusion of ICT in the research institutes, the Linked Chain Model is incorporated for the measurement of the diffusion level. As a guideline, four hypotheses were developed to answer the research problems and objectives of this research.

61

Hypotheses will describe: • The formulation of the hypotheses that address the issues in the research problem

outlined in Chapter 1

4.2 Research design The purpose of this research was to be able to investigate the current state of

ICT usage in Malaysia and put forward recommendations to optimize usage of the ICT infrastructures and facilities that are available. The recommendations were in terms of policies and strategic action plans derived from the findings. 4.2.1 Scope of the research

This research is a micro level research where the usage of ICT applications is applied at the individual level. The individual is applied in this research because they involved in use of ICT applications in a very specific issue that is the administrative innovation in the public sector and the R&D activities at selected research institutions. The aggregate usage of ICT applications cannot be applied because it will mislead the measurement of usage of ICT applications for the purpose of administrative innovation and R&D activity. The misleading measurement relates to ICT is contributed to by the presence of a marginalized group of Malaysians relative to the advancement of ICT (NITC, 2000). The fact of uneven access to information contributed by geographical and income factors will result in uneven dissemination of information throughout the nation.

This research focuses on the usage of the ICT applications as the tools for acquiring information even though many factors have been used by academic researchers to measure the dissemination of information. Most research uses data involving the number of newspapers, fixed line telephones, radio, television, Internet penetration and availability of personal computers. In this dissertation, the study is of the sharing of information, in administrative innovation and R&D activities, that is disseminated with the help of tools that are online, interactive and via multimedia applications so that the individuals involved in the activities can interact with each other. Newspapers are printed information, and television and radio are online but non-interactive. The six media sources mentioned above were not used for an aggregate measurement of the nation in this research because of these reasons:

62

i. Newspapers as distributed printed information are concentrated in four of the fourteen states in Malaysia and non-English papers are more widely distributed than English papers in all fourteen states. This implies that the newspaper cannot be used as an indicator for the purpose of acquiring information for innovation and R&D activity in this research because of the presence of a language barrier.

ii. Television and radio act as an online and non-interactive way of

acquiring information. About 276,000 households constituting approximately 1.2 million Malaysians are categorized as poor in either relative or absolute terms. This group of people can be considered “marginalized” in ICT terms, as they are not able to own television or radio equipment.

iii. Fixed telephone lines present a distinct disadvantage for rural as

opposed to urban communities. In terms of telecommunications infrastructure coverage, the ratio of rural to urban is 1:3. The presence of a gap in telecommunications infrastructure makes the aggregate data misleading as a measurement for administrative innovation and R&D activity.

iv. PC ownership also shows an uneven distribution between the urban

and rural areas. Malaysians who do not own a PC are approximately 83% in rural households and 60% in urban households and this may contribute to the uneven distribution.

v. Internet penetration also shows an uneven distribution across the

country and it does not reflect the population distribution. Internet penetration is also influenced by PC ownership because this is essential for accessing the Internet. This is exacerbated by the language barrier as it is estimated that 90% of the content is currently in English (NITC, 2000).

Focus is also given to the usage of ICT applications at the workplace because

the information acquired at the workplace is what is needed for administrative innovation and R&D activity. As defined by Bain and Baldry (1992) the workplace is the place where work is done and acts as a fixed capital item in the process of production involving machines and technology that depreciate in value. Another reason is that the workplaces involved in this research are the premises of public sector offices and research institutes where the best ICT facilities are available. This means that the

63

usage of ICT depends solely on the individuals working at these workplaces. Six ICT applications are identified as the sources of information considered in

this research, namely portals, groupware, workflow, electronic documents, intranets and innovation support tools. These six commonly used ICT applications are selected from the ten ICT applications identified by Carvalho and Ferreira (2001).

This research focuses on the workplace as the location of the use of ICT

applications by government officials. The private sector as the driver of development depends on the public sector for policies, and incentives as explained in Chapter 3. This is one of the reasons why the public sector should be innovative in supporting the activities of the private sector. The public sector also acts as the facilitator for government intervention, as a control system for the private sector’s activities including licensing and monitoring. The presence of ICT applications might influence the working style of the public sector.

GRI and PRI contribute to indigenous technological development of the nation.

Given state-of-the-art ICT facilities, networking among researchers can be established so that they can share information that contributes to the development of products through R&D activities. But the usage depends on the individual researcher who perceives the relative advantage of the technology for gaining information that will further the development of the product in question. This perception is one of the attributes of diffusion (Rogers, 1995). On this basis, this research reflects the quantitative implications of ICT usage rather than its qualitative impact. For this reason, this research focuses on the usage of ICT applications at the workplace at the individual level. The information acquired is at the workplace with the help of PC and telecommunication connections.

4.2.2 Research framework

As a guideline to the research process, a research framework was designed as shown in Figure 4.1.

The overall dimension of this research is the usage of ICT applications for acquiring information to be used for administrative innovation in the public sector and R&D activity in GRI and PRI. The ICT applications are used to establish networks for the acquiring of information from the internal or external domain.

64

Administrative Innovation in Public Sector

Empirical

Policy and Implication

Literature

Figure 4.1: Research framework

Jimmy and Li (2003) have pointed out that the implementation of ICT within an organization is equivalent to having access to all of the data and information of the organization. The establishment of a network as the result of usage of ICT applications will accelerate the flow of information for information transfer and information development (Carvalho and Ferreira, 2001). The establishment of a network will also increase the number of members who are capable of producing, diffusing and absorbing the information, which is followed by a substantial decrease in the marginal costs of the dissemination of information. As a result of the dissemination of the

R&D Activity in GRI and PRI

Usage of ICT Applications

Innovation Capability

Diffusion Purposes of using ICT applications

Managerial

Length of Usage

65

information, the users of the application will accumulate the information to be used for administrative innovation and R&D activity in the organization.

The public sector must initiate the administrative innovation activities in the governing system so that information can be shared with all the participants in the development. Government officials must be innovative so that the services provided will support demands from the other participants. To be innovative, government officials are influenced by managerial factors in relation to the usage of ICT applications at the workplace. Three of these managerial factors that have been considered in this research are: external capital, comprising customer and partner capital; internal capital, consisting of human capital and structural capital; and decision-making. Information acquired from the ICT applications is also a factor considered in this research in relation to administrative innovation activity in the public sector, and it is measured by the innovation capability of government officials. Another factor is the influence of the length of time of using the ICT applications on the capability to innovate. Rogers (1995) stressed that network is developed as the result of the diffusion, which leads to an increase in the number of users who are capable of producing, diffusing and absorbing the technology; and substantially decreases the marginal costs of dissemination of information. In this research, the ICT applications that were used by researchers in the research institutes were diffused as the researchers used the ICT at the workplace.

The level of diffusion of the ICT applications might depend on GRI and PRI. The R&D activities carried out in the GRI and PRI will result in the emergence of new products. The information acquired from the ICT applications contributes to the development of the products. The ICT applications are diffused as the result of using the ICT applications, for the purpose of acquiring the information.

In this research, the literature reviewed has influenced the overall approach of

the research process. The most influential literature reviewed was that by Kline (1985), in that the Linked Chain Model was used to measure the level of diffusion. This research involved the collection of primary data. The data was analyzed empirically to arrive at the findings. From these findings, a recommendation was put forward in the form of a strategic action plan guided by the policy that has been established.

66

Recommendation to intensified information sharing

Interpretation of literature and empirical analysis

Figure 4.2: Operational framework

Investigate the managerial factors

- Case Study 1 (Regression Analysis)

Investigate the innovation capability

- Case Study 2 (Regression Analysis)

Investigate the factor of length of usage - Case Study 2

(Mean Analysis)

Investigate the influence of research institutes - Case Study 3 (Descriptive and Mean Analysis)

Investigate the purposes of using ICT applications - Case Study 3 (Regression Analysis)

Usage of ICT Applications

ICT promotes innovation in the Malaysian public sector

Diffusion of ICT in GRI and PRI

67

4.2.3 Operational framework The operational framework was designed as in Figure 4.2. Two distinct aspects

constitute the research, where the first involves the public sector and the second involves the research institutes comprised by the GRI and the PRI.

Under the first aspect is an investigation of three factors that influence the

contribution of information from the usage of ICT applications for administrative innovation activity in the public sector. Two case studies were undertaken so as to understand the three factors that influence the contribution of information, namely:

A. The managerial factors B. The innovation capability of government officials for administrative

innovation activity C. Influence of length of time of ICT usage on the innovation capability of

government officials

The second aspect seeks to understand the diffusion of ICT applications by investigating:

D. The diffusion of ICT applications in the research institutes and the

purposes of using ICT applications among the researchers in GRI and PRI. A. The managerial factors

Case Study 1, as in Section 6.2 of Chapter 6 of this dissertation, attempts to investigate the managerial factors that influence the usage of information acquired from the ICT applications for administrative innovation activity in the public sector. Factors that influence the sharing of information, which interact and synergize with each other, are: human capital, structural capital, customer capital, partner capital, and decision-making (Juergen, 2003). In this study, there are three managerial factors that influence the use of information, and these are:

i. External capital – consisting of customer and partner capital as external

factors affecting management, where the focus is on understanding the needs of the customers and partners as ICT applications are used in the

68

workplace ii. Internal capital – attention is given to understanding the needs of

government officials who are involved in the administrative innovation activity using information from ICT applications used at the workplace

iii. Decision-making – to understand the decision-making processes that are

supported by the usage of information systems at the workplace

For each factor, indicators are designed in the form of questionnaires. To analyze the significant variables for each factor, the regression method was applied for each model. B. The innovation capability for administrative innovation activity

The fundamental issue to be addressed is whether government officials have managed to acquire information as the result of using the ICT applications. The information acquired at the workplace as the result of using the ICT applications is later used for administrative innovation activities. The innovation capability of government officials partly depends on the information acquired from the usage of ICT applications and how government officials perceive their use of the information as explained in Section 7.3 of Chapter 7. Analysis was done by applying the regression method to identify the variables of ICT usage that were significant in terms of the innovation capabilities of government officials. From this study, it can be established whether government officials used the information, available as the result of using the ICT applications, for administrative innovation activities.

C. Influence of length of time of ICT usage on innovation capabilities of

government officials Section 7.4 of Chapter 7 is an attempt to examine the effect of information acquisition by government officials according to the length of time of using the ICT applications that influence their innovation capabilities. In this study, simulations were done using the mean values of indicators that are significant for innovation capability according to the length of time of using ICT applications at the workplace. The results of the simulations will show the influence of the length of time of using the ICT applications at the workplace on the innovation capabilities of government officials. The usability of information means that the users are capable of creating and dealing with an

69

increasing amount of information. D. The diffusion of ICT applications in the research institutes The second aspect of this research is to study the diffusion of the identified ICT applications in GRI and PRI. The information available from the innovative services introduced by the public sector, which are used by the researchers in both types of research institute, contributes to product development. The need for information will influence how the usage of the ICT applications and leads to diffusion. The diffusion level is measured by incorporating the Linked Chain Model (Kline, 1985). Case Study 3 in Chapter 8 of this dissertation identifies the diffusion level of each ICT application in GRI and PRI. Mean analysis was applied to identify the point of diffusion of the ICT applications. Further study was done to investigate purposes of using ICT applications at the point of diffusion. Regression analysis was applied to investigate the significant indicators for the ICT applications that determine purposes of using ICT applications. In this analysis, the indicators for each ICT application that are significant indicate the purpose of using ICT applications by which the information has been shared by the researchers in GRI and PRI. 4.3 Data collection and method of statistical analysis 4.3.1 Data collection

The data involved in this research are primary data gathered from two sets of samples from different populations, as explained in Chapter 5. Case Studies 1 and 2 sampled the population of government officials. Case Study 3 sampled the population of researchers from the GRI and the PRI. Primary data was gathered by using questionnaires. Appendix V presents the questionnaires for Case Studies 1 and 2 and Appendix VI presents that for Case Study 3.

The samples were 450 for the first set, used for the first aspect of this research,

and 1500 for the second set, used for the second aspect of this research. These samples were sufficient to identify the presence of any differences in the population.

These decisions are justified as follows:

70

i. The sample came from the population that has used ICT applications at the workplace and they are likely to be involved in the administrative innovation and R&D activities

ii. They represent all levels of the management hierarchy, which means that

the usage of the ICT applications has not substantially influenced the type of information acquired from the ICT applications

iii. The population sampled in the second aspect of the study involved

researchers from the GRI and PRI, thus they represent two different sectors of research institute used as a comparison

iv. The samples in the two aspects of this research represent all sectors in the

economy and various departments within the research institutes

4.3.2 Statistical method for empirical analysis Descriptive analysis and regression analysis were applied to analyze the data. Descriptive analysis Descriptive analysis was applied to this research to:

i. Perform data cleaning ii. Summarise the characteristic distribution of the primary data iii. Describe the characteristics of the data so as to explain the empirical

findings

iv. Make comparisons between different characteristics of the data and the empirical analysis

4.4 Hypotheses

From the research problem in Section 1.4 of Chapter 1 and the research framework in Section 4.2.2 of this chapter, hypotheses were formulated and tested in this study. The hypotheses were tested in different case studies that are discussed in Chapters 7 and 8.

71

The first part of the research framework (the first aspect of this research) seeks to examine the issue of whether government officials in Malaysia are capable of acquiring information and using the information for administrative innovation activities. The study addresses the hypothesis H1, that is:

H1 Information acquired as the result of ICT usage at the workplace by

government officials is used for administrative innovation activity To prove hypothesis H1, the significant variable that explains the usage of

information at the workplace for administrative innovation must be proved. The presence of the significant variable means that information acquired from the usage of ICT applications has been used for administrative innovation activities by government officials. This also establishes the fact that the acquiring of information from the usage of ICT applications for innovation activity would contribute to the innovation capabilities of government officials. This issue is discussed in Section 7.3 of Chapter 7.

From the establishment of this fact, an extended study is undertaken to examine

the second issue in this research, as illustrated by the research framework, namely whether the length of time of using ICT applications at the workplace influences the innovation capabilities of government officials. From this research problem, the hypothesis to be proved, H2, is as follows:

H2 The length of using ICT applications at the workplace is positively

related to innovation capability Proving hypothesis H2 would mean that the information acquired from the

usage of ICT applications by government officials has enriched them with information, and the length of time of using the ICT applications explains the degree of enrichment. This enrichment will contribute to increasing the innovation capabilities of government officials. The discussion of this issue is presented in Section 7.4 of Chapter 7. The proving of hypotheses H1 and H2 would establish the involvement of government officials using the information acquired from ICT applications for administrative innovation activity in the public sector. As the public sector facilitates and collaborate the activities of other participants in the economic and technological development of the country, the involvement of the GRI and PRI is of prime importance.

72

The second aspect of this research, as explained by the research framework, focuses on the information acquisition at the GRI and PRI that result in the diffusion of the ICT applications. To examine the issue of diffusion of ICT applications used by the researchers, and purposes of using ICT applications at both types of institute, two hypotheses, H3 and H4 were developed as follows:

H3 GRI and PRI have different levels of diffusion for each ICT

application H4 GRI and PRI have different purposes of using ICT applications in

terms of frequency of the usage In accepting H3, this means that there are variations in diffusion of different

types of ICT application used by the researchers at the GRI and PRI. The level of innovation development processes in the Linked Chain Model will measure different levels of diffusion. Accepting hypothesis H4 means that there are variations in the way of acquiring the information amongst the research institutes. Both of these issues are discussed in Chapter 8.

73

CHAPTER 5 DESCRIPTION OF CASE STUDIES

5.1 Introduction This research consists of three case studies, namely Case Study 1, Case Study 2

and Case Study 3, as described in Chapter 6, Chapter 7 and Chapter 8 respectively. These case studies are to examine relationship between ICT-based administrative innovation activities in the public sector and R&D activity in the research institutes in Malaysia. The innovative services are provided by the public sector as ICT-based administrative innovation activities that will disseminate information and used by the researcher in the research institutes. 5.2 Description of Case Study 1

The ICT-based administrative innovation activity carried out in the public sector is for the purpose of giving innovative services to the public user. This case study examines the managerial factors that influence the usage of information acquired by using the ICT applications for the purpose of initiating administrative innovation activities in the public sector. The managerial factors are internal capital, external capital and decision-making. Internal capital consists of human capital and structural capital, and external capital consists of customer capital and partner capital. a. Human capital

Human capital is apparent in the form of a talented employee who has the capability to produce an idea for new services in an organization, by way of innovation and renewal of the present working system. This depends on knowledge, skills, competencies and experiences. Human capital comprises employees who are capable of creating value, and encompasses the value of individuals in an economic sense. Nevertheless, human capital can be preserved

This research involves three case studies. This chapter describes the relationship between the case studies. Case Study 1 examines the managerial factors influencing the usage of information for administrative innovation activity in the public sector. Case Study 2 examines innovation capability and the influence of the length of using ICT on innovation capability. Case Study 3 examines the impact in the research institutes as the researchers use the innovative services provided by the public sector.

74

by way of training and upgrading skills. In December 2003, there were 1,080,866 government officials in the Malaysian public sector and among them will have been many with good ideas for administrative innovation activity. The factors that influence them to use the information acquired from ICT applications are investigated so as to encourage government officials to innovate.

b. Structural capital

Structural capital takes the form of an organization’s structural procedures that facilitate productive collaboration between employees and further the relationship between customers and partners. Innovation comes from the interaction between employees resulting from the sharing of information, ideas and experiences. To share information in terms of structural capital, an organization needs the right infrastructure, a stimulating culture, correct procedures, and a working scheme between the internal and external domain, so that information flow is smooth within the organization. Structural capital is subdivided into three elements, namely organizational capital, innovation capital and process capital. Organizational capital encourages specialized employees to perform. Innovation capital is an organization’s capacity to learn, innovate and adapt to rapid changes in technology. Process capital is a recycling and creative utilization of shared information and experience. Having control of the structural capital will lead to public reputation because the customer will judge the organization from his/her satisfaction with its services. Structural capital evolved from having a vertical function in the 1980s to a matrix structure in the1990s and finally to a network structure with the support of ICT at the present time.

c. Customer capital

Customer capital is an asset where information that comes from the customer becomes strategic because the organization has to be able to customize services to an individual customer.

d. Partner capital

Partner capital is an asset for relationship in the supply-chain, in terms of technology or personnel that supports an organization’s activity. The partner capital will affect the speed of delivery of services to the customer.

The relationship between human capital and structural capital is via the networks

75

that connect people to people and people to data. The result of the relationship is that the organization can react immediately to the needs of the customer, and achieve fast delivery of the services that are used by the customer.

Managerial factors that correspond to the needs of government officials could

lead to the usage of information acquired from the ICT applications for ICT-based administrative innovation activities. As a result, the ICT-based innovative services could lead to the dissemination of information for public users including the research institutes. In this case study, regression analysis is applied to examine the factors that influence the usage of information for administrative innovation activity. The comprehensive explanation of this case is given in Chapter 6.

5.3 Description of Case Study 2

This case study examines the usage of ICT applications at the workplace and length of usage of ICT applications that in turn influence innovation capability in the public sector. Examining innovation capability in the public sector will lead to an understanding of the capability to innovate new ICT-based services. As innovative services are provided by the public sector, these could contribute to the sharing of information among public users including the research institutes, as in Case Study 3.

To examine the involvement of government officials in administrative

innovation activity, seven indicators are applied, namely the frequency of ICT usage, ICT literacy, ICT use that improves job performance, knowledge that contributes to improving the working system, knowledge from ICT that can be captured whether through experience of using the ICT or training in using the ICT applications, the benefits from the knowledge gained, and knowledge that contributes to skill creation.

The purpose of examining the usage of information and the influence of length

of usage of ICT applications on innovation capability is to test hypotheses H1 and H2 as explained in Chapter 4. The comprehensive explanation of this case study is given in Chapter 7. 5.4 Description of Case Study 3 The innovative services provided by the public sector through the administrative innovation activity as described in Case Studies 1 and 2 are used by the researchers in the GRI and PRI for the purpose of acquiring information for their R&D

76

activity. This case study examines the impact of using the ICT applications in the GRI and PRI by analyzing the level of diffusion of ICT applications and the purposes of using ICT applications for the sharing of information. Six ICT applications that are commonly used in the public sector, GRI and PRI, were examined in this study, namely the intranet, electronic documents, groupware, workflow, portals and innovation support software. To measure the diffusion level of the ICT applications, the Linked Chain Model was applied, consisting of five levels of diffusion according to the structured innovation development process. The five levels of diffusion are market finding, analytic design, design and test, redesign and produce, and commercialization. To understand how the researchers in GRI and PRI acquire information by using the ICT applications, this case study analyzes the purposes of using ICT applications for the sharing of information. To do this, ten indicators, developed from six ICT applications, are used in this study. Regression analysis is used and the detailed explanation is given in Chapter 8 of this dissertation. 5.5 Sample and data collection for Case Study 1 and Case Study 2

The data used in Case Study 1 and Case Study 2 were gathered from the same sample of government officials in Malaysia. These studies were carried out between October and December 2003. Primary data collection was conducted by distributing 430 questionnaires through e-mail, post and by hand to agencies within the public sector in Malaysia. Twenty sets of questionnaires were distributed to 12 different locations, 60 sets each to Johor Bahru and Kuala Lumpur and 70 sets to Putrajaya, the Federal Government Administrative Centre. The population sampled for these studies were from the Ministry of Finance, the Ministry of Education, MOSTE, five local authorities, universities, public service departments and the Customs department.

From the questionnaires distributed, there were 326 responses and the

respondents were located as illustrated in Figure 5.1. The respondents represented the differing natures of job, such as policy making, operations and enforcement, management, finance, training, information systems and lecturing. Respondents also varied in the level of management hierarchy, including office assistants, clerks, executive, higher grade officials and managers. Detailed explanations of the analyses are given in Chapter 6 and 7 for Case Study 1 and Case Study 2 respectively.

77

Figure 5.1: Geographical distribution of respondents

Source: The World Factbook

5.5.1 Descriptive characteristics of Case Study 1 and Case Study 2

Of the 326 respondents, 54.3% (177) were male and 45.7% (149) were female, as shown in Table 5.1. Comparing the overall population to the number of government officials in December 2003，it is found that the distribution according to gender is very close to the actual population where males represent 53.0% and females 47.0%.

Table 5.1: Distribution according to gender

Respondent (%)

Population 2003 (%)

Male 54.3 53.0 Gender

Female 45.7 47.0

The distribution of the respondents, according to their academic qualifications

and majors, is shown in Table 5.2. It was found that 14.2% of the respondents majored in computing and ICT-related subjects, and they are distributed at all levels of academic qualification, except at doctorate level. The distribution of respondents with a computing or ICT-related major is very important, because they can be the pacesetters towards the use of ICT and ICT-related innovation projects by different levels of the management hierarchy at the workplace.

