Uneven Paths of Development
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Uneven Paths of Development

Innovation and Learning in Asia and Africa

Banji Oyelaren-Oyeyinka and Rajah Rasiah

This book focuses on what can be learned from the complex processes of industrial, technological and organizational change in the sectoral system of information hardware (IH). The IH innovation system is deliberately chosen to illustrate how sectors act as seeds of economic progress. Detailed firm-level studies were carried out in seven countries, three in Africa (Nigeria, Mauritius and South Africa) and four in Asia (China, Taiwan, Malaysia and Indonesia).
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Chapter 4: Rapid Expansion with Slow Upgrading in Malaysia

Banji Oyelaren-Oyeyinka and Rajah Rasiah


INTRODUCTION Malaysia provides an interesting case for assessing the state of learning and innovation in computer and component firms in an economy endowed with good basic infrastructure but weak high-tech infrastructure. Computer components and peripherals production has expanded since the first major wave of foreign export-oriented electronics firms relocated operations to Malaysia from 1971 (Rasiah, 1988). After the introduction of a series of passive technology instruments such as the opening of the technology transfer unit (TTU) in 1975 and the first Industrial Master Plan (IMP) in 1986, the government attempted to focus on learning and innovation as the driver for upgrading and structural change in a range of strategic industries identified in the Action Plan for Industrial Technology Development (APITD) in 1990. Information hardware (IH) was among the key sub-industries identified in this list, which became even more important following the adoption of the cluster approach in the second Industrial Master Plan (IMP2) launched in 1996. Despite blueprints contained in the IMP2 to drive learning and innovation, problems of coordination and the lack of human capital have stifled firms’ participation in R&D activities in Malaysia. This chapter examines the link between the systemic pillars, and technological intensities and productivity in the