The use of ICT applications may be influenced by the nature of the job and

position in the management hierarchy of the government officials at the workplace. Investigating the use of different types of ICT application identifies the respondent,

78

categorized by job type, involved in the use of ICT applications. The five types of application that are commonly used by the government officials are word processing, e-mail, website access, multimedia and networking. Investigating their education level, in general, can identify where they fit into the management hierarchy in the public sector.

Table 5.2: Distribution according to academic qualification and academic major

Percentage of distribution (%)

Academic Major N

on

Deg

ree

Bac

helo

r de

gree

Mas

ter

degr

ee

Doc

tora

te

Oth

ers

TOTA

L

Computing, ICT or related field 2.8 7.7 2.5 0.0 1.2 14.2

Economics, accountancy, management and related 2.1 29.8 7.4 0.0 0.9 40.2

Science or science related 0.3 8.3 1.8 0.0 0.0 10.4

Engineering or engineering related 0.0 1.5 1.5 0.3 0.0 3.3

Others 10.4 12.3 3.4 0.6 5.2 31.9

TOTAL 15.6 59.6 16.6 0.9 7.3 100.0

Note: “Others” for the academic qualification means the respondent is not answering the question.

The influences can be contributed by the manner of using ICT in an innovative

and creative way due to the different jobs and positions in the management hierarchy held by the respondents. In this survey, descriptive analysis was undertaken to examine the role of management level and nature of job in influencing the use of ICT in innovative and creative ways. Figure 5.2 shows that the level of ICT use, measured from 1 to 5, where 1 = almost never used and 5 = almost always used, is well distributed among different academic levels and types of ICT application. It was found that use of ICT is independent of academic level and type of ICT application used. These results confirm that management level, as identified by academic level and nature of job, which is in turn identified by the type of application used, does not substantially influence the use of ICT in innovative and creative ways. The results conclude that the respondents

79

involved in this survey can be accepted as being representative of the government officials.

Figure 5.2: Level of usage of ICT applications according to academic level

0%

20%

40%

60%

80%

100%

1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Non-degree Bachelor Master Doctorate Others

NetworkMultimediaWebsiteE-mailWord processing

5.6 Sample and data collection for Case Study 3

Case study 3 involved researchers working in GRI and PRI in Malaysia. Primary data was gathered through the distribution of questionnaires and e-mails during the period November 2004 to January 2005. In this study, 800 questionnaires were distributed and 700 e-mails were sent to researchers in the research institutes. The research institutes vary in activity from agriculture to electronics, microelectronics, nuclear technology, remote sensing, telecommunications services and products, banking and finance. Structured interviews were carried out with twenty randomly selected researchers. The questions asked during the interviews were about issues of motivation, to find out about the initiation and commercialization of the projects the researchers were working on, thus seeking information about the economic returns of the projects. 5.6.1 Descriptive Characteristics of Case Study 3

From the 1,500 questionnaires distributed and e-mailed, 256 respondents (17.07%) answered the questionnaire, of whom 150 respondents represented GRI and 106 respondents represented PRI, as shown in Table 5.3.

The number of researchers in GRI and PRI is 6,113, this being 40.7% of the

total number of researchers in Malaysia (MASTIC, 2000). The gender balance in this

Res

pond

ent

1- Almost never 2- Occasionally 3- Frequently 4- Very

frequently

80

study is very close to reality, in that males represent 62.9% of respondents and in the total population of researchers, males constitute 73.3%. Female respondents were 37.1%, compared to the figure of 26.7% for female researchers in the population. The factor of sector also shows a reasonably close match between the respondents and reality, in that the respondents from GRI (58.6%) and PRI (41.4%) compare to the actual proportions of 62.3% and 37.7% respectively. The factor of education shows that 9.8% of respondents have doctorates, but in the overall population of researchers the proportion is 18.3%. The factor of years of using ICT applications in the workplace shows that the number of respondents is smaller as the number of years of using the ICT applications increases.

Table 5.3: Distribution characteristics of respondents

Frequency % Population

(2000) %

Gender Male

Female

161

95

62.9

37.1

4481

1632

73.3

26.7

Sector GRI

PRI

150

106

58.6

41.4

3809

2304

62.3

37.7

Education

Non-degree

Bachelors degree

Masters degree

Doctorate

24

152

55

25

9.4

59.4

21.5

9.8

809

2664

1524

1116

13.2

43.6

24.9

18.3

Years using ICT

application in the

workplace

<5 years

6 – 10 yrs

11 – 15 yrs

16 – 20 yrs

>21 years

129

57

47

17

6

50.4

22.3

18.4

6.6

2.3

n.a. n.a.

Note: n.a. means that the data is not available for the purpose of comparison in this study.

The respondents represent researchers in both types of research institute when these two factors are considered:

i. The respondents are from various sectors and activities.

81

ii. The respondents were randomly selected from various departments within the research institutes.

5.7 Conclusion

The three case studies carried out in this research are intended to improve understanding of the impact of using the ICT-based innovative services provided by the public sector in Malaysia by researchers in the research institutes. In order to examine how the public sector provides innovative services, Case Studies 1 and 2 look into the usage of ICT applications for ICT-based administrative innovation activity in the public sector and as the services are used by researchers. Case Study 3 examines the impact of the usage from the perspective of diffusion and purposes of using ICT applications for sharing of information.

82

CHAPTER 6 ICT THAT PROMOTES ADMINISTRATIVE INNOVATION ACTIVITY IN THE

MALAYSIAN PUBLIC SECTOR

6.1 Introduction Malaysia is one of the ‘second-tier’ New Industrial Countries, together with

Thailand, Indonesia and the Philippines. To be a fully industrialized country by the year 2020, Malaysia needs innovative participants that complement each other, consisting of the government, business players and industrialists. To ignite such an environment, ICT was introduced radically in 1996 when the MDC was established to promote MSC, the hub of ICT. To complete the circle of the ICT environment in Malaysia, the public sector was involved in creating applications for serving the public through services that are supported by ICT.

The Malaysian public sector acts as a facilitator and collaborator, and plays an

important role in complementing other actors in innovation and R&D activity in order to promote sustainable economic and technological development. Agencies in the public sector administrating the policies, and incentives must be innovative in applying the ICT applications to serve other participants. This means that the information that is needed by other participants must be available and disseminated by using ICT applications in the form of digital informatics systems that can be disseminated and thus accessed by other participants.

Networking between the participants should be enhanced to create an

The purpose of this chapter is to examine the usage of ICT applications for administrative innovation activity in the public sector in Malaysia. The managerial approach examines three factors, namely internal capital, external capital and decision-making. It is found that internal capital needs access to ICT, ICT training and interaction with top management leading to the usage of information from ICT applications for administrative innovation activity. Working closely and interacting with the external capital, and with the support of ICT facilities, will lead to the sharing of information for the activity. An open concept management system and consensus decision-making is needed so that government officials can be involved in the administrative innovation activity.

83

environment for the sharing of information. As argued by Lall (1999), the presence of high technology is accompanied by slow innovative6 activity on the part of local players due to lack of shared knowledge and networking, and failure to internalize the spillover effects of knowledge and skills creation. Hence, more attention must be paid to the innovation and R&D activities that are supported by the usage of ICT applications in the public sector. This will enable information exchange from external domains (Smolny, 2000).

The links between the public sector and other participants will result in more

sharing of information and lead to the enrichment of information that can contribute to the innovation and R&D activity of the participants. As a result of the interaction, they can co-produce innovation, where sharing of information will result in the emerging product that has considered the needs of other participants, as stressed by Gallouj (2002). This reflects the interdependence of an organization that is engaged in innovation and R&D activity. The information must be collated, stored, disseminated, generated and utilized.

The information from the ICT applications will be used as knowledge for

innovation and R&D activity. The ability to capture knowledge, supported by ICT, is the result of natural learning processes and dependent on the surrounding factors that influence the innovation activity.

This chapter presents a case study about factors that influence the use of

information for administrative innovation activity by government officials, as explained in the methodology in Chapter 4. 6.2 Case Study 1: Managerial factors that influence administrative innovation

activity This study was reported in Md. Nor and Mitomo (2005b) as Case Study 1 in this dissertation.

The administrative innovation activity is influenced by managerial factors because applying the ICT applications in an organization affects the organization’s total structure and inter- and intra-relationships. Juergen (2003) outlined four factors that

6 Malaysia ranked 49th in the world for innovation in 2001,

http://www.nationmaster.com/graph-T/eco_inn (18 Jan 2004)

84

influence the innovation activity of an organization, namely human capital, structural capital, customer capital and partner capital. The four factors interact with each other and synergize in ways that optimize the information available for the innovation. As a result, the product of the innovation takes on board the needs of the participants. The interaction between the four factors creates value in the management system. ICT is important for the interaction because the digitization of the business and the management system produces better productivity and economic networks. Establishment of the network will result in the sharing of information. Investment in ICT implies investment in tangible assets, which will create value because of the network’s formation. 6.3 Measurement indicators and variables

In order to understand the managerial factors that influence the use of information from ICT applications in the public sector in Malaysia, investigations were carried out of three elements, namely the internal capital that consists of human capital and structural capital, external capital that consists of customer and partner capital, and decision-making. This section explains the criterion and explanatory variables for the internal capital, external capital and decision-making.

i. Internal capital

Internal capital involves human capital and structural capital because both are solely under the control of an organization. The human capital plays an important role in using, implementing, interacting and accessing the structural capital in the system such as the ICT infrastructure, information, finance, management style and other assets.

The criterion variable that represents the internal capital is “to what level the top management is sensitive to the needs of the government officials”, measured from 1 to 5, where 1 = not at all and 5 = to a great extent. This variable explains how the organization has acted to encourage the human capital to use the information available in the ICT application for administrative innovation, and to interact with other members of the organization through the structural capital. If the correct action is taken by the organization, this means that it has satisfied the needs of the human capital to be innovative. In order to examine the action taken by the organization to fulfill the needs of the human capital, four explanatory variables were developed in the questionnaire, measuring 1 to 5, where 1 = not at all and 5 = to a great extent.

85

The four explanatory variables for internal capital are: motivation on the part of top management, the practice of open concepts, ICT training and easy access to networks. The first measures to what extent government officials perceives that top management motivates them to use information gathered from the ICT applications for administrative innovation. Motivation is given by way of clear organizational vision and mission statements, and via rewards and appreciation from top management for successful implementation of administrative innovation activity. When top management gives motivation to members of the organization this means that the structural capital is encouraging and promoting the human capital to be innovative. The practice of open concepts measures how government officials perceive that they are given opportunities to put forward innovative ideas to top management. This means that the human capital has benefited from the structural capital in terms of promoting their innovative ideas to be decided upon for implementation. ICT training measures how top management takes action to improve the capabilities of government officials to exploit the information available in the ICT applications, and to improve the ICT literacy of government officials. Easy access to networks measures to what extent the human capital is given the opportunity to access the network system and the information available within the organization. ii. External capital

Consideration of external capital applied to the customer capital and partner capital involved with the public sector. Investigations were carried out to understand the needs of the people involved, the information shared, and the interaction that involved customers and partners in delivering satisfactory services.

The criterion variable for external capital is how top management acts upon the

needs of customer capital and partner capital. The variable explains the action taken by top management so that the administrative innovation implemented in the public sector considers the satisfaction of the users, namely customers and partners. Their satisfaction will lead to improvement of the reputation of the public sector. The measurement scale ranges from 1 to 5, where 1 = not effective and 5 = very effective.

Three explanatory variables were developed to explain the criterion variable,

namely how government officials perceive top management practicing informal interaction with the customers, working closely with the customers and allocating the ICT infrastructure that supports their needs. Practicing informal interaction means that

86

top management takes action to interact with the customer in informal ways, such as dialogues and other non-official activities, so that the customers feel free to share information about their needs for better services. The information is important so that administrative innovation takes the requirements of the customers into consideration. Working closely with customers measures to what extent top management is institutionalizing the customers as part of the organization. An example of an activity that involves customers is holding meetings about policy where a representative of the customers can be consulted during the discussion or even be an active participant of the discussion. ICT infrastructure that supports customer needs measures to what extent top management creates networks that incorporate the customers. An example includes creating electronic facilities for funds transfer and tender applications for procurement.

iii. Decision-making

Usage of ICT applications in an organization will increase the availability of data and information that can then be used for decision-making purposes. The criterion variable for decision-making is how significantly top management’s use of a systematic management chain in making a decision in an organization, because applying ICT applications in the public sector can affect the management style that later affects the decision-making. Interaction with the human capital in the organization also involves the structural capital of the organization. The scale measures from 1 to 5, where 1 = not significant at all and 5 = very significant. In this study, five components of decision-making were applied as explanatory variables, namely whether the decisions are open to all levels of management, whether decision-making is made after regular meetings with workgroups, or by consensus within the top management, whether suggestions by government officials are taken on board, and ICT as a tool for decision-making.

Openness to all levels of management measures to what extent government

officials from different levels of management are involved in the decision-making process. A higher level means that government officials are given better opportunities to put forward ideas for administrative innovation. Consensus within top management measures how top management gets its consensus before making a decision to implement administrative innovations in the public sector. Suggestions by government officials refer to the extent to which top management considers the ideas for administrative innovation that come from government officials. Regular meetings with workgroups is a measure of to what extent top management is involved in the process of administrative innovation before making a decision for implementation. A high score

87

means that top management is involved in the activity by way of regular meetings with the workgroups, so as to understand more about the activity before deciding on implementation. ICT as tools for decision-making measures the extent to which ICT contributes information for decision-making processes in the public sector. 6.4 Analysis and discussion

In this section, regression analysis was applied to explain the relationship between the criterion variable and the explanatory variables of internal and external capital and decision-making. i. Internal capital’s influence on the use of information for administrative

innovation Regression analysis was performed between the criterion variable and the four

explanatory variables, as discussed in Section 6.3 (i) with the results shown in Table 6.1. The analysis found that the adjusted R2 = 0.49 with t-value significant at p<0.05 and F (4, 321) = 77.61, significant at Sig. = 0.001. All four explanatory variables were found to be significant in the regression analysis. Practicing open concepts contributes 36% of the criterion variable (sensitivity to the needs of government officials) significant level of Sig. < 0.05 with t-value of 6.67. Promoting motivation (24%), easy access to networks (22%) and ICT training (14%) had t-values of 4.92, 2.13 and 2.58 respectively.

Table 6.1: Influence of internal capital

Standardized Coefficient t value Sig.

Promoting motivation 0.24* 4.92 0.00 Practicing open concepts 0.36* 6.67 0.00 ICT training 0.14* 2.58 0.01 Easy access to networks 0.22* 2.13 0.03 Criterion variable: sensitive to the needs of government officials * Significant at p < 0.05

The findings suggest that structural capital is important as a tool for interaction

amongst the human capital. An open management style, implying free interaction between all levels of the management hierarchy, contributes to administrative innovation activity. Government officials used information from the ICT and, being involved in innovation activity, were freely able to come up with ideas to take to top management. These findings support the argument that a low level of employee

88

supervision is needed for administrative innovation. Open management will allow the flow of information to all levels of the hierarchy.

ICT training is a basic need for government officials because their skill and

involvement in ICT will develop with their working experience. They need motivation from top management to get them involved in administrative innovation. Easy access to networks will encourage them to exploit the information available from the applications that will later be used as input for administrative innovations. Government officials can acquire more information if they are given better opportunities to access what is available from the ICT applications.

Figure 6.1: Perceived contribution of internal capital

Perceived Contribution of Internal Capital

0.00 20.00 40.00 60.00 80.00 100.00

Promote motivation

Open concept

ICT training

Access network

Var

iabl

e

Percentage (%)

High levelLow level

The explanatory variables measure to what extent top management is sensitive

to the needs of government officials, as explained in Section 6.3 (i) of this chapter. It was found that most of the respondents perceived that top management appreciates the needs at a high level (moderate extent, major extent and great extent), thus encouraging them to innovate. The respondents perceived that top management encourages motivation (85.89%), practices open management (92.21%), offers ICT training to government officials (84.21%) and grants access to networks (77.91%), as shown in Figure 6.1.

The basic requirements of government officials, for encouragement in the use

of information available in the ICT applications for administrative innovation, were found to be complementary. ICT training will contribute to better literacy in using the ICT applications. With easy access to ICT, government officials will be exposed to more

89

information that will in turn contribute to more ideas being generated for administrative innovation, and this is motivated by top management. The ideas that come from government officials can be put forward to top management because, structurally, the organization is practicing open management. ii. External capital’s influence on the use of information for administrative

innovation Regression analysis was performed between the criterion variable and the three

explanatory variables, as discussed in Section 6.3 (ii) of this chapter, with the results shown in Table 6.2. The analysis found that the adjusted R2 = 0.51 with t-value significant at p<0.05 and F (3, 322) = 112.11, significant at Sig. = 0.001.

From the analysis, it is found that all three explanatory variables are significant at the level of Sig. < 0.05. Informal interaction with the external capital contributes 38%, working closely with the customer 34%, and ICT infrastructure that supports the customer’s needs 13%, of the variance for the needs of customers and partners with t-values of 7.79, 5.99 and 2.60 respectively.

Table 6.2: Influence of customer capital

Standardized Coefficient t value Sig.

Informal interaction 0.38* 7.97 0.00 Working closely with customers 0.34* 5.99 0.00 ICT infrastructure supporting customer needs 0.13* 2.60 0.01 Criterion variable: Reacting to the requirements and needs of the customer * Significant at p < 0.05

The findings suggest that information from the external sources that contribute

to administrative innovation activity in the public sector can be acquired by having informal interaction with customers and partners. Information from the external domain is an important input for administrative innovation activity, so that the product of the innovation has had the needs of the customers and partners taken into account. The information can be shared between government officials and the customers and partners as a result of the interaction and by way of informal activity.

The information can also be shared by way of formal interaction, where the

public sector can work closely with the external capital. Customers and partners can be

90

invited to be members of official meetings so that their needs can be considered in a more formal context.

The ICT infrastructure in the public sector must support the needs of the

customers for efficiency and accuracy. Uncertainty and quality issues can be identified from adequate, accurate and timely information exchange between the organization and its customers and partners, and the administrative innovation activity that results will therefore be improved.

Figure 6.2: Perceived contribution of external capital

Perceived contribution of external capital

0.00 20.00 40.00 60.00 80.00 100.00

ICT infrastructure

Work with customer

Informal interaction

Var

iabl

e

Percentage (%)

High LevelLow Level

The explanatory variables measure to what level they are effective for meeting the needs of the customers and partners, as explained in Section 6.3 (ii) of this chapter. It was found that a high percentage of the respondents perceived high levels (sometimes effective, effective and very effective) of informal interaction (94.12%), working closely with customers (92.17%) and ICT infrastructure (93.25%), and these contribute to the use of information for administrative innovation activity in the public sector, as shown in Figure 6.2. Respondents perceived that top management must take action on the three explanatory variables to acquire information using their external capital because of the high level of effectiveness of the acquiring of information for innovation activity.

The involvement of customers and partners in administrative innovation activity will result in the creation of new services that take their needs into account. Customers and partners are themselves a source of information from the external

91

domain and they play an important role in ensuring that the new services will fulfill their needs. As stressed by Finch (1999), the first category of the customer is at the upper stream, where the customer acts as information input party and becomes part of an organization’s innovation activity as both resource and co-creator. At the lower stream, the customer acts as the user of the innovative services. The networks between the organization and the customer complement each other where the customer, as the source of information, contributes to the emergence of new services by the public sector. The involvement of the customer in the innovation activity as the source of information also contributes to shortening the development time of the new services, because information that is lacking can be acquired from the customer during the innovation activity process (Campbell and Cooper, 1999). In order to optimize its customer and partner capital, as a source of information that can contribute to innovation activity, the management has to institutionalize its relationships by encouraging government officials to work closely with the customers, and by promoting informal interaction and an ICT infrastructure that support the needs of the customers and partners. As a result, this will further develop the networks with customers and partners and lead to more information being acquired for innovation activity. iii. Decision-making processes that influence the use of information for

administrative innovation Regression analysis was performed between the criterion variable and five

explanatory variables, as discussed in Section 6.3 (iii) of this chapter, with the results shown in Table 6.3. The result of the analysis found that the adjusted R2 = 0.62 with t-value significant at p<0.05 and F (5, 320) = 107.62, significant at Sig. = 0.001.

Table 6.3: Factors influencing decision-making

Standardized Coefficient t value Sig.

Open to all levels of management 0.16* 3.58 0.00 Regular meetings with workgroups 0.28* 5.89 0.00 Consensus but decided by top management 0.28* 6.08 0.00 Suggestions by government officials 0.30* 6.71 0.00 ICT as tool for decision making 0.05 1.16 0.25 Criterion variable: systematic management chain * Significant at p < 0.05

From the analysis, four of the explanatory variables were found to be

significant at Sig. < 0.05, namely decision-making that involves suggestions by

92

government officials, amounting to 30% of the overall decision-making process, consensus decided by top management (28%), regular meetings with workgroups (28%) and openness to all levels of management (16%), with t-values of 6.71, 6.08, 5.89 and 3.58 respectively.

The explanatory variables measure to what level they are significant for

decision-making, as explained in Section 6.3 (iii) of this chapter. It was found that a high percentage of respondents perceived that four of the explanatory variables have a high level of significance (somewhat significant, significant and very significant) in relation to decision-making, as shown in Figure 6.3.

Figure 6.3: Perceived contribution of decision-making

Perceived contribution of decision-making

0.00 20.00 40.00 60.00 80.00 100.00

Open to all level

Regular meeting

Consensus

Suggestion

Var

iabl

e

Percentage (%)

High LevelLow Level

From the analysis, 84.66% of the respondents perceived that suggestions from

government officials have a high level of significance in explaining the systematic management chain for decision-making. This implies that government officials perceived that their suggestions for administrative innovation have to be considered for implementation by top management. The suggestions may come from all levels of the management hierarchy (80.06% of the respondents gave a high level of significance), and the decisions by top management should be arrived at through consensus (92.02% of the respondents gave a high level of significance). Nevertheless, the respondents perceived that top management has to work in conjunction with workgroups (85.89% of the respondents gave a high level of significance) so that the activity is understood by top management.

93

6.5 Conclusion Managerial factors affect the innovation capability of government officials.

They affect the use of the information available and the creation of innovative ideas for administrative innovation activity. Internal factors involve the needs of government officials in cases where the management needs to promote the innovation activity. The innovative ideas from them can be put forward to top management when the latter practice an open type of management. Government officials also need access to the network in the organization, and training that can improve literacy so that they can increase their penetration of ICT applications in the network. These factors will improve the innovation capability of government officials because of the extra exposure to information that can promote more administrative innovation activity.

External factors also influence the acquiring of information for administrative

innovation activity. The information can be acquired from customers and partners by way of informal interaction. Other means of acquiring information from external sources are by considering the customers and partners as part of the organization and introducing ICT applications that support the needs of the customer. The roles played by external factors will result in the sharing of information that can contribute to innovative ideas for administrative innovation activity in the public sector.

The third managerial factor that influences administrative innovation activity in

the public sector is the process of decision-making. Public sectors at all levels need their creative ideas to be considered by top management for implementation. This can be done by way of consensus, with the final decision being made by the top management. To make the right decision, top management has to understand the innovation by having regular meetings with the workgroups involved.

From the managerial point of view, internal capital, external capital and

decision-making can promote administrative innovation in the public sector. The people involved need the chance to promote their innovative ideas, which result from information gained from ICT applications, freely to top management. The structural capital that allows interaction between all levels of the management hierarchy also promotes innovative ideas to be decided for implementation by top management. The interaction with the external capital must be institutionalized in an organization so that the information acquired can be utilized as the source of administrative innovation. Promoting informal interaction and considering customers and partners as part of the

94

organization can contribute to the sharing of information that can it be used for administrative innovation activity. The results suggest two findings: i. So as to promote administrative innovation in the public sector, decision-

making processes must take consideration of the innovative ideas that come from government officials at all levels. Ideas from all levels, in terms of innovative suggestions, should be considered by consensus for implementation. The top management, the authority in the public sector, should make the decisions on implementation. This means that the process of decision-making also involves the structural capital of the public sector.

ii. In order to make the right decision on the implementation of an administrative innovation, the top management must understand the innovation. This means that top management has to work closely with the workgroup behind the innovation by having regular meetings and discussions about the innovation activity that is being carried out. This is important because top management needs the right information during the decision-making process.

95

CHAPTER 7 INFLUENCE OF INFORMATION AND LENGTH OF ICT USAGE ON

INNOVATION CAPABILITY

7.1 Introduction

The objective of this chapter is to investigate whether government officials are capable of using the information available in the ICT applications and transforming the information into knowledge to be used for administrative innovation activity in the organization. As stressed by Abell and Oxbrow (2001), the value of information is inherent in its use, and its effective use depends on the ability of an individual to see the meaning and significance of the information, thus creating new knowledge. Knowledge, on the other hand, is equally lacking in value unless it is used. Carvalho and Ferreira (2001) explain that data in the form of transmitted information may immediately generate new knowledge in one receiver, or merely temporary information in another, or noise (lack of sense) in a third. Hence, the capability of carrying out the administrative innovation activity in the organization depends on the capability of government officials in using the information as knowledge for the administrative innovation activity, which can be illustrated by the expression below:

Innovation capability depends on information from ICT and knowledge

To investigate the relationship between innovation capability, information

acquired from the ICT applications and the knowledge gained as the result of transforming the information, a model is applied as illustrated by Figure 7.1.

The purpose of this chapter is to examine the characteristics of ICT usage and the involvement of information and knowledge for administrative innovation activity, which is influenced by the innovation capability of government officials. The innovation capability of government officials is found to be influenced by six factors involving the characteristics of ICT usage and knowledge captured from ICT usage. The innovation capability is also influenced by the length of using the ICT applications at the workplace as a result of the enrichment of information. The implication is that more services should be provided by using ICT applications. This, in turn, will increase their usage by government officials. This will improve their innovation capability for developing better services in the future.

96

Strategic Internal/External Factor

Figure 7.1: Conceptual model of innovation capability

The model explains the influence of the usage of the ICT applications, information acquired from using the ICT applications, the knowledge that results from transforming the information and its use for administrative innovation activities. The administrative innovation activities depend on the innovation capabilities of the government officials.

7.2 Measurement indicators and variables

As explained in Chapter 4, multiple regression analysis was conducted to investigate the innovation capabilities of government officials, where the dependent variable used is ‘I involved actively in innovation project at the workplace’, a proxy to innovation capability. The scale ranges from 1 to 5, where 1 = not significant at all involved in innovation activity and 5 = very significant involved in innovation activity, thus measuring the innovation capabilities of the respondents. A higher score signifies that the respondents have developed better innovation capabilities.

The following indicators have been developed to represent the use of ICT

applications and knowledge, act as the independent variable for innovation capability.

i. Frequency of using ICT applications (ICTF) is the measurement of how frequently government officials use ICT applications at the workplace. The measurement used, indicating the degree of frequency of using the ICT application, ranges from 1 to 5, where 1 = almost never and 5 = almost always. The implication from applying this explanatory variable is to capture government official’s level of exposure towards the information available in the

Information acquired

Usage of ICT Application

Administrative innovation activities

Knowledge captured by

government officials

Innovation capability

97

application. ii. Level of literacy (ICTL) is the measurement of capability of the respondent for

getting information from the ICT applications. In this survey, the measurement used to indicate the level of literacy of the respondent ranges from 1 to 5, where 1 = very low and 5 = very high. The implication of applying this explanatory variable is that the level of literacy will reflect the level of penetration of the ICT applications, which shows to what extent government officials can retrieve the available information.

iii. ICT use that improves job performance (ICTP) is the measurement of how the

respondent perceives that the usage of ICT applications could improve their job performance in the organization as a whole. The ICT applications allow government officials to retrieve information to be used to perform their job, provide help for decision-making, share information with other government officials, retain information and perform other functions. In this survey, the measurement used to indicate the level of how significant are the ICT applications that can improve job performance ranges from 1 to 5, where 1 = not significant at all and 5 = very significant. The higher the level of significance, the better the respondents perceived that they were capable of using the information to improve job performance.

iv. Knowledge that contributes to improve the working system (KnI) is an

explanatory variable that measures how significant the knowledge captured by government officials is in terms of its contribution to new processes and procedures. The measurement used in this survey ranges from 1 to 5, where 1 = not significant at all and 5 = very significant. A higher level of significance means that more knowledge that contributes to administrative innovation capability has been created from the information acquired by government officials.

v. Knowledge from ICT can be captured either through experience of using the

ICT or training in using the ICT applications. Knowledge captured by experience rather than training (KnE) is the measurement of to what extent the knowledge captured from experience of using ICT applications has been used for the administrative innovation activity. Compared to training, knowledge

98

captured from experience of using an ICT application is accumulated and it is an on-going processes. Knowledge captured varies according to the experiences of the respondent. The measurement used in this survey ranges from 1 to 5 where 1 = not at all and 5 = great extent. The higher the level of knowledge captured from experience of using the ICT, the better the innovation capability of the respondent.

vi. Benefiting from knowledge gained (KnB) as the result of transforming the

information acquired from using the ICT applications is a measurement of how capable government officials are using the knowledge for innovation activity. The measurement ranges from 1 to 5, where 1 = not applicable and 5 = not aware.

vii. Information can be used in many ways depending on what kind of innovation

(service or process) it is and how it is going to be used. Skill is needed to use the knowledge for innovation. The knowledge captured through ICT usage may contribute to the creation of skills for administrative innovation activity. The explanatory variable of knowledge that contributes to skill creation (KnS) is the measurement of how significant is the skill created by using an ICT application at the workplace for administrative innovation activity. The measurement used in this survey ranges from 1 to 5 where 1 = not significant at all and 5 = very significant.

7.3 Case Study 2: Influence of information on innovation capability In this case study, the variables identified in Section 7.2 of this chapter were used to gain an understanding of how information is acquired and how knowledge results from the transformation of information and then influences the innovation capability of government officials. Hypothesis H1 is used to test whether information acquired as the result of ICT usage at the workplace by government officials is used in innovation activity. To prove this hypothesis, a regression method was applied to identify whether the variables that explain information, that is the ICTF, ICTL and ICTP, are significant in the analysis. Factors of knowledge that act as the moderator in the administrative innovation activity are applied in the regression analysis. From the regression analysis, accepting the hypothesis means that the information has been used and knowledge is the moderator in

99

the administrative innovation activity. The ability of government officials to use the information and knowledge is indicated by their innovation capability. 7.3.1 Multiple regression analysis

Multiple regression analysis was applied to investigate the innovation capability of government officials. The result of the analysis is shown in Table 7.1. Three significant explanatory variables for the prediction of innovation are: frequency of using an ICT application at the workplace, level of literacy, and the ICT application used for improvement. A second model was conducted to evaluate the knowledge captured from ICT usage predicted for innovation, as shown in Model 2 of Table 7.1. Three measurements of knowledge accounted for a significant proportion of innovation variance after controlling for the effects of ICT usage at the workplace. From the analysis of Model 2, adjusted R2

2 = 0.49, with t-value significant at p < 0.05.

Table 7.1: Result of the Two Ordered Multiple Regressions

Model Explanatory variable Standardized Coefficients

t

Sig.

Frequency of using ICT 0.25* 4.89 0.00 Level of literacy 0.22* 4.22 0.00 1 ICT promoting improvement of performance 0.32* 6.77 0.00 Frequency of using ICT (ICTF) 0.18* 4.05 0.00 Level of literacy (ICTL) 0.17* 3.60 0.00 ICT promoting improvement of performance (ICTP) 0.14* 3.14 0.02

Benefiting from knowledge gained (KnB) 0.03 0.51 0.61 Knowledge from ICT for improvement (KnI) 0.22* 3.63 0.00 Knowledge gained from experience (KnE) 0.19* 4.32 0.00

2

ICT improved skill (KnS) 0.15* 2.67 0.01 Adjusted R2

2 = 0.49 F change = 46.29 at Significant level Sig. = 0.001 * Standardized coefficient significant at Sig. < 0.05

Further analysis found that the level of collinearity among the explanatory

variables allows the analysis to be accepted. Gujarati (2003) noted that collinearity is an issue about level of degree and not the presence or absence between the variables. The level of collinearity can be detected by, amongst others:

i. Eigenvalues and condition indexes where the condition index is the

100

square root of the ratio between the maximum Eigenvalue and the minimum Eigenvalue. A condition index higher than 30 indicate severe collinearity and 10 to 30 indicates moderate to strong collinearity.

ii. Tolerance and variance inflation factors where tolerance is the inverse

of the variance inflation factor. A variance inflation factor exceeding 10 indicates that the variable is highly collinear. A tolerance closer to zero indicates a greater degree of collinearity and the closer the tolerance is to 1, the greater is the evidence that the variable is not collinear with other variables.

From the analysis, it is found that the condition index of the variables ranges

from 1.670 to 3.207, the tolerance of the variables ranges from 0.425 to 0.837, and the variance inflation factor ranges from 1.194 to 2.351. This implies that the collinearity is at the lowest level that allows for the acceptance of the analysis.

This result rejects the null hypothesis and accepts the hypothesis H1, explained

in Chapter 4, that government officials acquire information for administrative innovation activity. The information that is acquired is later transformed into knowledge, implying that the variance of knowledge captured is positively associated with administrative innovation activity. Results suggest that the greater the usage of ICT and the knowledge that is thus acquired, the greater the innovation capability that can be represented as follows:

Innovation capability

= 0.18 ICTF + 0.17 ICTL + 0.14 ICTP + 0.22 KnI + 0.19 KnE + 0.15 KnS (4.05) (3.60) (3.14) (3.63) (4.32) (2.67)

where t-values are in parentheses.

From the above relationship, the innovation capability depends on the manner of usage of ICT and the knowledge captured from usage of ICT. The manner of use of the ICT is explained by the three explanatory variables, namely the frequency of use (ICTF), literacy (ICTL) and ICT use that improves job performance (ICTP). Three types of knowledge captured and owned by government officials can contribute to innovation capability, namely knowledge that can improve the working system (KnI), knowledge

101

captured by experience of usage rather than training (KnE), and knowledge that contributes to skill creation (KnS). Knowledge is captured as the result of information received from the use of ICT at the workplace. 7.3.2 Discussion

From the analysis it was found that the innovation capability of government officials depends on the manner of usage of ICT applications and the knowledge that is the result of transforming the information for use in administrative innovation activity. The innovations involve the creation of new services in the public service, to be used by other participants in development. The public sector, as the focus of resources, policies and incentives for the R&D activities of the other participants, innovatively creates new services contributed by government officials. i. Influence of frequency of using ICT applications on innovation capability

Frequency of using ICT applications (ICTF) is found to be significant and contributes 18% of the innovation capability of government officials. From the survey, it was found that 88.6% of the respondents are at the level of high frequency of using ICT applications at the workplace (frequently, very frequently and almost always used), as shown in Table 7.2. The higher the level of frequency of using ICT applications at the workplace, the higher the innovation capability of the respondents because they were exposed to more information from the ICT applications.

Table 7.2: Distribution of respondents according to frequency of ICT usage

Frequency Level

Almost Never Occasionally Frequently Very

Frequently Almost Always

Respondent (%) 1.8 9.5 22.7 24.8 41.1

The innovation capability of government officials can be improved by

increasing the content and applications used by the public sector. As the content and applications are increased, the frequency of using the ICT applications will increase because the nature of the job requires government officials to use the applications. A lessening or absence of the content and applications will result in non-optimization, or lack of use of the ICT facilities available in the public sector.

ii. Influence of level of ICT literacy on innovation capability

Level of literacy (ICTL) was found to be significant, contributing 17% to the

102

innovation capability of government officials. From the survey, it was found that 90.2% of the respondents are at the moderate to very high level of literacy, as shown in Table 7.3. Increasing the ICT literacy of government officials will increase their innovation capability because greater literacy will influence the penetration to the applications available in the public sector.

Table 7.3: Distribution of respondents according to literacy level

Literacy Level Very Low Low Moderate High Very High

Respondent (%) 2.1 7.7 58.3 24.5 7.4

To increase the literacy, training and retraining is important, especially for

government officials with very low and low literacy. This action plan was mentioned in the ICT policy where intensification of human capability is the focus for overcoming the deficit in the supply of human resources in ICT.

iii. Influence of ICT on improving job performance for innovation capability

ICT usage that improves job performance (ICTP) contributes 14% to the innovation capability of government officials. From the survey, it was found that 99.7% of the respondents perceived that the ICT applications could improve the performance of the organization at the level of somewhat significant to very significant, as shown in Table 7.4.

Table 7.4: Perceived level of significance for job performance

Perceived Level

Not Significant

At All

Not Significant

Somewhat Significant Significant Very

Significant

Respondent (%) 0.0 0.3 9.2 60.7 29.8

This result implies the importance of the availability of ICT applications in the

public sector because the information is easily retrieved and transmitted, and directly improves the job performance of government officials.

iv. Influence of knowledge on improving the working system for innovation

capability Information acquired from the use of ICT at the workplace can be converted to

103

knowledge when it is used to produce other services. Knowledge that contributes to improving the working system (KnI) was found to be significant, contributing 22% of the innovation capability of government officials. From the survey, it was found that 96.8% of the respondents perceived that the knowledge captured from information is at the level of significant to very significant when used for the improvement of the working system, as shown in Table 7.5. This implies that government officials are using the information acquired from the ICT applications to improve the present working system for serving the public, including the participants involved in economic and technological development.

Table 7.5: Perceived level of significance for improving the working system

Perceived Level

Not Significant

At All

Not Significant Significant Somewhat

Significant Very

Significant

Respondent (%) 0.6 2.5 19.9 56.7 20.2

v. Influence of experience of using ICT on innovation capability

Knowledge from ICT can be captured either through experience or training in the use of the ICT applications. Knowledge captured by experience rather than training (KnE) was found to be significant, contributing 19% of the innovation capability.

Table 7.6: Perceived level of knowledge captured by experience

Perceived Level Not At All Minor

Extent Moderate

Extent Major Extent

Great Extent

Respondent (%) 0.6 4.3 32.5 47.5 15.0

From the survey, it was found that 95.0% of the respondents perceived that

their knowledge gained from experience of using ICT applications is at the level of moderate extent to great extent of contributing to administrative innovation, as shown in Table 7.6. This result confirmed that the experience of using the ICT applications can contribute to knowledge creation. By increasing their experience, government officials will be exposed to more information that can then be transformed into knowledge. This experience can be achieved by using the ICT applications in the course of performing their daily jobs as opposed to while being trained. To increase the experience, more content and applications are needed by the public sector.

104

vi. Influence of skill on innovation capability Skill is needed to use the knowledge for administrative innovation activity. The

explanatory variable of knowledge that contributes to skill creation (KnS) was found to be significant, contributing to 15% of innovation capability. From the survey, it was found that 95.1% of the respondents perceived that ICT applications are highly significant in contributing to skill creation for administrative innovation, as shown in Table 7.7.

Table 7.7: Perceived level of significance for skill creation

Perceived Level

Not Significant

At All

Not Significant

Somewhat Significant Significant Very

Significant

Respondent (%) 0.0 4.9 23.9 53.4 17.8

7.4 Factor of length of ICT usage that influences the enrichment of

information The innovation capability of government officials depends on the usage of ICT and the transformation of information into knowledge. This implies that the more access government officials have to the ICT applications, the more information they will acquire, and this depends on the length of time of using ICT at the workplace (Md. Nor and Mitomo, 2005a). The length of time of using ICT applications may influence experience, skill and use of the information for improving performance in administrative innovation activity.

One objective of this study is to investigate the influence of length of time

using ICT applications at the workplace on the innovation capability of government officials. This investigation is done to prove the hypothesis, H2, that the length of using ICT applications at the workplace is positively related to innovation capability of government officials, as in Section 4.4 of Chapter 4. 7.4.1 Methodology, measurement and indicators

To investigate the influence of length of ICT usage at the workplace on innovation capability of government officials, a comparison is made with the length of time working as government officials. This is used for comparison because the information acquired may vary, depending on whether or not government officials are using the ICT applications at the workplace.

105

The survey involved the sample as described in Section 5.5 of Chapter 5. To examine how the length of experience of ICT usage in the workplace influences innovation capability, an analysis of mean was applied between the length of ICT usage and innovation capability. Significant differences between the mean values for administrative innovation activity indicate that there is a relationship between the length of ICT usage and innovation capability.

To find the trend of the relationship between the length of time of ICT usage and innovation capability, the mean value of every indicator for innovation capability (ICTF, ICTL, ICTP, KnI, KnE and KnS) was obtained, as illustrated by Figure 7.2.

Figure 7.2: Model for mean analysis

The mean value is computed according to the range of years. Computation of the mean value according to every range of years will result in an index that measures the innovation capability according to each range of years. The measurements of the length of time of using the ICT applications and length of working as government officials range from 1 to 5 where:

• 1 = 1 to 5 years, • 2 = 6 to 10 years, • 3 = 11 to 15 years, • 4 = 16 to 20 years and • 5 = more than 20 years.

Factors • Length of ICT usage • Length of working

Mean value for each indicator of innovation capability • ICTF • ICTL • ICTP • KnI • KnE • KnS

Mean analysis

106

The result of the computation defines the relationship between the length of time of ICT usage and length of working as government officials. Differences in the trend between the two factors imply that there are different sources for the enrichment of information that influences innovation capability for administrative innovation activity.

7.4.2 Analysis and discussion

The characteristic distribution of the respondents, according to length of ICT use and length of working as government officials, is shown in Figure 7.3. From the descriptive analysis, the length of ICT usage was found to be highest (54.60%) for 1 to 5 years and reduced to 1.53% for 16 to 20 years. None of the respondents have experience of using ICT applications for more than 20 years because the ICT applications were only introduced for general use in the public sector in the 1980s.

Figure 7.3: Distribution of respondents according to length of ICT usage and

working

Distribution of respondent

0.0010.0020.0030.0040.0050.0060.00

1-5 years 6 - 10years

11 - 15years

16 - 20years

More than20 years

Range of length

Perc

enta

ge (%

) Use of ICTapplications

Working as publicservant

Nevertheless, the length of working as government officials is well distributed

for all ranges. This implies that the respondents involved in this investigation are a good representation of government officials from the aspect of working experience.

The high percentage of respondents using ICT applications for 1 to 5 years is

contributed by 178 respondents and the distribution is shown in Table 7.8. Most of the contributors have a working experience of 1 to 5 years (100 respondents) and this represents 100% of the respondents working for that length of time.

107

Table 7.8: Contributor to usage of ICT according to working experience Working as government

officials Usage of ICT applications (years)

Range (years) Respondent 1-5 6-10 11-15 16-20 More

than 20 1-5 100 100 0 0 0 0 6-10 54 21 33 0 0 0 11-15 50 14 21 15 0 0 16-20 42 13 23 3 3 0 More than 20 80 30 35 13 2 0

Total 326 178 112 31 5 0

Further analysis of the level of ICT literacy of the respondents with 1 to 5 years’ use of ICT applications found that they have a high level of literacy, as shown in Table 7.9. When the literacy level is indicated by the type of ICT applications used (high level for usage of multimedia and networks), it was found that more than 50.00% of the respondents are at a high level of usage of the applications for high literacy.

Table 7.9: Literacy level of respondents with 1 to 5 years of using ICT applications

Percentage of respondents ICT usage Word

processing E-mail Website Multimedia Networks

Low level usage 6.74 30.90 35.39 50.00 37.08 High level usage 93.26 69.10 64.61 50.00 62.92

i. Influence of length of time of ICT usage on innovation capability

It is found that the innovation capability of government officials is positively related to their length of time of ICT usage. The relationship between how long they have used ICT applications and their innovation capability is identified by computing the mean value of every significant indicator of innovation capability, as in Section 7.3.1 of this chapter. The result of the computation is shown in Table 7.10 for length of time of ICT usage and length of working as government officials.

From the result, the hypothesis H2 is accepted where there is a positive

relationship between innovation capabilities and the length of experience of ICT usage at the workplace. But, in contrast, there is no identified trend when comparing the relation between innovation capability and the length of working as government

108

officials.

Table 7.10: Computation for innovation capability

Fr

eque

ncy

(I

CT F

)

Lite

ratu

re

(IC

T L)

Perf

orm

ance

(I

CT P

)

Impr

ovem

ent

(Kn I

)

Expe

rienc

e (K

n E)

Skill

(K

n S)

Coefficient 0.18 0.17 0.14 0.22 0.18 0.15

Inno

vatio

n C

apab

ility

Length of ICT usage Mean value 1-5 yrs 3.73 3.09 4.08 3.83 3.73 3.71 3.84 6-10 yrs 4.11 3.35 4.29 3.93 3.66 3.93 4.02 11-15 yrs 4.45 3.90 4.42 4.45 3.81 4.16 4.37 16-20 yrs 4.40 4.20 4.80 4.60 4.20 4.40 4.61 More than 20 yrs 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Length of working as government officials Mean value 1-5 yrs 4.13 3.34 4.24 4.01 3.83 3.86 4.06 6-10 yrs 3.78 3.35 4.11 3.98 3.56 3.91 3.93 11-15 yrs 3.88 3.28 4.16 3.68 3.58 3.66 3.84 16-20 yrs 3.95 3.26 4.31 3.98 3.71 3.86 3.99 More than 20 yrs 3.84 3.14 4.17 3.95 3.79 3.88 3.94

It was found that the innovation capability increases gradually from 3.84 to

4.61 for respondents who have used ICT for a period of 1 to 5 years and 16 to 20 years respectively. The relationship is clearly illustrated in Figure 7.4. The gradual increase of innovation capability is the result of information acquired by government officials. More information is acquired as the length of time of using ICT applications at the workplace increases. This will enrich government officials with information that contributes to the innovation activity they are involved in.

In contrast, the investigation on length of working as government officials

shows an absence of any identified trend as the innovation capability fluctuates unevenly. Comparing the two cases clearly indicates that the use of ICT applications at the workplace contributes to the enrichment of information for the creation of administrative innovation, as the length of using the ICT applications increases.

109

Nevertheless, investigating innovation capability by using the length of working contributes to the scores ranging from 3.84 to 4.06, as in Table 7.10, which means that working experience also influences innovation capability.

Figure 7.4: Comparison of innovation capability

Comparison of Innovation Capability

3.0

3.5

4.0

4.5

5.0

Less than5

6 to 10 11 to 15 16 to 20 More than20 Length (yrs)

Inno

vatio

n C

apab

ility

k

Length ofICT usageLength ofworking

Further investigation shows that there are other sources of information, apart

from what is captured from ICT usage in the workplace. In this study, a question was put to the respondents about how effective the interaction is between respondents and customers as regards the sharing of information. The interaction to be considered is face-to-face communication between government officials and the customer. The information from the customer is delivered to government officials and is used as an input for the development of new innovative services.

From the descriptive study, it can be seen that interaction with customers at a

high level of effectiveness (sometimes effective, effective and very effective) had a positive trend in relation to the length of working, as shown in Figure 7.5. It is clear that interaction with customers contributes effectively to the enrichment of information. A high percentage of respondents who had worked for not more than ten years perceived a high level of effectiveness for interaction with customers because they were among government officials who worked at the operational level, providing services and interacting directly with the external customers. This result also supports the finding that the external capital is to be considered as a source of information for administrative innovation activity in the public sector, as in Section 6.4 (ii) of Chapter 6.

110

Figure7.5: Percentage of respondents with a high level of effectiveness

Percentage with High level of Effectiveness

7580859095

100

less than5

6 to 10 11to 15 16 to 20 More than20 Length of Working (yrs)

Perc

enta

ge Interactionwithcustomer

The percentage is lowest for respondents who had worked for 11 to 15 years

because of their position at the workplace. Hierarchically, they were at the level of middle management, supervising subordinates rather than dealing with external customers, which is a general phenomenon in Malaysia. As the length of working career increases beyond 15 years, government officials are promoted to higher levels in the management hierarchy, and are more likely to be involved in policy making and other related responsibilities at the workplace. At this level, again, government officials will interact with external customers who will contribute information as a source of administrative innovation activity. 7.5 Conclusion Government officials in Malaysia are involved in using ICT applications at the workplace. The use of ICT applications at the workplace is not substantially influenced by management level or nature of the job. The results confirm that government officials are involved in administrative innovation activity. The information acquired from the ICT applications is used as source for contributing to administrative innovation activity. The information acquired by government officials from the ICT applications is not influenced by the nature of the job and level of management hierarchy.

The characteristics of using ICT applications influence innovation capability in

the public sector. The frequency of using the ICT applications, the level of ICT literacy of government officials and how they perceive that the use of ICT could improve performance at the workplace, influence the acquiring of information from the ICT applications. These three factors affect government officials in exploiting the information in the ICT applications that can contribute to innovation capability.

111

The information acquired by government officials is transformed into knowledge, as the moderator, to be used in the administrative innovation activity. Knowledge about how to use the information that can improve the working system, knowledge captured by experience of using the ICT applications rather than by training, and knowledge that contributes to skill, affect the innovation capability of government officials. Without knowledge, government officials are not using the information for administrative innovation.

From this framework, one of the actions that can be initiated to increase

innovation capability in the public sector is to intensify the ICT applications that are appropriate to the services provided by the public sector for public use. On the supply side, the services to be used by the public in the form of digital content should be initiated through use of the ICT applications. By providing these services, government officials will be forced to use the ICT applications in the process of performing their responsibilities at the workplace. From the user’s point of view, this content and services will force the public to use the ICT applications to obtain services from the public sector. By creating the scenario whereby the supplier and the user complement each other, the result will be the sharing of vast amounts of information, much of which will be acquired by government officials, and this will contribute to the increase of their innovation capability.

From the investigation, it was also found that the time factor affects the

capability of government officials to innovate, where the amount of experience of using the ICT applications influences their innovation capability. The length of time of using ICT contributes to the enrichment of information acquired from the ICT applications by government officials. The enrichment of the information, in turn, increases the innovation capability of government officials.

These findings support the view that action must be taken to intensify the

service provided by the public sector in the form of ICT applications. It is recommended that those services currently offered by the public sector should be transformed into digital services, so that government officials are forced to use the ICT applications as alternative services. That, in turn, can contribute to increasing innovation capability as the experience of usage increases.

112

CHAPTER 8 USAGE OF ICT APPLICATIONS IN THE MALAYSIAN

RESEARCH INSTITUTES

8.1 Introduction

For Malaysia to self-sustain its economic and technological development, networks have to be established among the participants involved, namely the public sector, private sector and industry. The researchers in the GRI and PRI play important roles in producing new products and processes that need to be commercialized.

ICT development and expenditure have increased every year since the

introduction of ICT in Malaysia, and show the presence of networking and the sharing of information. As explained in Chapter 3, Section 3.4, comparing the number of R&D projects in the research institutes in Malaysia with R&D expenditure and ICT expenditure, the reduction of expenditure on every project is a signal that the researchers are sharing information through the networks. The presence of outsourcing expenditure is also triggering the sharing of information.

The development of ICT has been relied upon to promote sustainable economic development in Malaysia. To date, the private sector has played the key role in contributing to the economic and technological development of the nation. The private sector, consisting of export-orientated MNC in manufacturing and trading, was the result of economic liberalization and funding incentives in Malaysia. The advanced technology, imported by the MNC and operated in Malaysia, produces new products and processes through the R&D activities at the PRI.

The purpose of this chapter is to investigate the diffusion level and purposes of using ICT applications in the research institutes (GRI and PRI) as the result of utilizing services and acquiring information from the public sector and the general public by using ICT applications. It is found that the diffusion level and the purposes of using ICT applications for the sharing of information vary depending on the research institutes. The availability of information limits the diffusion of the ICT applications. The implication is that intensification of ICT usage by the public sector and the general public for dissemination of information and providing services will lead to the sharing of information that, in turn, will encourage R&D activity.

113

8.2 Role of ICT applications for the sharing of information Self-sustained economic and technological development can be realized

through the establishment of a network, because the network acts as the economic activity to internalize the effects of transmitted information (Metcalfe, 1995). The result of the network is an increase in the number of members (researchers) that are capable of producing, diffusing and absorbing the information for the R&D activity (Foray, 2004). The network that is supported by the presence of the ICT applications will be established if the ICT applications are diffused to the researchers and act as the communication channel for the sharing of the information, as defined by Rogers (1995) and explained in Chapter 2, Section 2.5.

Carvalho and Ferreira (2001) stressed that ten types of software support the sharing of information. Of the ten applications, six are covered in this investigation, namely intranets, electronic documents, groupware, workflow, portals and innovation support software.

Intranets use private networks in ways that may facilitate the sharing of dynamic and linked information. The communication within an intranet is usually passive because the user has to pull down the information, thus emphasizing that it is internal information in a closed organizational environment. The importance of the intranet in an organization is to create a link between management and employees and between employees. It is designed for basic information access such as the retrieval of corporate documents. The system is like the Internet but can only be accessed by authorized members of the organization.

Electronic document systems are repositories of important corporate documents. The information embedded in the documents is stored electronically to be retrieved by members of the organization. The contents of a document, when retrieved by a member of an organization, may contribute to and generate office activities. Because of its ability to present information from various sources via electronic documents, such a system encourages the exchange of information throughout the organization. The documents stored in electronic document systems may include the reports, memos and various other documents owned by an organization.

Groupware is designed to help members who are dispersed geographically but

who need to work together. It involves not only technical aspects, but also social aspects

114

in an organization. It has a push style, where information is sent to users in synchronous (chat), asynchronous (e-mail) and community-focused (e-group) ways. In a groupware environment, the communication is dominated by informal communication where the user feels free to exchange opinions and collaborate in a near face-to-face interaction with other users.

Workflow is a system that supports standardized business processes. The

processes are in an ordered and structured form where the information flows from person to person, place to place and task to task, so that each activity that comprises the process can be followed and each step tracked. As a result of the formatting process, the information embedded during the process is made explicit to the user. Processing an application involving several members of organization in the decision-making is an example of using a workflow system.

Innovation support tools are software used in the product-design process to

create a virtual environment as part of the process of R&D. The software used to acquire the existing information, in terms of a technical database, is where patents, articles and research projects are recorded in order to apply them to a new context. Graphic simulation is an example of an internalized information process, where the user is able to gain experience of using the tools.

Portals are used to integrate heterogeneous information sources and present a

standard interface to the users. In the portal, information from various departmental intranets is consolidated. The classification of the information of an organization in the portal enables easy retrieval of information. By integrating the information in a single tool, users can interact virtually with others and share common interests. The researchers can acquire information by using these applications and, as a result of the usage, the applications can be diffused among the researchers at the research institutes. Acquiring the information from these applications means that the applications act as the communication channel from the domain to the researcher for the sharing of information. As the researchers acquire the information, it is used for the purpose of the R&D activity. The more the information is shared by the researchers, the better will be its contribution to R&D activity. The sharing of information varies depending on the needs for information of the various researchers. As a result, the diffusion of the applications also varies between different research institutes.

115

8.3 Methodology and measurement In this section, an explanation is given about the methodology and

measurements used in the investigation of diffusion of ICT applications, in Section 8.3.1, and purposes of using ICT applications, in Section 8.3.2.

8.3.1 Diffusion of ICT applications

To investigate the diffusion of ICT applications in the GRI and the PRI, the six applications mentioned in Section 8.2 of this chapter were considered. To measure the level of diffusion of the ICT applications in both types of research institute, the Linked Chain Model (as explained in Chapter 2, Section 2.2), was applied. In the Linked Chain Model, five levels of innovation development were used as the measurement of the diffusion of ICT applications, namely market finding, analytic design, design and test, redesign and produce, and commercialization, as level 1 to level 5 respectively.

Figure 8.1: Conceptual framework for diffusion

By incorporating the definition of diffusion suggested by Rogers (1995), the

predominantly used ICT application for a level of innovation development is considered as the level of diffusion. The relationship between the use of the application and the

Groupware

Workgroup

Electronic Documents

Intranets

Innovation Support Software

Level 1 Market Finding

Level 2 Analytical Design

Level 3 Design and Test

Level 4 Redesign and Produce

Level 5 Commercialization

ICT Applications Innovation Development Level

Diffused

Portals

116

level of the innovation development is illustrated in Figure 8.1.

The conceptual framework shows that as the researchers acquire information from the six ICT applications, the applications are diffused. Knowing which ICT application is the predominantly used for each level of innovation identifies the diffusion. In the investigation, the predominantly used applications can be identified through questionnaires designed to see how the researchers perceive that an ICT application is predominantly used for every level of innovation development.

From the above explanation, it can be seen that the ICT applications most used at different levels of innovation development by the researchers at the research institutes will prove the hypotheses H3, as mentioned in Chapter 4, Section 4.4. Rewriting the hypothesis:

H3 GRI and PRI have different levels of diffusion for each ICT

application.

Figure 8.2: Model of analysis for diffusion

Frequency of ICT use at research

institute

ICT application used for a level of

innovation development

Dependent Variable Independent Variable

Establishment for diffusion of ICT in Malaysian GRI

Use of ICT applications in the Malaysian research

institutes

117

To determine the predominantly used ICT application for a level of innovation development, mean analysis was applied where the frequency of using an ICT application acts as the dependent variable, and the innovation development acts as the independent variable, as illustrated in the model of analysis in Figure 8.2. The measurement of the frequency of using ICT ranges from 1 to 5, where 1 = almost never used and 5 = always used.

In the analysis of mean, the significant value Sig. < 0.05 for the use of the ICT application at every level of innovation development means that there are different mean values of usage of the ICT application. This will reject the null hypothesis and accept the hypothesis H3 for different levels of innovation development. By accepting the hypothesis, the descriptive distribution of researchers who perceive the predominantly used ICT application at a level of innovation, will identify the diffusion of the ICT application. 8.3.2 Purposes of using ICT applications

To investigate the purpose of using ICT applications, indicators of using the six ICT applications were designed to act as the independent variable, and the frequency of use of the applications acts as the dependent variable. The measurement of frequency of using the ICT applications ranges from 1 to 5, where 1 = almost never used and 5 = always used.

Ten indicators were designed, representing the six ICT applications used in this

investigation, to act as the tools for acquiring information in the process of information development for R&D activity in the institutes. ICT use for making contact with experts is an indicator for portals. By acquiring information about an expert, a network can be developed and information can be shared between the researcher and the expert. Sending and receiving e-mail are the indicators for groupware where the information flow promoted by the application is asynchronously interactive. The indicator representing the use of workflow is the continuation of the research process that involves a step-by-step process of innovation development. As the process proceeds, the information from the earlier stage will flow to the next stage of the innovation development and be acquired by the researcher involved in that process. Retrieving and storing reports and data are the indicators for using electronic documents and intranets. When reports and data are retrieved or stored, the information available from the report or data can contribute to the sharing of information among the researchers. The result is

118

that the researcher shares the available information with others in the process of acquiring information for R&D activities. Two indicators representing the use of innovation support software are the use of software for design and simulation. By using this application, researchers will interact and other researchers will acquire the information. In the questionnaire, respondents were asked about their use of ICT applications in the form of statements about the ten indicators. The measurement of the indicators ranges from 1 to 5, where 1 = strongly disagree and 5 = no opinion. The answers given by a respondent will indicate how they perceive that the information is shared by way of using ICT applications.

Regression analysis was applied to investigate the purpose of using ICT

applications illustrated by the model of analysis, as shown in Figure 8.3, to prove the hypothesis H4, as explained in Chapter 4, Section 4.4. Rewriting the hypothesis:

H4 GRI and PRI have different purposes of using ICT applications in

terms of the frequency of the usage.

Figure 8.3: Model of analysis for purposes of using ICT applications

Interpretations of the regression were carried out by comparing the significant coefficients and t-values of the indicators, thus showing the relative importance of these indicators to the model. From these results, variations of purposes of using ICT applications can be investigated between GRI and PRI, and comparisons can be made between the two types of research institutes.

Frequency of usage Regression

Indicators representing ICT applications

• Portals – 1 indicator • Groupware – 2 indicators • Workflow – 1 indicator • Electronic documents and

intranets – 4 indicators • Innovation support software – 2

indicators

119

8.4 Case Study 3: Diffusion of ICT applications in the GRI and PRI This case study was reported as Md. Nor and Mitomo (2006), mentioned as

Case Study 3 in this dissertation. The objective of the study is to investigate diffusion of the ICT applications in

the GRI and PRI and to address the research problem mentioned in Chapter 1, Section 1.4. The diffusion results from using the ICT applications during the process of acquiring information from the public sector and public users as part of R&D activity in the research institutes. The acquiring of information by the researchers in both types of institute is for the purpose of acquiring information for the R&D activity. The information accumulated by the researchers at each level of the process contributes to the completion of a level and proceeding to the next level of the innovation development process.

This study involved a total of 463 projects that were carried out by the respondents in the period of the last three years before the survey. GRI contributed 261 projects and PRI contributed 202 projects.

Table 8.1: Distribution of product types

Type of product (%) Research Institute

Goods Services Processes GRI 47.13 61.11 55.62 PRI 52.87 38.89 44.38

GRI and PRI are two different entities based on the activities carried out, where

GRI as the public sector focuses on services and processes but PRI, as a business entity, focuses on product goods. From the survey, GRI scores 61.11% for services and 55.62% for processes whereas PRI scores 52.87% for goods, as shown in Table 8.1.

8.4.1 Influence of research institutes on diffusion

Mean analysis is applied to identify the differences in using ICT applications at different innovation development levels. From the analysis, GRI is significant at Sig. < 0.05 and the F-value ranging from 3.27 to 6.82. The reliability test found that the coefficient alpha is 0.77 with F-value at 42.48 where the respondents are consistently answering the questionnaire. The analysis of mean for PRI is significant at Sig. < 0.05 with the F value ranging from 2.63 to 3.29. The reliability test shows the coefficient

120

alpha value of 0.64. From the analyses, there are differences in the mean scores for ICT applications for different levels of innovation development. It is also found that the use of ICT applications is different for different levels of innovation development. This means that the diffusion levels vary according to different types of ICT applications, and hypothesis H3 is accepted.

Table 8.2: Level of diffusion of ICT applications

M

arke

t fin

ding

Ana

lytic

al

desi

gn

Des

ign

and

Test

Red

esig

n an

d Pr

oduc

e

Com

mer

cial

Portals Overall

GRI PRI

Groupware Overall PRI GRI

Workflow process PRI Overall GRI

Electronic documents Overall

GRI PRI

Intranets Overall

GRI PRI

Innovation support software

Overall GRI PRI

Further analysis found that the diffusion of the ICT applications vary between

the two types of research institute, as shown in Table 8.2

The overall tendency shows that portals are diffused at the level of market finding, with a score of 103 respondents. The same tendency shows for GRI and PRI with scores of 66 and 37 respondents respectively. This implies that the researchers in both types of research institute shared and used the information available from the portal that contributes to initiating R&D activity.

The overall tendency of groupware was to diffuse to the level of market finding,

with a score of 61 respondents. The same tendency is shown by the PRI with a score of 36 respondents. GRI shows groupware diffused at the level of commercialization with a

121

score of 25 respondents. Use of groupware in PRI contributes to person-to-person contact, implying that the researchers in PRI are doing more networking and sharing of information when compared to GRI at the level of market finding.

At the commercialization level, the ICT applications diffused for GRI are

groupware and intranets but it is only intranets for PRI. This implies that at the commercialization level, researchers in GRI are sharing information within the organization via intranets and by groupware beyond the organization’s boundaries. In contrast, only intranets are being used in the PRI, implying that information about commercialization is shared only within the organization. This result is supported by the interviews carried out with 15 respondents from GRI, where the researchers faced the problem of commercialization and they needed more information from beyond the organization. Interviews with five respondents from PRI found that information is shared within the organization where the marketing department is involved, and intranets support the dissemination of the necessary information.

The workflow process is diffused at the level of analytical design for PRI and

at the level of redesign and produce for GRI. Electronic documents are diffused at the level of analytical design for both types of research institute. From both these findings, it is clear that PRI, as business entities, have undergone R&D activity that is based on products that were previously on the market. As a result, the researchers in PRI used the information about previous products, available from the electronic documents, for new products and applied the workflow process involving a series of processes for an analytical design. In contrast, the GRI used electronic documents during the analytical design stage, and the workflow process during the redesign and produce stages. The innovation support software that involved the use of computer-aided design and simulation was diffused at the level of design and test for both GRI and PRI, with scores of 47 and 31 respondents respectively.

8.4.2 Influence of research institutes on purposes of using ICT applications

Investigating the purpose of using ICT applications by applying the ten indicators shows that the purposes depend on the type of research institute. The model used in the regression analysis was found to be significant with R square of 0.74 and F-value of 127.70 for GRI, and R square of 0.86 with F-value = 190.00 for PRI at the significance level of Sig. < 0.05 for PRI, as shown in Table 8.3. From the analysis, the null hypothesis is rejected and the purposes of using ICT applications are different in

122

GRI and PRI as described by hypothesis H4.

Table 8.3: Purposes of using ICT applications GRI PRI Use of ICT

application Beta t-value Sig. level Beta t-value Sig.

level ICT to make contact with experts 0.19* 5.36 0.00 0.23* 6.69 0.00

To post information using e-mail -0.03 -0.52 0.60 0.02 0.51 0.61

To receive e-mail 0.04 0.71 0.48 0.13* 3.14 0.00

Continue the research process 0.22* 3.55 0.00 0.26* 5.26 0.00

Retrieve report information -0.24* -3.08 0.00 0.06 0.95 0.35

Retrieve data information -0.16 -1.35 0.18 -0.03 -0.51 0.61

Store report information 0.06 0.78 0.43 -0.14* -2.52 0.01

Store data information 0.18 1.79 0.07 -0.14 -1.89 0.06

To use software for design 0.25* 2.80 0.01 0.27 1.92 0.06

To use software for simulation 0.43* 4.58 0.00 0.39* 3.22 0.00

R Square 0.74 0.86 F-value Sig. at 0.05 127.70 190.00 * Significant at 0.05 level

Comparing the two types of research institute, sharing information is by using

portals, groupware, workflow and innovation support software, but with different values of beta. Portals have been used for sharing information in both types of research institute, but using groupware was found to be significant for PRI. In both types of research institute, information is needed from other organizations and networks have been developed with experts in certain fields. Those networks are beneficial for information gathering. Using portals was found to be more relevant to PRI with a higher coefficient of 0.23 compared to GRI with a coefficient of 0.19. However, groupware is only significant for PRI with a coefficient of 0.13 and is not significant for GRI.

123

The use of workflow for innovation development that involves step-by-step processes was found to be significant for both types of research institute. A researcher with a partially processed product disseminates the information and it is analyzed by other researchers at the next stage. The subsequent researchers develop more information for the R&D activity. Workflow is relatively important in both types of research institute with coefficients of 0.22 for GRI and 0.26 for PRI. The use of innovation support software contributes most to the information flow, with the highest coefficient for both types of research institute. The use of innovation support software for simulation was found to be significant in GRI, which contributes 43% weighting compared to 39% for PRI. Information flows interactively as the researchers use the software for simulation as part of the process of product development.

Table 8.4: Usage of electronic documents at the level of analytical design

Number of Projects (last 3 years) Research Institute

Goods Services Processes GRI 19 44 33 PRI 18 38 21

Indicators representing the use of electronic documents and intranets, which

involve the information available from a repository system, were found to have a negative coefficient and t-value in both types of research institute. In GRI, it was found that the use of electronic documents and intranets did not encourage the retrieving of documents from the repository system of the organization, with a significant negative coefficient of -0.24 and t-value of -3.08. Furthermore, the results from PRI showed that the use of electronic documents and intranets did not encourage the storing of newly produced reports in the repository system, with a significant negative coefficient of -0.14 and a t-value of -2.52. Further analysis found that at the point of diffusion for electronic documents at the level of analytical design, services and processes were found to need the greatest use of electronic documents, as shown in Table 8.4.

Theoretically, when the frequency of ICT use is increased, the relationship with the information acquired from the use of electronic documents tends to be positive. In Section 8.4.1 of this chapter, it is shown that the respondents perceived that electronic documents were diffused at the level of analytical design. But when the respondents were asked about the purpose of using ICT applications, positive trends were not likely. In both GRI and PRI, the respondents perceived the use of electronic

124

documents to have had a less important role in affecting the sharing of information. Even using the electronic documents were most dominant at the analytical design stage, it is unlikely to contribute information to the R&D activity.

Further analysis was done to identify the factor that contributes to the negative

coefficient for use of electronic documents. To address this issue, the measurement of the independent indicators, where the range is from 1 to 5, where 1 = strongly disagree and 5 = no opinion, is reduced to two, namely disagreement and agreement, during the analysis. Disagreement represents strongly disagree, disagree and no opinion about the use of electronic documents to share information at the level of innovation development. Agreement represents agree and strongly agree.

Table 8.5: R&D projects involving electronic documents

GRI (Retrieving electronic

documents to share information)

PRI (Storing in electronic document

format to share information) Frequency of

using electronic documents

Disagreement Agreement Disagreement Agreement Almost never 0 0 0 0 Occasionally 2 1 0 0 Often 3 37 0 17 Almost always 12 123 4 131 Always 63 20 45 5

From the analysis, it is found that the negative coefficient in GRI is contributed

by a high percentage of R&D projects (28.7%) where the researcher perceived a high frequency of ICT usage (almost always and always used) but disagreed that retrieval of electronic documents contributed to information for R&D, as shown in Table 8.5. In PRI, the negative coefficient is contributed by the high percentage of R&D projects (24.3%) where the researcher perceived a high frequency of ICT use (almost always and always used) but disagreed that the storing of information as electronic documents contributed to information for R&D.

This finding shows that the researchers accessed electronic documents but the

information available from those documents did not make a productive contribution to the projects undertaken by the respondents. This complex inter-relationship resulted from the information in the repository system that was unavailable for use as references

125

for future R&D activity. Thus, it was unlikely to be contributing to the sharing of information through the use of electronic documents. As a result of the less availability of the information that is required, the researchers cannot acquire it from the use of electronic documents.

Table 8.6: Factors motivating the initiation of R&D projects

GRI PRI Factor No. of

Projects % No. of Projects %

Demand in the market 31 11.9 64 31.7Applications from individual parties 9 3.4 7 3.5 Applications from public sector 79 30.3 37 18.3Applications from IHL 27 10.3 5 2.5 Applications from private sector 17 6.5 14 6.9 Own initiative 10 3.8 8 4.0 Science and technology development 80 30.7 38 18.8Other 8 3.1 29 14.4

Total 261 202

An analysis of the factors that motivate R&D projects supports the finding that there is sharing of information between institutions in Malaysia. In this investigation, eight factors that contribute to motivating the initiation of R&D projects were put to the researchers. The results clearly show that there is sharing of information in the R&D projects between the GRI and PRI, as shown in Table 8.6.

In GRI, most of the activities (30.7%) were motivated by science and technology development. Nevertheless, 30.3% were motivated by applications from the public sector, 10.3% from the IHL and 6.5% from the private sector. In PRI, the highest number of activities (31.7%) was motivated by the presence of demand in the market and 18.8% were based on science and technology development, in addition to 18.3% motivated by applications from the public sector, 6.9% from the private sector and 2.5% from the IHL. The presence of R&D projects initiated by applications from other institutions is evidence showing that the information is being shared between the institutions involved. The presence of factors that motivate a researcher before initiating a project implies that the information needed by the researcher has come from various sources. The information from various sources contributes to the information sharing for the R&D activity by the researcher.

126

8.5 Discussion Preceding R&D activity in the GRI and PRI, information is needed from

various sources. The interaction between the researchers as the social system, by using the ICT applications as the communication channel, can contribute to the acquiring of information and, in turn, can contribute to R&D activity in the research institute.

Figure 8.4: ICT usage in GRI for commercialization

In GRI, the diffusion of ICT applications contributes to the sharing of information but the use of intranets is unlikely to contribute information to the researcher. At the level of commercialization, the point of diffusion of intranets is found to be irrelevant for the sharing of information. Figure 8.4 illustrates the relationships of information sharing that influence the acquiring of information in GRI.

The model explains that the researcher is using the intranet for acquiring information at the level of commercialization in the GRI. But the document from the repository system fails to act as the source of information for the researcher due to the lack of available information in the repository system that is relevant, in terms of production, to the researcher. As a result, the researcher uses groupware to establish a network with the external domain. This model is especially relevant at the level of commercialization. The unavailability of the information in the repository system shows a lack of sharing of information from the actors in development. Thiruchelvam (2004) noted, similarly, that GRI need more information for the commercialization of a product when compared to the private sector. The argument is also supported by Hii (2003) in his study of commercialization of GRI’s R&D products. He pointed out that the root cause of modest commercialization is the low rate of interaction between academia, PRI,

Researcher

in GRI

Actor

Repository system

Intranet Less sharing of information

Groupware

127

industry and government agencies. During the commercialization processes, more networking is needed and the research must lead to commercialization. In this study, the needs of research that lead to commercialization can be identified through the process of market finding. From the above explanation, it is clear that the use of repository systems in the research institutes should be intensified. To further enhance the sharing of information between the research institutes and the participants in development, all GRI must establish repository systems that are networked to all researchers in the field. The use of the repository systems would be open not only to the researchers, but also to other participants in economic and technological development. The actors should also be encouraged to use repository systems to disseminate information about the needs of a new technology. Institutionalization of the use of the repository systems should be organized in the GRI. Policies should be designed and promoted to liberalize the research institutes’ repository systems so that permitted external users can access the systems of the research institutes with a certain degree of security, and the level of repository system that can be accessed by the public can be determined. With liberalization, larger networks will be established that will increase the benefits of the networks for the researchers and other participants. The public sector can play important roles in easing the issues of commercialization. The public sector can initiate administrative innovation services to help the commercialization of R&D products from the GRI by introducing electronic ways of disseminating information in the public domain.

In PRI, intranets are diffused to the level of commercialization. Researchers store information in the repository system of their research institute and the marketing department later uses that information. Nevertheless, the marketing department does not use the repository system to store information that can be used by the researchers, as illustrated by Figure 8.5. As a result, the researchers perceive that use of the intranet is unlikely to contribute to information sharing for the researchers. The researchers do not think that they will acquire useful information as a result of information storage in the intranet.

From the above explanation, it is clear that the sharing of information can be encouraged and promoted by the use of repository systems in PRI. Use of repository

128

systems as tools for storing information about R&D and products should be institutionalized not only in GRI, but also in PRI for the dissemination of information that can contribute to information sharing by the researchers involved in R&D activities.

Figure 8.5: ICT usage in PRI for commercialization The establishment of total ICT facilities in institutions is supported by the policies that have been agreed. Government policies and incentives structures have been designed to promote the use of ICT so that information can be shared amongst the participants. Incentives given are both financial and non-financial, as mentioned in Chapter 3, to encourage the institution to be innovative in its use of ICT. The funding structure also supports the establishment of repository systems in an institution. The activity of creating a repository system that suits an institution will promote the ICT sector to grow, as mentioned in ICT policy. To complement the availability of the repository system, the researcher will benefit from the networking of the application. As a result, the user can access more domains of information and become the enabler, as explained in the ICT policy. 8.6 Conclusion

Six ICT applications considered in this study are diffused at different levels of innovation development in GRI and PRI. The use of the ICT applications is for the acquiring of information by researchers during R&D activities in the research institutes.

The diffusion of ICT applications varies according to the level of innovation

development. It varies as the result of the availability of information from the

Researcher

in PRI Marketing

Department

Intranet

Less sharing of information

Intranet Repository

System

129

applications and the contribution an application makes to the acquiring of information for R&D activity in the research institutes. Portals and groupware were found to be the ICT applications that are used by the researchers to acquire information for market finding. The use of portals and groupware transmits information from external sources. Acquiring information from the external sources contributes to the sharing of information from the market, which signals the need for new products that should be researched by the researchers. Groupware is diffused to the level of commercialization in the GRI because the researchers in the GRI need more information from the external sources when compared to the PRI, where researchers need to share information with their marketing departments for commercialization. Hence, intranets are diffused to the level of commercialization in the PRI where a network is established within the institute. Workflow, electronic documents and innovation support software are diffused to the level of analytical design, design and test and redesign and produce, which are the actual product development stages after market finding and before the commercialization of the product.

Study of the purpose of using ICT applications found that the use of portals,

groupware, workflow and innovation support software act as major contributors to the sharing of information. Researchers acquire information to be used in the R&D activity. Nevertheless, the use of intranets in GRI seems unlikely as the preferred communication channel for commercialization because the information available from intranets is unproductive as far as the research activity in GRI is concerned.

From this study, it can be seen that the institutionalized usage of intranets and

electronic documents has to be established in both types of research institute. The establishment can be realized by creating repository systems in the research institutes with the support of funding and incentives that were mentioned in the ICT policy, and innovative services introduced from the public sector. By establishing a vast alternative set of applications that can disseminate information, these can promote an increase in access to the applications by the participants in economic and technological development. In aggregate, the participants will increase the benefits of the networks that promote further growth of economic and technological development.

130

CHAPTER 9 RESEARCH EVALUATION

9.1 Introduction

This chapter evaluates the findings of this dissertation. The evaluations based on the findings in Chapter 6, 7 and 8, and also the literature review.

The evaluation focuses on the achievement of the case studies addressing the issues of the sharing of information from the use of ICT applications in the public sector and research institutes in Malaysia.

9.2 The result of testing the hypothesis

This research includes four hypotheses as explained in Chapter 4, Section 4.4. All the hypotheses have been proved in this research. The hypotheses H1 and H2 being discussed in Chapter 7 and the hypotheses H3 and H4 in Chapter 8.

Analysis of innovation capability, as discussed in Chapter 7, Section 7.3.1,

shows that three independent variables for the innovation capability are significant. The three variables are the frequency of using the ICT applications, ICT literacy and the use of ICT for the improvement of job performance, which show the importance of the characteristics of ICT usage at the workplace. Accepting hypothesis H1 means that government officials are utilizing the ICT applications at the workplace to acquire information for the purpose of administrative innovation activity. The more frequent use of ICT applications by government officials at the workplace means that government officials are exposed to more information that can be used for administrative innovation. The level of literacy measures the penetration to information in the ICT applications. Better literacy will lead the respondents to penetrate various types of ICT application to

The purpose of this chapter is to evaluate the research in this dissertation. The evaluation is based on the respondents’ input and the findings of the research as discussed in Chapter 6, 7 and 8 of this dissertation. Comparisons between the findings of the research and the current status of ICT, R&D and public sector initiatives in Malaysia further validate the research. As an overall evaluation, this research achieved its objectives, and the research problems have been the acceptance of the hypotheses discussed in the respective chapters.

131

acquire more information. As a result, the information acquired by government officials leads to the administrative innovation activity supported by knowledge, experience and improvement of skills.

The innovation capability of government officials has been proved to be

positively related to the length of time of using the ICT applications, as described by hypothesis H2. The improvement of the innovation capability of government officials for this reason increases because of the accumulated information. The characteristics of the ICT applications allow the government officials to acquire more information as the length of using the ICT applications increases. This also validates hypotheses H1 and H2 within the framework of this research, where information is acquired from the ICT applications for the purpose of administrative innovation activity in the public sector. This also implies that the model for the innovation capability can be applied as a measurement in the public sector.

Hypotheses H3 and H4, as proved in Chapter 8, are accepted where the

diffusion of the ICT applications and the purpose of the usage of ICT applications vary between GRI and PRI. The hypothesis H3 means that the diffusion of ICT applications is result of acquiring information. The hypothesis H4 indicates that how the information acquired varies due to the purpose of collecting information. By applying the Linked Chain Model, the five stages of innovation development in the model can be successfully incorporated to measure the diffusion level. The availability of information in the ICT applications limits the diffusion level. The further implication is that in order to intensify the availability of information, the public sector, other participants and public users have to utilize available ICT facilities as one of the tools for sharing information, which will result in an improvement of the diffusion level.

As an overall evaluation, this research has achieved its aims by considering the

two layers of ICT usage, i.e., public sector and research institutes and accepting the four hypotheses. The findings have also answered the research problems.

9.3 ICT that promotes the sharing of information

The public sector, as the central agency, acts as the facilitator and collaborator and must be innovative in giving services to the other participants of development in Malaysia. Government officials need information from various sources for the input to administrative innovation activities. Using the ICT applications act as tools of

132

communication disseminates the information available. The efficiency of communication depends on the telecommunication infrastructure of the nation.

The liberalization of telecommunications manifests from the action taken by

Government, which reacts on the information about the need for better telecommunication infrastructure. Government intervention on the telecommunications sector thus promotes the efficiency of disseminating information by introducing better infrastructure, such as broadband, and introducing more service providers.

The findings from Case Study 1 show that government officials are utilizing

information from ICT applications for administrative innovation activity. The information is also acquired as a result of interaction with the external domain. An example of innovative activity undertaken by government officials is the establishment of various policies including the telecommunication and the ICT policies. Information has been accumulated from various sources before establishing of the policies. This example supports the findings Case Study 1. An innovative activity is a result of acquiring information from various sources.

The availability of better telecommunication and ICT infrastructure also further

promotes the sharing of information between the public sector with other participants of economic and technological development, including the GRI and the PRI. As explained in Section 8.4.2 of Chapter 8, various information is shared through the networks established throughout. From Table 8.6 in Chapter 8, it is clear that the GRI involved in R&D activity where information is shared with the other research institutions and organizations. The result is further supported by the fact that the research institutes in Malaysia have increased expenditure on ICT services (MASTIC, 2004). The expenditure records RM179.5 million in 2000 increases to RM205.2 in 2002. In 2000, GRI contributes RM22.6 million and PRI contributes RM156.9 million. In 2002, GRI contributes RM102.5 million and PRI contributes RM102.7 million. From the findings of case studies and the increase in expenditure in ICT, more information sharing is expected between the public sector and the research institutes in the future.

The intensification of the ICT applications in the public and private sectors will

result in the phenomenon of a virtuous circle of growth in all sectors. Finding from Case Study 2 shows that the frequency of ICT usage positively influenced the innovation capability of government officials. The intensification of ICT in the public sector and

133

research institutes will promote innovation capability of them. As a result of increase in innovation capability, more innovative services will be provided by the public sector to the participants of development. As the participants use the services, more demand for better services will be created and this will trigger the public sector to introduce better services and create a virtuous circle of growth. Quah (2001) supports the argument that the strong demand from the participants of the society will create a circle with a sophisticated application by the government. The finding that the frequency of ICT usage influences the innovation capability could be justified.

9.4 Intensifying local content and application

Intensifying access to ICT applications by government officials plays a role of acquiring information that will promote administrative innovation activity. The finding is substantiated by the fact there has been an increase in the number of website registration with .my domain in Malaysia, as shown in Figure 9.1. The increase in website registrations will increase the availability of information that can be accessed by the public, including the public sector, research institutes and other participants of development. This will increase the establishment of networks among them for sharing information.

An increase in the number of public sector’s websites (gov.my) will promote

the dissemination of information to the private sector and others. A similar phenomenon happens with the increase in website registrations for the private sector (com.my and net.my), other education-based organizations, military, and personal websites. The increase implies that the parties are interested in disseminating information to others to promote the sharing of information.

For government officials, the increase in websites of local organizations provides greater opportunities of acquiring external information and, in turn, could contribute to the increase in innovation capability. As for the research institutes, it means more information can be acquired that can trigger the market opportunity for new product development. These findings are supported by Kraemer and Debrick (2001), who found that creating websites for public access for services will allow the private sector the chance to use business transactions electronically by using the service of IT.

The increase in information through time (as illustrated in Figure 9.1) also

supports the finding that the innovation capability of government officials is positively

134

influenced by the period of using the ICT applications. As the length of use of ICT increases, government officials also experience an increase in accessing local information. This will increase the opportunities to be exposed to information and its experience the use of ICT applications related to local information. As a result, an increase in the availability of information will enrich government officials with information for administrative innovation activity.

Figure 9.1: Domain registrations in Malaysia

Domain Registration

0

200

400

600

800

1000

1200

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004Year

Num

ber

*.com.my (x10)

*.net.my

*.org.my

*.gov.my

*.edu.my

*.mil.my

*.name.my

Adapted from data in Table 3.4 (Source: Malaysian Network Information Center, MIMOS)

Intensifying local content and application is one of the programs in ICT policy because it can disseminate local information needed by the public sector for administrative innovative activity and, the researcher in the research institutes for R&D activity. Local information is needed by researchers in the GRI and PRI for assessing market needs at the level of market findings to the level of commercialization of new product development. As the local information increases through the years, it is expected that the output of the GRI and PRI increase. The development of local content and application is also expected to increase, as the ICT policy on education is well placed and implemented when enough people are trained in IT. Pohjola (2001) supports the argument that education creates a strong demand base when people are involved in information economy and the importance of demand side with reference to the development of IT.

135

One classic example of public domain local content and application is developed by the Malaysian National Library, where information on the database of various local economic sectors and activities include science and technology, agriculture, health and medicine, IT and multimedia, human resources, trade and commerce, education and culture are disseminated through the portal (PNM, 2000) that support the electronic initiatives of the nation. In this portal, the information including funding structure; commercialization, patents and directories for human resources in Malaysian R&D, science and technology reports and statistics were integrated. This means that accessing this portal, users can acquire vast information that can contribute to administrative innovation and R&D activities.

The five strategic trust areas as the electronic initiatives design by NITC, as in

Appendix II, also manifests the intensification of the local content and application that will enhance sharing local information for all sectors. 9.5 Diffusion of ICT for sharing information

Research institute influences the diffusion of ICT applications. The result supports the argument that the firms’ characteristics will exhibit a different adoption pattern for technology (Canepa and Stoneman, 2002). Incorporating the Linked Chain Model is to identify the level of diffusion in the research institutes. Diffusion that result from using ICT applications is supported by the action taken by the public that shows interest in disseminating information in the public domain website.

In Case Study 3, the portal has been used by researchers in GRI and PRI to

acquire information for market findings by establishing networks with expert. The findings are supported by the fact that in Malaysia, there is a national directory of human resources. The National Science and Technology Minimum DataSet (NMDS) is a national directory consisting of the names of personnel involved in science and technology activities, such as the research area, academic qualification and area of specialization and intellectual property. The availability of information about funding structure (funding for R&D activity as in Appendix III) also promotes the use of portal to initiate the R&D activity in both GRI and PRI. The portal established by the public agency shows that information disseminated by the public sector has been shared with the private sector and also research institutes.

At the level of commercialization, PRI uses intranet for the purpose of

136

disseminating information. Once again, increase in the number of domain registrations for the private sector (com.my and net.my) could promote the increase of network among the private sector for the commercialization of the product of R&D in the PRI. The current status of com.my and net.my, that records a positive growth, could trigger an expected increase in information about commercialization of new products. Local information for commercialization should be intensified to help the PRI and also GRI to commercialize the new product. In GRI, information about commercialization is acquired by using e-mail because the researchers in GRI need more information for commercialization. The general trend is that the private sector is always involved in commercializing products. An increase in the access to the private sector’s portal could ease the commercialization of products of GRI in the future.

Findings from Case Study 3 show that workflow process, electronic

documentation and software supporting innovation have diffused to the level of analytical design, design and test, redesign and production. The diffusion is the effect of the needs for sharing of information. These findings are supported by the presence of specialized software, and applications for the product development are highlighted in the R&D database portal, developed by the MDC. Portal information about the R&D database in Malaysia highlighted three areas, namely human resource, project and the facilities for R&D. The portal integrates dataset and serves as the directory of experts and facilities on CAD/CAM. The establishment of the dataset is to encourage the use of facilities for sharing information and networking. Presence of the dataset to support the use of specialized software applications could affect the sharing of information among the research institutes. The diffusion of the applications could result in a flow of information to the researcher in the research institutes. As a result, the information is acquired and shared among the researchers for the development of products. 9.6 Influence of ICT on structural reform in the public sector

Managerial factors that influence the administrative innovation activity can be evaluated by incorporating the structural formation of the public sector. Benefit from using ICT can be attributed to the structural reformation and changing in the management structure of an organization (Meliciani, 2001)

The findings in Case Study 1 show that the internal capital, external capital and

decision-making need a suitable formation of the organizations so as to promote the use of information for the administrative innovation activity in the public sector. As

137

suggested by Kramarz (2001), the adoption of new technology needs a transformation of the workplace to make an organization function efficiently in the environment of fast IT diffusion. Structurally, the formation should be that of horizontal growth so that the management chain is lessened between government officials and the top management. As for the interaction between the public user and government officials, the horizontal growth organization structure can shorten the management chain and this will not filter the information from the external capital. This is important because the information from the customer promotes the administrative innovation activity in the public sector, as argued by Gallouj (2002), that the customer, as the source of information, co-produced the innovation.

In the framework of chain management, the personnel growth rate in the public

sector in Malaysia is found to be larger for senior management, followed by middle position and, lastly, supporting staff, as shown in Figure 9.2. Higher growth rate for the senior position means that the number of personnel for top management increases faster than the lower position.

Figure 9.2: Personnel growth rate in the Malaysian public sector (2001 – 2003)

Personnel Growth Rate in Public Sector

0%

15%

30%Senior

MiddleSupport

31.12.200131.12.200231.12.2003

Source: Malaysian Civil Service Department (2005)

The purpose of taking this action by the public sector is to flatten the structural

formation of the public sector that allows the direct interaction between the lower position personnel with top management. By doing so, the structural formation of the public sector will grow horizontally and affect the transmission of information directly

138

from the lower personnel to top management for decision-making. The efficiency of the transmission of information is needed by internal and external capital, which can promote administrative innovation activity in the public sector. Strassmann (2002) argued that the government IT program fits the organization structure but private restructures need to fit the IT program. From this point of view, the public sector in Malaysia has taken some actions of restructuring the organization to fulfill the needs of ICT use.

9.7 Conclusion

Attempting to understand how the public sector acquires information for the purpose of administrative innovation activity in this dissertation is novelty, with the current status of ICT development in Malaysia showing an absence of data at the organizational or firm level. The information that comes from various sources promotes government officials to innovate for better services to be used by the public, including the participants of development and the research institutes.

From the managerial point of view, this research examines the factors, which

influence the use of information for administrative innovation activity. The findings are verified by comparing the action taken to reform the structure that will further enhance the sharing of information as ICT becomes more relevant to the public sector.

To sum up, the approach taken in this research is designed to understand how

sharing the information among the participants, including the research institutes, is valid. The important factors influencing the sharing of information are identified from case studies. The exclusive findings of this dissertation are the identification of a level of diffusion of ICT applications and purposes of using ICT applications for the acquiring of information in the research institutes. From the findings, this dissertation discovers the importance of intensifying the ICT applications that can disseminate local information, because locally developed content and application can lead to the increase of administrative innovation activity in the public sector and increase the R&D activity in the GRI and PRI.

139

CHAPTER 10 OVERALL CONCLUSION AND RECOMMENDATION

10.1 Introduction This chapter gives a summary of the overall research findings. On the whole,

conclusions are given to explain the use of ICT applications in the public sector and how the information has been acquired through the diffusion of ICT among researchers in the research institutes in Malaysia. The conclusions are based on the findings in Chapter 6, Chapter 7 and Chapter 8. As the final goal of this dissertation, recommendations are also provided on policies and action plans that could be adopted in Malaysia to increase the use of ICT for the purpose of sharing information and contributing to economic and technological development. 10.2 Summary of overall research findings

This dissertation began with an investigation of the managerial factors that influence the use of information for administrative innovation activity in the public sector. Chapter 6 examined internal capital, which comprises human and structural capital; external capital, which consists of customer and partner capital; and decision-making. Regression analysis verifies that the basic needs of government officials promote the use of information for administrative innovation. Motivation from top management, ICT training, easy access to networks and practicing open concepts lead to satisfying the basic requirements of government officials. Easy access to networks, with the support of ICT training, will lead to government officials being exposed to information. The information acquired by government officials, in turn, contributes to administrative innovation activity. The open concept will lead government officials to putting forward innovative ideas to top management for implementation. Examining the external factors, it was found that interaction with the customer, working closely with the customer and having an ICT infrastructure that supports the needs of the customer would stimulate the acquiring of information by government officials from the external

This chapter concludes the dissertation by summarizing the overall research findings. From the implications of the findings, some recommendations are proposed within the limitations of this research for the improvement of policies and action plans. Future studies are also recommended to fine-tune the findings in the areas related to ICT and R&D activity in Malaysia.

140

domain. The customer, as the external source of information, has to be considered in administrative innovation activity in order to overcome uncertainty during implementation. The third aspect of managerial factors that influence the use of information for administrative innovation activity is decision-making. This case study confirmed that government officials needed a decision-making process that was open to all levels of management and would lead to implementation by consensus, with top management making the final decision on the innovation. Top management should be involved with the workgroup to consider the ideas of government officials and to better understand the innovative ideas that are proposed.

Chapter 7 examined the role of information for the administrative innovation

activity of government officials. Regression analysis confirmed that the acquiring of information from ICT applications influenced the innovation capability of government officials. The frequency of ICT use at the workplace, ICT literacy and how the information can improve the organization’s performance leads to innovative ideas for administrative innovation activity. The information acquired by government officials is transformed into knowledge for the purpose of administrative innovation activity at the workplace. It is also confirmed that the length of time of using the ICT applications at the workplace has a positive influence on the innovation capability of government officials. The increase in innovation capability is the effect of the enrichment of information acquired by government officials at the workplace as a result of using ICT applications. The administrative innovation activity in the public sector that involves services provided by using ICT applications promotes dissemination of information for the user. The researcher working in the research institute uses the information provided for the R&D activity in the research institute.

Time series secondary data on R&D and ICT expenditure, as compared with

the output of R&D activity in the research institutes in Malaysia, showed that there was a productivity improvement between 1998 and 2002. The sharing of information between the public sector, GRI and PRI has led to the improvement of R&D activity. Chapter 8 established that information was shared between various institutions to initiate R&D developments in GRI and PRI. The institutions involved include the public and private sectors, IHL and individuals. R&D activity in GRI and PRI was also initiated by the demand present in the market and motivated by developments in science and technology. As the researchers in GRI and PRI use the ICT applications to acquire information, the applications are diffused. The diffusion varies and is influenced by the

141

research institutes. It varies as a result of the availability of information relevant to R&D activity. Portals and groupware are diffused to the level of market finding for both GRI and PRI. At the level of commercialization, groupware is only relevant to GRI but intranet use applies to both GRI and PRI. In GRI, groupware and intranet use are diffused to the level of commercialization, which implies that a vast amount of information is needed by the GRI in order to commercialize the products that result from R&D, but in the PRI it is sufficient for information to be shared within the organization by using the company intranet. Nevertheless, the application of workflow, electronic documents and innovation support software is relevant to both types of research institute for the physical development of products that involve analytical design, design and test, and redesign and produce, before the commercialization of the R&D product. Examining purposes of using ICT applications for the sharing of information confirmed that portals, groupware, workflow and innovation support software play major roles in transmitting the information. Even though intranets were used to access electronic documents, they are diffused to the level of commercialization for GRI and the regression analysis verifies that it is unlikely that they act as communication channels because the information available from intranets is not relevant, in production terms, to the commercialization of R&D products in GRI.

From the overall findings, the following summary can be offered:

i. The use of information available from ICT applications for the purpose of

administrative innovation activity is influenced by internal capital, external capital and decision-making in the public sector.

ii. The capability of government officials to use information is proved empirically

for the purpose of administrative innovation activity. The acquiring of information is positively influenced by the length of time of using the ICT applications. The model for innovation capability established in this research can be used to examine how innovative an organization is in the public sector in Malaysia.

iii. The diffusion of ICT applications in the GRI and PRI is the result of using the

applications for the purpose of acquiring information for the R&D activity. The type of research institute influences the diffusion.

142

iv. Purpose of using portals, groupware, workflow and innovation support software is for the sharing of information but, in contrast, at the level of commercialization, information from the intranet (meant to access electronic documents) is unproductive when used for commercializing the product of R&D in GRI. This implies that the availability of information limits the diffusion level.

10.3 Recommendations

The final goal of this dissertation is to put forward recommendations on policies and action plans as follows: i Public agencies undergoing restructuring programs should consider

horizontal rather than vertical growth when reforming Horizontal structural reformation growth will promote the flattening of the

organizational structure and could result in direct interaction between top management and government officials from lower down the hierarchy. As proved by Chapter 6, government officials need their innovative ideas to flow to top management via a shorter management chain and will look for the direct involvement of top management in the administrative innovation activity. In terms of external capital, top management will have direct interaction with customers and partners, which is one of the sources of information for administrative innovation, as the organizational structure flattens.

ii. Promoting R&D activity by creating one-stop agencies for funding and

incentives Local enthusiasm to get involved in R&D activity is proved by an increase in

R&D expenditure. This is supported by activities in the ICT sector that play a role in increasing enthusiasm to share information between researchers and institutions, as in Chapter 8. Local enthusiasm can also be seen from the increase in website registrations for the purpose of sharing information through the ICT applications that will improve global competitiveness. To promote further growth of R&D activity, the funding mechanisms and incentives should be managed by a single agency to ease the difficulty of public users who are looking for funding and incentives for R&D activity. This can contribute to further increases in R&D expenditure after the failure to reach the targeted spending of 2% of GERD/GDP in 2000.

The one-stop agency for funding and incentives not only affects the R&D

143

activity, as it is also important in promoting the creation of an ICT infrastructure and applications in organizations wishing to establish a larger network, and intensifies the dissemination of local information. Developing an application can be an activity for a new ICT entrepreneur, as one of the focused-on areas in the ICT policy. It is important, for the establishment of a one-stop agency, to overcome the problems of duplication of local application development by local entrepreneurs. iii. Extend government policy on incentives to create a repository system for

all sectors Incentives for ICT should be extended to all sectors with the intention of

developing a repository system within an organization. This should be promoted to increase the sharing of information with other organizations. The incentives should be given not only to the entities stated in Chapter 3, but also to other organizations in the public and private sectors. A repository system would allow an organization to keep documents electronically and ease their retrieval in the future. Sharing of information in this way will lead to the sharing of information for product development, especially at the level of commercialization. At present, sharing information by this mode is unproductive, as proved by Chapter 8 of this dissertation. Government intervention in terms of policies and action plans has to be taken so that all kinds of report, data and information accumulated should be kept within the organization in the form of electronic documents to be used in the future activity of the organization. iv. ICT investment should place emphasis on locally developed applications

The main objective of the ICT policy is to make ICT, as a sector and as an enabler, able to transform the nation into an information society by the year 2020. To achieve this goal, one way would be by developing applications in many aspects of life, including the provision of information about locally available products and technology. To develop the applications, new local entrepreneurs will emerge to become involved in the ICT sector. Considering the fact that fewer than 5.1% of R&D products from 1991 to 2000 (MOSTE, 2004) have been commercialized, applications to support the commercialization of new products should be intensified. This will lead to the achievement of borderless marketing, one of the national flagships of the MSC.

In the public sector, alternative services using digitized documents, in the form

of locally developed applications, should be made available. By having this alternative service, government officials will be forced to use the ICT applications at the workplace.

144

This will lead to increased frequency of use of ICT applications that will in turn contribute to the increase of innovation capability on the part of government officials, as proved in Chapter 7. Higher innovation capability will, in turn, create new and better services for the public.

In research institutes, availability of local information will act as a source of

information that signals the presence of demand in the market and the opportunity for commercialization, as proved in Chapter 8. The input of information is at prime importance, which comes from all levels of society. The society, enabler of ICT development, will contribute to economic and technological development and enjoy a better quality of life. 10.4 Limitations of the research

ICT development in Malaysia can be considered as being at an ‘infant’ stage, considering that robust activity in the ICT sector only started in 1996 with the establishment of MSC. As a result, this study has some limitations:

i. Micro level approach of sampling

The source of data used for the analysis is limited because ICT development is still at an early stage. As a result, this research uses a micro level sampling approach to represent the total population. Also, specific issues investigated in this research (administrative innovation activity in the public sector and R&D activity in the research institutes) did not permit the use of available data because it is likely to produce doubtful results, as explained in Chapter 4. This micro level research will allow future studies of similar issues at the firm or organization level and aggregate level, when the time series data is available. Nevertheless, this sampling approach will lead to difficulties in producing generalized conclusions. ii. Factors and indicators applied in the research

This research is an attempt to investigate administrative innovation and R&D activity that only involves the use of information that can be gained from the ICT applications available in the public sector and research institutes. This limited scope means that some significant factors will have been ignored during the analysis. iii. Framework of ICT applied in this research

This research is limited to ICT within the framework of computer-based

145

technology, which needs a cable telecommunication system as the carrier of digital information. Nevertheless, given the sophistication of computer technology that allows for various applications, this research is limited to six applications that are commonly used in the public sector and research institutes for the purpose of sharing information.

iv. Workplace as the location of investigation

This research is limited to the workplace as the location of using ICT applications. The workplace applies here because government officials serve the public, including the private sector, from the workplace, and the researchers are developing products at the research institutes using the information available at the workplace. v. Alternative method for measuring the diffusion of ICT applications

This research introduces an alternative method for measuring the diffusion of ICT applications used in the research institutes. The Linked Chain Model is incorporated as the measurement of the level of diffusion because of the structured sequence of processes involved in the innovation development. The rate of diffusion, which cannot be arrived at because of the lack of time series data, may allow for the identification of the diffusion level only by considering the dominantly used ICT applications at the level of innovation development, as explained in Section 8.3.1 of Chapter 8 of this dissertation. vi. Quantitative aspect of administrative innovation and R&D activity

This research examined the quantitative aspect of administrative innovation activity in the public sector and R&D activity in the research institutes. The lack of time series data did not permit the research to examine the qualitative aspect of those activities. Because of this limitation, there is scope for a similar study to be carried out in the future that will focus on the qualitative aspect.

10.5 Future research

Considering the limitations of the current research, the following are a few ideas that may lead to future research in this area:

i. Regulating the data mining

For the future use of data, a study to regulate the data mining is of prime importance for arriving at generic research findings. This is because the current statistical system (especially for ICT statistics) is not comprehensive enough to meet the

146

growing demand of users and to cover high technology development (DOS, 2002). ii. Network Mapping

Given the presence of information sharing among the public sector, private sector, research institutes and other users, it is recommended that a network mapping study be developed at the level of the firm and nationally, to cover different types of sector and industry. By examining the intensity of the connections between each node can ensure the tendency of sharing of information. By identifying the intensity of each node, action plans can be designed to promote the sharing of information to all nodes, including the least intensified.

iii. Macro level research

The availability of time series data can allow for a macro level study to examine the diffusion of ICT applications not only at the firm or organization level, but also at an aggregate level. As an example, sending e-mail and receiving e-mail records at the IT department of a research institute can allow for the identification of trends of using the groupware within a range of unit time. This can identify the variation of using e-mail in that institute which can lead to the formation of the S-curve of diffusion. iv. Institutes of higher learning (IHL)

In this dissertation, IHL are excluded from the analysis because of lack of data. The small number of respondents answering the questionnaire does not allow the data to be used for comparison. Any future research undertaken to further understand the same issues must take researchers at the IHL into consideration.

10.6 Final remarks

Within the framework and limitations of this research, it is proved that Malaysia is absorbing the available technology to improve the quality of life of its people by means of economic and technological development. The social implication is that Malaysia is enthusiastic about sharing information and encouraging networking among its people so as to improve and sustain the economy of the nation.

The strong support from the government by liberalizing policy, establishing a

funding and incentive mechanism and introducing innovative services, manifests the social responsibility that has to be exercised for the purpose of national development. Introducing ICT infrastructure and applications as a backdrop by the government aims

147

to bring the public to the ‘front door’ of all services. The government has the opportunity to act as the catalyst of economic and technological development by inputting information via ICT to further the progress of the social life of Malaysian people.

Technologically, diffusion reflects the exposure of society to ICT. There will be

no progress in diffusion if the ICT fails to enhance the sharing of information and if society does not provide the information through its usage of ICT. When people take advantage of ICT by providing the information, it, in turn, will enhance the sharing of information for the purpose of technological development. As the society uses the ICT as a tool for furthering prosperity, it will transform into a knowledge-based society that can self-sustain its economic and technological development, and the nation will become a developed nation, as targeted, by the year 2020.

Appendix I

148

Operational and Technical Definition ICT application

An application base on computer technology that needs a cabled infrastructure telecommunication system as the carrier of the digitalized form of information.

Administrative innovation

The emergence of new product service and procedure that have a economic value in the public sector contributed by government officials as the result of evolution, variation, disappearance, appearance, association, dissociation, formatting through intentional or unintentional activity and implemented by using ICT applications that characterized by service optimization, efficiency gains, cost reductions and improved information.

Innovation capability

The capability of government officials to perform an administrative innovation activity in the public sector as the result of using the information available from the ICT applications.

Knowledge

The ability to interpreter and apply certain information acquired form the ICT applications for the purpose of administrative innovation activity that carries certain economic value.

Local content

The locally owned and developed content by using ICT application to disseminate local information that is relevant for the interest of the community from the local community in the area of culture, language, services, technology and other areas of interest.

Diffusion

The capability of adopting a technology (ICT applications) for the purpose of acquiring information for innovation development processes identified by the ICT applications that are dominantly used in the research institutes.

Appendix I

149

Information accumulation The process of benefiting the externalities from the usage of ICT applications where information is gathered for the purpose of innovation and R&D activity.

Appendix II

150

NITC Five Strategic Thrust Areas in Malaysia The emerging world today is one that is characterized by increasing electronic

interactions in the economic, social and political spheres. The primary goal of the NITC Strategic Agenda is to effectively facilitate the migration of Malaysians and Institutional structures into the e-World. Using a people-driven approach the NITC has identified five thrust areas as its migration strategy. The five strategic thrust areas and its desired end-states are as follows:

• e-Economy • e-Public Services • e-Community • e-Learning • e-Sovereignty

1. e-Economy Under this strategic area, all sectors of the Malaysian economy are envisioned

to create value and wealth through successful participation in the emerging knowledge-driven global economy. By focusing on a knowledge-driven economy, this strategic thrust area oversees the development of the nation’s economy into one that makes optimal usage of IT and the electronic media to foster growth and global competitiveness. An e-Economy Working Group was set up to oversee the development of thrust area, headed by the Minister of International Trade and Industry.

The objectives of e-Economy are: • To support and encourage development of value creators or innovators

in knowledge economy. • To provide incentives for carriers to upgrade infrastructure and services

to rural areas. • To provide the benchmark for planning Malaysia’s advancement in the

21st century.

2. e-Public Services e-Public Services gets the Public, Private and Community Sectors to work

together in order to provide a people-oriented, customer focused services electronically. By focusing on the delivery mode, this strategic thrust area facilitates continuous improvement on the electronic delivery of public goods and services in order to meet

Appendix II

151

current and future demands of customers. An e-Public Services Working Group was set up to oversee the development the thrust area, headed by the Chief Secretary to the Government.

The objectives of e-Public Services are: • To prepare all government officials to operate effectively in e-

Government environment. • To learn from e- Public Services pilot projects for replication nation-

wide. • To learn from e-Government flagship pilot projects implementation for

replication. • To engender mindset at individual, organizational and institutional

levels for transformation to e-Malaysia. • Realign public services delivery to meet needs of clients in the

information age. • Realign policy formulation and program implementation systems to

cater for inputs from trisectoral (economic, social and political) players. 3. e-Community

e-Community strategic thrust area was charged with facilitating the interests of various communities in order to improve the quality of life. Using electronic means, communities may be able to interact and communicate although they may be geographically dispersed. By focusing on the participatory and inclusive governance processes, this strategic thrust area aims to enhance the quality of life of all Malaysians. An e-Community Working Group has been set up to oversee the development of the thrust area headed by the Minister of Energy, Communications and Multimedia.

The objectives of e-Community are: • To provide pool of funds for NITC approved projects. • To demonstrate opportunities for sustainable development in remote

communities. • On-line clearinghouse to promote global community networks discourse

on technology and social issues. • To encourage Malaysians to migrate to the e-World. • To learn form pilots for national rollout and replication. • To operational people dimension on NITA vision.

Appendix II

152

• To provide inputs to public policy formulation on ICT.

4. e-Learning Learning is the first step towards capitalizing on knowledge. This strategic

thrust area envisions the creation of formal and informal network, providing the opportunity and cultivating an ethos of life-long learning for individual organizational, institutional and societal advancement. It is expected that e-learning will the vehicle to accelerate the pace of growth of Malaysia's intellectual capital. An e-Learning Working Group was set up to oversee the development of the thrust area, headed by the Minister of Education.

The objectives of e-Learning are: • Develop local expertise in multimedia design capabilities for creating

economic value. • Support NITA vision on ICT diffusion and acculturation. • Promote the school as the hub of community learning. • Provide framework for private and community sectors to initiate

projects. • Provide learning opportunities to the population at large. • Establish a network of websites dedicated to the provision of learning

experiences. • To produce teachers that is ICT literate and competent by international

standards. • Create local content software and courseware to meet needs of

Malaysians. • Realign system through development of innovative learning modes to

meet needs of knowledge society and economy.

5. e- Sovereignty Through this thrust area, it is the surest and most constructive manner in which

the nation can secure and enhance its sovereignty in the cyber world. By focusing on building a resilient national identity, it is envisioned that citizens and institutions zero in towards enhancing national identity, integrity and societal stability in the face of borderless challenges to the nation. An e-Sovereignty Working Group was set up to oversee the development of the thrust area, headed by the Chairman of Institute of Strategic and International Studies Malaysia

Appendix II

153

The objectives of e-Sovereignty are: • Provide timely and accurate information on sensitive issues that affect

the social fabric of the nation. • Prepare officials to understand threats and opportunities and operate

effectively in the e-World. • Provide accurate information on current events to foreign and local

media. • Promote Malaysia’s interest on regional and global governance issues. • Strengthen nation’s capacity to handle threats and potential breaches of

defense and security.

Appendix III

154

Funding Mechanism to Supports R&D Activity i. Intensification of Research in Priority Areas (IRPA) Fund

Fund provided to support the R&D activity in certain thrust area. The fund is granted to the proposal submitted by the researcher or top-down approach to shift the priority area.

ii. Industry Research and Development Grant Scheme (IGS)

Fund for PRI to promote collaborative linkages R&D activity with GRI to adopt existing technology in creating new technology, product and process.

iii. Multimedia Super Corridor Research and Development Grant Scheme

(MGS) Fund for innovative local companies to develop relevant multimedia technologies and applications that will contribute to overall development of MSC

iv. Demonstrator Applications Grant Scheme (DAGS)

Fund to encourage Malaysian to adopt and customize existing IT and multimedia technologies in applications compatible with local culture and to promote the development of local software and content industries for enhanced competitiveness in global market

v. Malaysian Technology Park (TPM)

To assist the development of indigenous technologies and commercialization of R&D findings. The main role is to support industrial entrepreneurship, promote industrial competitiveness, encourage reverse engineering and accelerate technology. It also provide link between industry, the government, research institutes and universities.

vi. Malaysian Technology Development Corporation (MTDC)

A joint-venture between government and industry that focus on commercialization of local research findings, introduce strategic technologies to the country and the manufacturing of product that are widely used as industrial input. Act as catalyst and center of growing technology-based companies. It also manages the commercialization of technology fund.

Appendix III

155

vii. Human resource Development Scheme (HRDS) The setting was primarily for human resource development in the areas of R&D and higher education. The programs under the Science and Technology Human Resource Development Fund (S&T HRDF) was to create a pool of skilled and trained S&T manpower among professional and support staff of government department, pubic research institution and universities. National Science Fellowship (NSF) was created to enhance the number of skilled and qualified researchers in selected area and to create the critical mass in less-researched. HRDS also cover the area of Postgraduate and Postdoctoral Programs (PPP) meant to enhancing human resource skilled expertise in the area of advance technology, support and enhance R&D excellence among IHL.

viii. Industrial Technical Assistance Fund (ITAF)

Establish in 1990 to provide financial assistance to small and medium scale Industries (SMI) in the form of matching grant for consultancy studies, product development and design, quality and productivity improvement and market development.

ix. Malaysian Industry Government Group for High Technology (MiGHT)

Establish in 1993 consist of government-private sector initiative responsible for exploiting research and technology for new business opportunities. It also provides a channel for consultative approach to technology prospecting.

Appendix IV

156

R&D Incentives

i. Incentives for Hi-Tech Industries Special Pioneer Status / Investment Tax Allowance is granted. The package comes with full income tax exemption for five years or Investment Tax Allowance of 60% on qualifying projects. The Allowance can be offset against 100% of statutory income for each assessment year.

ii. Incentives for Non-Hi-Tech Industries Companies Granted Pioneer Status would be given partial exemption from the payment of 28% income tax. They have to pay on 30% of statutory income for five years. Any companies given Investment Tax Allowance will be granted an allowance of 60% in respect of qualifying capital expenditure incurred within 5 years from the date of approval of the project. This allowance can be utilized to offset against 70% of statutory income for each assessment year.

iii. Contract R&D Activity of a company, which provide R&D services in Malaysia to companies other than their related companies. Companies granted Pioneer Status would be full exempted from payment of full income tax for a period of five years or Investment Tax Allowance of 100% on qualifying capital expenditure incurred within a period of 10 years. The allowance will be granted at the statutory income level and abatement for each year of assessment will be limited to 70% of statutory income.

iv. R&D for associated Companies Investment Tax Allowance of 100% on capital expenditure incurred within 10 years for R&D companies. Abatement is restricted to 70% of statutory income.

v. In-House R&D Investment Tax Allowance of 50% on qualifying capital expenditure related to R&D is granted for a period of 10 years for companies carrying out in-house research. The allowance will be granted at the statutory income level and abatement for each year will be limited to 70% of statutory income.

Appendix V

157

早稲田大学国際情報通信研究科 Graduate School Of Global Information And Telecommunication Studies 1st Floor, Building 29-7, 1-3-10 Nishi-Waseda, Shinjuku-ku, Tokyo 169-0051 Japan

Survey Questionnaire

By

MD. NOR HAYATI BIN TAHIR

Knowledge Acquired as Innovation Factor: The Application and Usage Of ICT at Public Sector in Malaysia.

Appendix V

158

Knowledge Acquired as Innovation Factor: The Application and Usage Of ICT at Public Sector in Malaysia.

INSTRUCTION

This questionnaire is designed to gather information about knowledge acquired by the public servant through ICT usage at work place, which in actual fact that this knowledge had been translate by the public servant into innovation project or new idea. This questionnaire is divided into 5 sections namely

i. Section I consist of general questions ii. Section II focuses on the application of Information and Communication

Technology at your work place iii. Section III relates about knowledge spillover and captured by users iv. Section IV is about the innovation project in your organization which had

been initiated by the members of the organization v. Section V is about the organization set-up

The question in the survey is simple, all about your daily working life at your organization and environment around you. The best respondent will be a senior officer used ICT at work place and involve in innovation project and development project of the organization. It just requires the respondent to thick accordingly in the space provided after each question according to your perspective. Please complete the question because your perspective will have great impact and effect to the result of this study. All answer will be kept in confidential. I thank you in advance for your highly appreciated cooperation and support for the research. Md. Nor Hayati Bin Tahir Ph.D Candidate Global Information and Telecommunication Studies, Waseda University, Japan mdyati60@akane.waseda.jp

Appendix V

159

BACKGROUND INFORMATION OF RESPONDENT

Instructions: Please tick [/] in the appropriate space available.

1. Gender: Male Female 2. Number of years working as public servant

Less than 5 years 6 – 10 years 11 – 15 years 6 – 20 years More than 20 years

3. Academic background:

Non-degree Bachelor degree Master degree

Doctorate Others (………………………………………….)

9. Academic majoring Computer, ICT or related field

Economics, accountant, management or related field Science or science related field Engineering or engineering related field Others (…………………………………………………..)

10. How long you have been exposed to computer usage

Less than 5 years 6 – 10 years 11 – 15 years

16 – 20 years More than 20 years 11. Name of your organization

……………………………………………………………………………

SECTION I

Appendix V

160

APPLICATION OF INFORMATION AND COMMUNICATION TECHNOLOGY IN OFFICE

Instructions: Please tick [/] in the appropriate space available. 1. Computer is very important tools at my work place

Not important at all Not important Somewhat important Important Very Important 2. How long you have been using computer at work place

Less than 5 years 6 – 10 years 11 – 15 years

16 – 20 years More than 20 years 3. I used ICT application at work place

Almost Never Occasionally Frequently Very Frequently Almost Always 4. How long you have been using ICT application at work place

Less than 5 years 6 – 10 years 11 – 15 years 16 – 20 years More than 20 years 5. My level of ICT literacy at work place

Very Low Low Moderate High Very High 6. My organization have a very good ICT infrastructure

Strongly disagree Disagree Agree Strongly Agree No opinion

SECTION II

Appendix V

161

7. ICT application improved my productivity at work place Not Significant at all Not Significant Somewhat Significant Significant Very Significant 8. ICT application can improved my performance at work Not Significant at all Not Significant Somewhat Significant

Significant Very Significant 9. My work norm demand me to use ICT application at work place Very Low Low Moderate High Very High 10. I use computer at work place for the purpose of:

Please tick [/] in the appropriate space available for (i-v) in the table

11. Customer’s demand can be met by using ICT application at my work place Strongly disagree Disagree Agree

Strongly Agree No opinion

Almost Never Occasionally Frequently Very

frequently Almost Always

i. Word processing, spreadsheet

ii. E-mail

iii. Website

iv. Multimedia

v. Networking

Appendix V

162

KNOWLEDGE SPILLOVER AND CAPTURED BY USER Instructions: Please tick [/] in the appropriate space available. 1. I improved my competencies through ICT usage at work

Not Significant at all Not Significant Somewhat Significant

Significant Very Significant 2. I improved my skills through ICT usage at work

Significant at all Not Significant Somewhat Significant Significant Very Significant 3. I gained knowledge from using ICT at work

Not applicable Somewhat beneficial Beneficial

Most beneficial Not Aware

4. I used the knowledge captured to perform better output Not Significant at all Not Significant Somewhat Significant

Significant Very Significant

5. Knowledge that I gained from ICT usage improved my performance at work

Not Significant at all Not Significant Somewhat Significant Significant Very Significant 6. I gained more knowledge from experience of working compare to training. Not At All Minor Exent Moderate Extent Major Extent Great Extent

SECTION III

Appendix V

163

7. The knowledge that I gained can be used anywhere within the organization Not Effective Rarely Effective Sometimes Effective

Effective Highly Effective

INNOVATION PROJECT IN ORGANIZATION

Instructions: Please tick [/] in the appropriate space available. 1. I used the experiences gained through using ICT at work place for

improvement of doing work Almost Never Occasionally Frequently

Very Frequently Almost Always 2. I used the experiences gained through using ICT at work for improvement of

working procedure Almost Never Occasionally Frequently Very Frequently Almost Always 3. New improved procedure and working system using ICT had reduced

customers complain Not Significant At All Not Significant Somewhat Significant

Significant Very Significant

4. I involved actively in innovation project at work place

Not Significant At All Not Significant Somewhat Significant

Significant Very Significant

SECTION IV

Appendix V

164

5. I initiated innovation project at my work place. Almost Never Occasionally Frequently

Very Frequently Almost Always

6. I did innovation project on my own Almost Never Occasionally Frequently

Very Frequently Almost Always 7. I did innovation project in a group Almost Never Occasionally Frequently

Very Frequently Almost Always

ORGANIZATION SET-UP

1. ICT related issues are clearly stated in my organization’s strategic planning. Strongly disagree Disagree Agree

Strongly Agree No opinion

2. ICT increase the productivity of my organization

Not Significant At All Not Significant Somewhat Significant Significant Very Significant 3. ICT increase the efficiency of my organization Not Significant At All Not Significant Somewhat Significant Significant Very Significant

SECTION V

Appendix V

165

4. How you rate your organization’s in relation to the customer in the issues bellow Please tick [/] in the appropriate space available from (i – vi) bellow.

5. How you rate your top management in relation to the issues of personnel in

the organization Please tick [/] in the appropriate space available from (i – vi) bellow.

Not effective

Rarely Effective

Sometimes Effective Effective Very

Effectivei. React to

requirements and needs

ii. Practice informal interaction

iii. Work closely for improvement of procedure

iv. ICT infrastructure support the needs of customer

v. Interaction with professional customers

vi. Interaction with non-professional customers

Not At All

Minor Extent

Moderate Extent

Major Extent

Great Extent

i. Promote motivation

ii. Practice punishment

iii. Sensitive to the needs

iv. Practice open concept to all level of personnel

v. Training in ICT

vi. Easy access to network used at work place

Appendix V

166

6. How you rate about decision-making in the organization Please tick [/] in the appropriate space available from (i – ix) bellow.

Not Significant

At All

Less Significant

Somewhat Significant Significant Very

Significant

i. Balance between flexibility and standardization

ii. ICT infrastructure act as supporting tools for decision-making

iii. Interdependence to other departments and units

iv. Open to all level of personnel

v. Regular meeting between work-groups

vi. Systematic use of management chain

vii. Consensus seeking but major decisions made by top management

viii. Major decisions made solely by top management

ix. Suggestion by employees

Appendix VI

167

早稲田大学国際情報通信研究科 Graduate School Of Global Information And Telecommunication Studies 1st Floor, Building 29-7, 1-3-10 Nishi-Waseda, Shinjuku-ku, Tokyo 169-0051 Japan

Survey Questionnaire

By

MD. NOR HAYATI BIN TAHIR

INFORMATION DEVELOPMENT THROUGH DIFFUSION OF INFORMATION AND COMMUNICATION TECHNOLOGY: THE

EMPIRICAL STUDY IN THE MALAYSIAN RESEARCH INSTITUTES

Appendix VI

168

INSTRUCTION This questionnaire is designed to gather information about the ICT usage at workplace, which in actual fact that the information available from the ICT application contribute to the process of materializing the innovation and the R&D project. From the information gathered by this questionnaire, study about diffusion of ICT and information development will be performed. This questionnaire is divided into 4 sections namely:

i. Section I is about background information of the respondent ii. Section II focuses on the application of Information and Communication

Technology and the infrastructure at your workplace iii. Section III is about diffusion of ICT and the information development iv. Section IV is about the organization and the management

The question in the survey is simple, all about your daily working life at your organization and environment around you. The best respondent will be the researcher who involve in innovation and R&D project in the organization. It just required you to fill in the blank or thick accordingly, in the space provided in each question. Please complete the question because your perspective will have great impact and effect to the result of this study. All answer will be kept in confidential. I thank you in advance for your highly appreciated cooperation and support for the survey. Md. Nor Hayati Bin Tahir Doctoral Candidate Global Information and Telecommunication Studies, Waseda University, Japan mdyati60@akane.waseda.jp

Appendix VI

169

Background Information of the Respondent

Instruction: Please fill in the blank or tick [/] in the appropriate space available.

1. Name of organization: ……………………………………………………………. 2. Gender: Male Female 3. Age: …………. years 4. Nationality: ……………………………. 5. Number of years working as public servant: ……………. years. (Public sector

only) 6. Number of years working in this organization: ………………years 7. Work as a/an

researcher administrator

technician supporting staff

8. Academic qualification:

Non-degree Bachelor degree

Master degree Doctorate

SECTION I

Appendix VI

170

9. Academic majoring (Please tick the related academic major in the first column and write the specific majoring in the third column). Computer, ICT or related field

Economics, accountant, management or related field

Science or science related field

Engineering or engineering related field

Others

ICT Infrastructure and Application at the Workplace Instruction: Please fill in the blank or tick [/] in the appropriate space available. 1. I have been exposed to computer for …………………... years 2. I have been using computer at workplace for ……………………. years 3. ICT application is very important tools at my work place

Strongly disagree Disagree Agree Strongly Agree No opinion 4. I have been using ICT applications at workplace for ………………years 5. I have a personal communication facilities at workplace as below:

(Can choose more than one communication facilities)

Telephone Internal networking connection

Fax machine Internet connection

Computer Video Conferencing

SECTION II

Appendix VI

171

6. The communication facilities that I have to share with others at workplace: (Can choose more than one communication facilities)

Telephone Internal networking connection Fax machine Internet connection Computers Video conferencing

7. I use computer and communication facilities at workplace for the purpose of:

(Can choose more than one applications) Word processing, spreadsheet E-mail, video conferencing Multimedia Workflow process Internet Electronic document Portal Internal networking Search for contact person Innovation support software

8. Type of connection Dialup lines analog ISDN (Integrated Services Digital Network) ADSL (Asymmetric Digital Subscriber Line) SDSL (Symmetrical Digital Subscriber Line)

Diffusion of ICT and Information Development Instructions: Please fill in the blank or tick [/] in the appropriate space available. Question in this section involved the innovation and R&D development which is divided into 5 phases as mentioned in Appendix A. 1. ICT applications contribute to the success of the innovation and R&D activity. Strongly disagree Disagree Agree Strongly Agree No opinion

SECTION III

Appendix VI

172

2. Have you involved in any innovation and R&D project in your organization? Yes No

3. If yes, how many innovation and R&D project/s have you involved in the last 3 years? (Please fill in the blank with the number of project).

……………… project/s.

4. Please list the name of the project/s done during the last 3 years and tick [/] the status of the project and product type in the space given.

Status Type

Proj

ect n

o.

Name of project

Com

plet

ed

Not

com

plet

e

Goo

ds

Serv

ices

Proc

ess

1 2 3

5. Factor that motivate the innovation and R&D project/s listed in Question 4

above based on: (Please tick [/] in the appropriate space, one factor for every project accordingly)

Project 1

Project 2

Project 3 Factor motivating the project

Demand in the market Application from individual party Application from public sector Application from institute of higher learning Application from private sector Own initiative Science and technological development Other (please mention)

………………………………….

Appendix VI

173

6. How frequent you used the ICT application at the workplace? Almost never Occasionally Often

Almost Always Always 7. Please rank the frequency of using every ICT application for innovation and

R&D activity from the scale 1, …, 5 below: 1 – Almost never 4 – Almost Always 2 – Occasionally 5 –Always 3 – Often

(Please refer to the definition listed in Appendix A) Portal E-mail, video conferencing Workflow process Electronic document Intranet Innovation support software

8. Please tick [/] in the space available the ICT application most dominantly

used (one only) for every innovation and R&D development activity. (Please refer to the definition listed in the last page of this questionnaire)

Innovation and R&D development Po

rtal

E-m

ail,

vide

o co

nfer

enci

ng

Wor

kflo

w

proc

ess

Ele

ctro

nic

docu

men

t

Intr

anet

Inno

vatio

n su

ppor

t so

ftw

are

Search for needs in market

Conceptual product designing

Design, prototype and test

Redesign and produce

Commercialization

Appendix VI

174

9. Please tick [/] in the space available your perception about usage of ICT for innovation and R&D activity.

Statements about Usage of ICT Application

Stro

ngly

di

sagr

ee

Dis

agre

e

Agr

ee

Stro

ngly

A

gree

No

opin

ion

ICT application is used to gather information from other organization

Acquiring information from other researcher ICT application used to make appointment with other research

To make a contact with an expert in certain field Information acquired from expertise in certain field

Information acquired through meeting with an expert

Information received from an expert Information from expert received through discussion

Information received from other researcher Information posted to other researcher Information posted by sending e-mail Information posted by sending group e-mail Information received by e-mail Information received by group e-mail Discussion through video conferencing Information posted as attachment file through e-mail

Information received as attachment file through e-mail

Discussion through chatting with researcher in a group

Discussion through chatting with individual researcher

Information needed to continue the research process done by other researcher in organization

Information is posted to other researcher at different geographical location for further processes

Information is posted for the task to be continued by other researcher in the organization

Appendix VI

175

Retrieving report to acquire information for research

Retrieving report stored by other researcher Retrieving data information Storing report for future use and future needs of information

Storing report to be used by other researcher Storing data information Using software for designing purposes Using software for simulation purposes

Organization and Management Instruction: Please tick [/] the relevant statement/s given in the space available. It can be more than one statement. 5. The statement/s about management that is/are relevant to your organization Top management promotes motivation to the member of the organization Management practice open concept to all level of personnel Employee are allowed to make suggestion Suggestion by employees will be reviewed by the management Practice consensus seeking but major decisions made by top management Organization is sensitive to market Management held dialogues with customer Management promotes direct people-to-people contact Project team operates horizontally across the organization Information flows horizontally across the organization Information flows vertically in the organization Project is coordinated centrally from the top management Information about success, failure, error and mistake is shared in

organization Information about success, failure, error and mistake is address

constructively among members of organization

SECTION IV

Appendix VI

176

6. The statement/s about ICT that is/are relevant to your organization. ICT related issues are clearly stated in my organization’s strategic planning Information management department is well set up in the organization

structure ICT development is concerned by the top management Top management motivate the usage of ICT application ICT training is given to the member of the organization ICT applications act as supporting tools for decision-making processes Information is shared among researcher by ICT applications Information is access without referring to the person creating it The information system provides access to documents generated anywhere

in the organization External information contributes to the success of the innovation and R&D

activities Thank you for the time and effort that you have taken in completing this survey. Please tick if you need the aggregate result of this survey Your e-mail address: ……………………………………………… Please return completed questionnaire to: Md. Nor Hayati Bin Tahir ABF CONSULTANTS

Wisma ABF,

No. 27, Jalan 9/2, OR Taman IKS, Seksyen 9, 43650 Bandar Baru Bangi, Selangor Darul Ehsan Malaysia

Appendix VI

177

Definition of terms used in this questionnaire 6 types of ICT application: • Intranet is private networks that may facilitate the sharing of dynamical and

linked internal information in a close organization environment. The importance of intranet in an organization is to link among organizations and their employees. It is a basic information access such as the retrieval of corporate documents.

• Electronic document (ED) is repositories of important corporate documents to be retrieved by members of the organization that contribute and generate office activities. The documents stored represent the report, memos and other variation of other document own by an organization.

• E-mail, video conferencing is designed to help members that are dispersed geographically and having the needs to work together where information is sent to another user like chatting, e-mail and e-group and video conferencing.

• Workflow process is a system to support standardized business processes. The process required ordered and structured information continuously where the information flows from person to person, place-to-place, task-to-task following its steps and tracking each activity that composes the process.

• Innovation support software is software used in the product design process to create virtual environment in the process of R&D. Example are Computer-Aided Design (CAD), simulation software and others.

• Portal is to integrate the heterogeneous information sources with standard interface to users. In the portal, information from various departmental intranets is consolidated. The classification of information of an organization in the portal helps easy retrieval to be used as source of information and interact virtually with others.

5 phases of innovation and R&D development • Search for needs in market is the process to gather information or signal about

the presence of demand in the market to initiate the innovation and R&D process. • Conceptual product designing is the process of analytical design where planning

of the features of the product, material, specification, time and cost is decided. • Design, prototype and test are the process of producing the actual new product. • Redesign and produce is the process of reproduce the product accordingly after

testing processes had been done. • Commercialization is the process to market the product for production/sale.

178

REFERENCES Abell, A. and Oxbrow, N., 2001, Competing with Knowledge: The Information

Professional in the Knowledge Management Age, Library Association Publishing, London.

Arora, A., Gambardella, A. and Rullani, E., 1997, Division of Labour and the Locus of Inventive Activity, Journal of Management and Governance, Vol. 1, No. 1, pp. 123-140, Spring Science and Business Media.

Bain, P. and Baldry, C., 1992, The Intelligent Office and the Locus Control, in Beirne, M. and Ramsay, H., 1992, Information Technology and Workplace Democracy, Routledge, London.

Ballantyne, P., 2002, Collecting and Propagating Local Development Content: Synthesis and Conclusion, International Institute for Communication and Development, Research Report No. 7, 2002.

Barker, B., 1998, Internationalizing Japanese Science, in Hemmert, M. and Oberlander, C. (Edited), 1998, Technology and Innovation in Japan: Policy and Management for the Twenty-First Century, Routledge, London.

Beirne, M. and Ramsay, H., 1992, Information Technology and Workplace Democracy, Routledge, London.

Belmah Strategies (Malaysia) Sdn. Bhd., 2004, ICT-Manufacturing. http://203.115.192.172/ictm/ (Accessed: 25th November 2005).

Bossink, Bart A.G., 2002, The Development of Co-innovation Strategies: Stages and Interaction Patterns in Interfirm Innovation, R&D Management, Vol. 32, No. 4, pp. 311-320, Blackwell Synergy.

Campbell, A.J. and Cooper, R.G., 1999, Do Customer Partnerships Improve New Product Success Rate? Industrial Marketing Management, Vol. 28, No. 5, pp. 507-519.

Canepa, A. and Stoneman, P., 2002, The Diffusion of New Process Technologies: International Comparisons, United Nation University, Institutes for New Technologies, The Netherlands.

Carvalho, R. B. and Ferreira, M.A.T., 2001, Using Information Technology to Support Knowledge Conversion Processes, Information Research, Vol. 7, No. 1, October 2001. http://informationr.net/ir/7-1/paper118.html (Accessed: 2nd Mac 2005).

Chaturvedi, S., 2003, Evolving a National System of Biotechnology Innovation: Some Evidence from Singapore, The Research and Information System for the Non-

179

Aligned and Other Developing Countries (RIS) Discussion Papers, No. 61, 2003. Cohen, G., Nijkamp, P. and Montfort, K., 2004, Modeling ICT Perceptions and Views

of Urban Front-liners, Urban Studies, Vol. 41, No. 13, pp. 2647-2667, December 2004.

Dahan, E. and Hauser, J.R., 2002, The Virtual Customer: Communication, Conceptualization and Computation, Journal of Product Innovation Management, Vol. 19, No. 5, pp. 332-353.

Davenport, Thomas H., 1993, Process Innovation: Reengineering Work through Information Technology, Harvard Business School press, Boston.

De La Mothe, J. and Foray, D. (Edited), 2001, Knowledge Management in the Innovation Process, Kluwer Academic Publishers, Boston.

De La Mothe, J. and Link, Albert N. (Edited), 2002, Networks, Alliance and Partnerships in the Innovation Process, Kluwer Academic Publishers, Boston.

Demonstrator Application Grant Scheme (DAGS), 2003, http://www.cornerstone-msc.net/dags/index.cfm (Accessed: 5th Dec. 2005)

Demonstrator Application Grant Scheme (DAGS), 2004a, Progress Report / Analysis http://www.cornerstone-msc.net/dags/index.cfm?menuid=5 (Accessed: 5th Dec. 2005).

Demonstrator Application Grant Scheme (DAGS), 2004b, Progress Report / Analysis http://www.cornerstone-msc.net/dags/index.cfm?menuid=7 (Accessed: 5th Dec. 2005)

Department of Statistic Malaysia (DOS), 2002, Measuring the Knowledge-Based Economy, Discussion Paper on ICT Statistics: Malaysian Perspective, Economic and Social Commission for Asia and the Pacific (ESCAP) Committee on Statistics, Thirteenth Session, Bangkok.

Department of Statistic Malaysia (DOS), 2003, Census of Information and Communication Technology Services 2002,

Dosi, G. et al., 1988, Technical Change and Economic Theory, Printer Publishers, London.

Duga, J. and Studt, T., 2005, The State of Global R&D, Research and Development Magazine, September 2005.

E-Bario homepage. http://www.unimas.my/ebario/Main_index.htm (Accessed: 3rd Dec. 2005)

European Information Societies Technologies (IST) Programme, 2003, Public Sector Innovation in the Knowledge Economy, Providing Innovative Services Models and Assessments Strategic Guideline 7, April 2003.

180

Finch, B.J., 1999, Internet Discussions as a Source for Consumer Product Customer Involvement and Quality Information, Journal of Operation Management, Vol. 17, No. 5, pp. 535-556, 1999.

Foray, D., 2004, Economic of Knowledge, The MIT Press, Cambridge, Massachusetts. Gallouj F., 2002, Innovation in the Service Economy: The New Wealth of Nations,

Edward Elgar, Cheltenham, Gisela, Kubon G., 2003, Motivation, Learning, Knowledge Sharing and Division of

Labor, in Helmstadter, E., (Edited), 2003, The Economics of Knowledge Sharing: A New Institutional Approach, Edward Elgar, U.S.A.

Green, Samuel B., Neil J. Salkind, Theresa M. Akey, 2000, Using SPSS for Windows: Analyzing and Understanding Data, 2nd Edition, Prentice Hall, New Jersey.

Greg, F., 1999, Malaysian’s Innovation System: Actors, Interests and Governance, in Jomo, K.S. and Greg, F. (Edited), 1999, Technology, Competitiveness and the State: Malaysia’s Industrial Technology Policy, Routledge, London.

Griliches, Z., 1995, R&D and Productivity: Econometric Result and Measurement Issues, in Stoneman, P. (Edited), 1995, Handbook of the Economics of Innovation and Technology Change, Blackwell, Oxford.

Griliches, Z., 1997, R&D and Productivity: The Econometric Evidence, Selected Essays of Zvi Griliches. http://post.economics.harvard.edu/faculty/zgrilich/R&D_INTRO.pdf (Accessed: 3rd July 2003)

Griliches, Z., 1998, R&D and Productivity: The Econometric Evidence, The University of Chicago Press, Chicago.

Gujarati, Damodar N., 2003, Basic Econometrics, McGraw Hill, New York. Halimah, A., 2004, Human Capital and Technology Development in Malaysia,

International Education Journal Vol. 5, No. 2, pp. 239 – 246, 2004. Hall, P., 1994, Innovation, Economics and Revolution: Theoretical and Perspective on

Changing Technology in Economic System, Harvester Wheatsheaf, London. Hargadon, A.B., 2002, Brokering Knowledge: Linking Learning and Innovation,

Research in Organizational Behaviour, Elsevier Science Ltd. Helmstadter, E., (Edited), 2003, The Economics of Knowledge Sharing: A New

Institutional Approach, Edward Elgar, USA. Hemmert, M. and Oberlander, C. (Edited), 1998, Technology and Innovation in Japan:

Policy and Management for the Twenty-First Century, Routledge, London. Henry, J. and Mayle, D. (Edited), 2002, Managing Innovation and change, SAGE

Publications, London.

181

Hii, H.H., 2003, Diagnosis and Prescriptions of Malaysia’s National Innovation System: From Systemic Failure to Vibrant Ecosystem, Proceeding Paper in Malaysian Science and Technology Convention (MASTEC) on 1st – 2nd July 2003, Putrajaya, Malaysia.

Ijichi, T. and Goto, A., 1998, Restructuring Basic, Applied and Development Research: Changes in Allocation of R&D Resources, in Hemmert, M. and Oberlander, C. (Edited), 1998, Technology and Innovation in Japan: Policy and Management for the Twenty-First Century, Routledge, London.

International Data Corporation Malaysia (IDC), 2004 http://www.mindbranch.com/listing/product/R104-15512.html (Accessed: 2nd July 2005).

International Telecommunication Union (ITU), 2002, Multimedia Malaysia: Internet Case Study, International Telecommunication Union. http://www.itu.int/itudoc/gs/promo/bdt/cast_int/80898.pdf (Accessed: 17th February 2005)

Ito, Y., 2003, Strategy and Innovation in Japanese Business, Asia Pacific Press, Australian National University.

Japan Registry Services, Time-Series Data of JP Domain Name Registration (Since 1992), Japan Registry Services Co. Ltd., 2001-2005.

http://jprs.co.jp/en/stat/domains.html (Accessed: 7th Dec. 2005) Jasjit, S. and Tarun, K., 2002, What Drives Innovation by Multinationals? Evidence

Using Patent Data, Strategy Unit Working Paper, No. 03-058, Harvard Business School, Boston.

Jimmy J.M.Ng, and Li K.X., 2003, Implication of ICT for Knowledge Management in Globalization, Information Management and Computer Security, Vol. 11, No. 4, pp. 167-174, Emerald Publishing.

Jomo, K.S. and Greg, F. (Edited), 1999, Technology, Competitiveness and the State: Malaysia’s Industrial Technology Policy, Routledge, London.

Joseph, F. Hair, Rolph, A. Anderson, Ronald, L. Tatham and William, C. Black, 1988, Multivariate Data Analysis, (Fifth Edition), Prentice-Hall Inc. U.S.A.

Juergen H. Daum, 2003, Intangible Assets and Value Creation, Wiley, England. Kagami, M. and Tsuji, M. (Edited), 2001, The IT Revolution and Developing

Countries: Late-comer Advantage? Institute of Developing Economies, JETRO, Japan.

Kline S. J., 1985, Innovation is not a Linear Process, R&D Management, 1985, Vol. 28, No. 4, pp. 36-45, Blackwell Synergy.

182

Knowledge-Based Economy Master Plan (KEMP), 2002, Making the Quantum Leap to the K-Based Economy, Institute of Strategic and International Studies Malaysia.

Kraemer, Kenneth L. and Debrick, J., 2001, Information Technology and Economic Development: Results and Policy Implications of Cross Country Studies, in Pohjola, M., (Edited), 2001, Information Technology, Productivity and Economic Growth: International Evidence and Implications for Economic Development, Oxford University Press, Great Britain.

Kramarx, F., 2001, Computers and Labor Markets: International Evidence, in Pohjola, M., (Edited), 2001, Information Technology, Productivity and Economic Growth: International Evidence and Implications for Economic Development, Oxford University Press, Great Britain.

Lall, S., 1999, Technology Policy and Competitiveness in Malaysia, in Jomo, K.S. and Greg, F. (Edited), 1999, Technology, Competitiveness and the State: Malaysia’s Industrial Technology Policy, Routledge, London.

Lall, S., 2001, Competitiveness, Technology and Skills, Edward Elgar Publication, Cheltenham.

Malaysian Administrative Modernisation and Management Planning Unit (MAMPU), myGovernment: The Malaysia Government’s Official Portal.

http://www.gov.my (Accessed: 13th December 2005). Malaysian Industrial Development Authority (MIDA), 2005, Invest in Malaysia: Your

Profit Centre in Asia. http://www.mida.gov.my/ (Accessed: 3rd Dec. 2005). Malaysian Network Information Centre (MYNIC), 2005, MIMOS Berhad, Malaysia

http://www.mynic.net (Accessed: 1st July 2005). Malaysian Science and Technology Information Centre (MASTIC), 2001, National

Survey of Innovation 1997 - 1999, Ministry of Science, Technology and the Environment, Malaysia.

Malaysian Science and Technology Information Centre (MASTIC), 2002, National Survey of Research and Development 2000, Ministry of Science, Technology and the Environment, Malaysia.

Malaysian Science and Technology Information Centre (MASTIC), 2004, National Survey of Research and Development 2004 Report, Ministry of Science, Technology and Innovation, Malaysia.

Mani, S., 2000, Policy Instrument for Stimulation R&D in the Enterprise Sector: The Contrasting Experiences of Two MNC Dominated Economies from the Southeast Asia, United Nation University Discussion Paper Series, No. 9, 2000. United

183

Nation University. Mansell, R. and Wehn, U. (Edited), 1998, Knowledge Societies: Information

Technology for Sustainable Development, Oxford University Press, New York. Md. Nor and Mitomo, 2005a, The Impact of Knowledge Enrichment through ICT

Usage on Innovation Capability in the Malaysian Public Sector, Studies in Regional Science Journal, Vol. 35, No. 2, pp. 369 – 382, 2005, Japan Section of Regional Science Association International, Japan.

Md. Nor and Mitomo, 2005b, Knowledge Captured as an Innovation Factor: The Application And Usage Of Information And Communication Technology In The Malaysian Public Sector, INTAN Management Journal Vol. 7, No. 1, pp. 109 – 129, 2005, The National Institute of Public Administration (INTAN), Malaysia.

Md. Nor and Mitomo, 2006, The ICT Applications: Comparing Usage between Government Research Institutes and Private Research Institutes in Malaysia, to be published in the forthcoming INTAN Management Journal, Vol. 8, No. 1, 2006, The National Institute of Public Administration (INTAN), Malaysia.

Meliciani, V., 2001, Technology, Trade and Growth in OECD Country: Does Specialization Matter? Routledge, London.

Metcalfe, S., 1995, The Economic Foundations of Technology Policy: Equilibrium and Evolutionary Perspectives, in Stoneman, P. (Edited), 1995, Handbook of the Economics of Innovation and Technology Change, Blackwell, Oxford.

Minister of Energy, Water and Communications Malaysia, National Broadband Plan, Press Release, 10th September 2004.

Ministry of Science, Technology and Environment (MOSTE), DAGS allocated RM100 Million Under Eight Malaysian Plan, Press Release, 7th January 2002.

http://www.nitc.org.my/dags/press_release_dags2.doc (Accessed: 13th June 2004). Ministry of Science, Technology and Environment (MOSTE), 2004, National

Innovation Centre. http://www.mosti.gov.my/opencms/opencms/MostePortal/BDU/BDUnicEn.html

(Accessed: 5th September 2005). Monte, de la J. and Link, Albert N. (Edited), 2002, Networks, Alliance and

Partnerships in the Innovation Process, Kluwer Academic Publisher, Boston. Mowery, David C. and Rosenberg, N., 1993, The U.S. National Innovation System, in

Nelson, Richard R., (Edited), 1993, National Innovation Systems: A Comparative Analysis, Oxford University Press, New York.

Mowery, David C. and Rosenberg N., 1998, Paths of Innovation: Technological Change in 20th Century America, Cambridge University Press, United Kingdom.

184

Mumtaz, K., 2003, Schumpeter, Innovation and Growth: Long-cycle Dynamics in the Post-WWII American Manufacturing Industries, Ashgate Publishing Ltd, England.

Narayanan, S. and Wah, 2000, L. Y., Technological Maturity and Development without Research: The Challenge for Malaysia Manufacturing, Development and Change, Vol. 31, No. 2, pp. 435 – 457, 2000, Blackwell, Oxford. http://www.mylib.com.my/

National IT Council (NITC), 2000, Access and Equity: Benchmarking For Progress, Infosoc Malaysia. www.nitc.org.my/resources/papers.html (Accessed: 13th June 2004).

National IT Council (NITC), 2002, DAG’s Pride: A Collection of DAGS Project, NITC, Malaysia http://www.nitc.org.my/dags/index.shtml (Accessed: 13th June 2004).

National Library of Malaysia (PNM), 2000, Mylib: Our Knowledge Portal, National Library of Malaysia.

Nelson, Richard R., (Edited), 1993, National Innovation Systems: A Comparative Analysis, Oxford University Press, New York.

Nobeoka, K. and Baba, Y., 2001, The Influence of New 3-D CAD Systems on Knowledge Creation in Product Development, in Nonaka, I. and Nishiguchi, T., (Edited), 2001, Knowledge Emergence: Social, Technical and Evolutionary Dimension of Knowledge Creation, Oxford University Press. London.

Nonaka, I. and Nishiguchi, T., (Edited), 2001a, Knowledge Emergence: Social, Technical and Evolutionary Dimension of Knowledge Creation, Oxford University Press. London.

Nonaka, I., Konno, N. and Toyama, R., 2001b, Emergence of ‘Ba’: A Conceptual Framework for the Continuous and Self-transcending Process of Knowledge Creation, in Nonaka, I. and Nishiguchi, T., (Edited), 2001, Knowledge Emergence: Social, Technical and Evolutionary Dimension of Knowledge Creation, Oxford University Press. London.

Olsson, O., 2003, Technology Opportunity and Growth, Journal of Economic Growth, Vol. 10. No. 1, pp.31-53, Mac 2005, Springer Science.

Paua, F., 2000, Global Diffusion of ICT: A Progress Report “Okinawa Charter on Global Information Society, adopted at the G-8 Summit Meeting in Okinawa and Kyushu, July 2000.

Pohjola, M. (Edited), 2001, Information Technology, Productivity and Economic Growth: International Evidence and Implications for Economic Development, Oxford University Press. Great Britain.

185

Quah, D., 2001, The Weightless Economy in Economic Development, in Pohjola, M., (Edited), 2001, Information Technology, Productivity and Economic Growth: International Evidence and Implications for Economic Development, Oxford University Press, Great Britain.

Quinn, J. B., Baruch, B. B. and Zein K. A., 2002, Intellect, Innovation and Growth, in Henry, J. and Mayle, D. (Edited), 2002, Managing Innovation and change, SAGE Publications, London.

Rahm, D., Kirkland, J. and Bozeman, B., 2000, University-Industry R&D Collaboration in the United States, The United Kingdom, and Japan, Kluwer Academic Publishers, The Netherlands.

Rasiah, R. (1996), The Changing Organization of Work in Malaysia’s Electronic Industry, Asia Pacific Viewpoint, Vol. 37, No. 1, pp. 21-37, Blackwell Synergy.

Ray, T., 1998, Collaborative Research in Japan and The West, in Hemmert, M. and Oberlander, C. (Edited), 1998, Technology and Innovation in Japan: Policy and Management for the Twenty-First Century, Routledge, London.

Rogers, Everett M., 1995, Diffusion of Innovations, The Free Press, New York. Romer, Paul M., 1986, Increase Returns and Long-Run Growth, Journal of Political

Economy, Vol. 94, pp. 1002-1037, in Meliciani, V., 2001, Technology, Trade and Growth in OECD Country: Does Specialization Matter? Routledge, London

Rothwell, R., 2002, Toward the Fifth Generation Innovation Process, in Henry, J. and Mayle, D. (Edited), 2002, Managing Innovation and Change, SAGE Publications, London.

Sachidhanandam, S., 2001, Bureaucracies and Creativity, New Straits Times: Life, Issues 24th February 2001, New Straits Times Press, Malaysia.

Shafie, H., 2001, The Public Service Network (PSN) & E-Government in Malaysia, Paper presented at the 13th IPTP International Conference in Tokyo, Japan, March 2, 2001

http://unpan1.un.org/intradoc/groups/public/documents/CAFRAD/UNPAN016355.pdf (Accessed: 23rd June 2003)

Singapore Network Information Centre, Statistic Report, 2005, http://www.nic.net.sg/sub_about/statistic_report.html (Accessed: 7th Dec. 2005) Smolny, W., 2000, Endogenous Innovation and Knowledge Spillover: A Theoretical

and Empirical Analysis, Physica-Verlag Heidelberg, Germany. Steinmuller, W. E., 2002a, Knowledge-based economies and information and

communication technologies , International Journal of Social Science, Vol. 54, Issue 171, pp. 159-173, March 2002, Blackwell Synergy.

186

Steinmuller, W. E., 2002b, Collaborative Innovation: Rational, Indicators and Significance, in De La Mothe, J. and Link, Albert N. (Edited), 2002, Networks, Alliance and Partnerships in the Innovation Process, Kluwer Academic Publishers, Boston.

Stock, James H. and Watson, Mark W., 2003, Introduction to Econometrics, Addison Wesley, Boston.

Stoneman, P., (Edited), 1995 Handbook of the Economics of Innovation and Technology Change, Blackwell, Oxford.

Strassmann, P.A., 2002, Information Management at NASA, Government Computer News, Vol. 21, No. 30, Post-Newsweek Media Inc., Washington D.C.

http://www.strassmann.com/pubs/gcn/2002-10-7.html (Accessed: 2nd December 2004)

Technology Assessment and Forecast (TAF) Database, United States Patent and Trademark Office, USA ,

http://www.uspto.gov/web/offices/ac/ido/oeip/taf/reports_stco.htm#P_COUNTS (Accessed: 5th June 2005)

Tengku Mohd Azzman Shariffadeen, 2004, National ICT Policy Planning and Strategy Intervention in Malaysia, MIMOS, Malaysia. http://unpan1.un.org/intradoc/groups/public/documents/CAFRAD/UNPAN016355. Pdf (Accessed: 15th January 2005).

Thailand National Information Centre, 2005, “.th” Domain Name Statistic. http://register.thnic.net/statistic/domain.html (Accessed: 7th Dec. 2005).

Thiruchelvam, K. 2004, Towards a Dynamic National System of Innovation in Malaysia: Enhancing the Management of R&D in Public Research Institutions and Universities, Journal of Technology Management, Vol. 12, No. 2, pp. 127-147.

Tidd, J., Bessant, J. and Pavitt, K., 2002, Learning through Alliance, in Henry, J. and Mayle, D. (Edited), 2002, Managing Innovation and Change, SAGE Publications, London.

Tzu, Y.C. and Jen, F.L., 2004, A Comparative Study of Online User Communities Involvement in Product Innovation and Development, Proceeding Paper at the 13th International Conference on Management of Technology 2004, Washington, D.C.

United Nation Technical Paper (UNTP), 1999, Interaction between the Public Sector and Technological Innovation: Government Policy Towards Research and Development, Division for Public Economics and Public Administration, Department of Economic and Social Affairs, United Nation, New York.

Utusan Malaysia, 2005, ICT Teras Tingkatkan Kecekapan Kerja, Utusan Malaysia

187

Newspaper, Issue 13th December 2005. Von Hippel, E., (2002), Open Source Software Projects as User Innovation Networks,

MIT Sloan School of Management, Working Paper No. 4366-02. Wan Latifah, 1999, K-Economy Advance Paper, NITC, MIMOS Berhad, Malaysia. Watanabe, C. and Hemmert, M., 1998, The Interaction Between Technology and

Economy: Has the ‘Virtuous Cycle’ of Japan’s Technology Innovation System Collapsed?, in Hemmert, M. and Oberlander, C. (Edited), 1998, Technology and Innovation in Japan: Policy and Management for the Twenty-First Century, Routledge, London.

Willinger, M. and Luscovitch, E., 1988, Towards the Economic of Information–Intensive Production System: The Case of Advance Materials, in Dosi, G. et al. (Edited), 1988, Technical Change and Economic Theory, Printer Publishers, London.

Yamashita, S. (Edited),1991, Transfer of Japanese Technology and Management to the ASEAN Countries, University of Tokyo Press.

Zaitun, A.B., Mashkuri, Y. and Wood-Harper, A.T., 2000, System Integration for a Developing Country: Failure or Success?, A Malaysian Case Study, The Electronic Journal of Information Systems in Developing Countries, Vol. 3, pp 1-10, City University of Hong Kong and University of Nebraska, Omaha. http://www.is.cityu.edu.hk/research/ejisdc/vol3/v3r5.pdf (Accessed: 15th December 2005).

188

List of Academic Achievements

Type Title, Publication, Date of publication, Joint names

Article

Presentation

at Academic

Conference

O Md. Nor Hayati Bin Tahir and Hitoshi Mitomo, The Impact of

Knowledge Enrichment through ICT Usage on Innovation Capability

in the Malaysian Public Sector, Studies in Regional Science, Vol. 35,

No. 2, pp. 369 – 382, 2005, Japan Section of Regional Science

Association International.

O Md. Nor Hayati Bin Tahir and Hitoshi Mitomo, Knowledge

Captured as an Innovation Factor: The Application and Usage of

Information and Communication Technology in The Malaysian

Public Sector, INTAN Management Journal, Vol. 7, No. 1, pp. 109

– 129, 2005, The National Institute of Public Administration

(INTAN), Malaysia.

O Md. Nor Hayati Bin Tahir and Hitoshi Mitomo, The ICT

Applications: Comparing Usage between Government Research

Institutes and Private Research Institutes in Malaysia, to be published

in the forthcoming INTAN Management Journal, Vol. 8, No. 1, 2006,

The National Institute of Public Administration (INTAN), Malaysia.

Md. Nor Hayati Bin Tahir and Hitoshi Mitomo, Influence of Product

Type on Mode of Information Flow in Malaysian Research Institutes,

at the 42nd Annual Meeting of the Japan Section of Regional Science

Association International at Tottori University, Japan, 10th October,

2005.

Md. Nor Hayati Bin Tahir and Hitoshi Mitomo, The Information and

Communication Technology Applications: Comparing the usage at

189

the Government Research Institute with the Private Research

Institute in Malaysia, at the 19th Pacific Regional Science

Conference, Nihon University, Japan, 26th July, 2005.

Md. Nor Hayati Bin Tahir and Hitoshi Mitomo, Diffusion of

Information and Communication Technology Applications:

Comparing the Government Research Institute with the Private

Research Institute in Malaysia, at the International

Telecommunication Society Conference on Regional Economic

Development, Pontevedra, Spain, 20th July, 2005.

Md. Nor Hayati Bin Tahir and Hitoshi Mitomo, The Impact of

Knowledge Enrichment through ICT Usage on Innovation Capability

in the Malaysian Public Sector, at the 41st Annual Meeting of the

Japan Section of Regional Science Association International at

Waseda University, Japan, 12th September, 2004.

Md. Nor Hayati Bin Tahir and Hitoshi Mitomo, Knowledge Captured

as an Innovation Factor: The Application and Usage of Information

and Communication Technology in the Malaysian Public Sector, at

the 15th Biennial International Telecommunication Society

Conference, Berlin, Germany, 6th September, 2004.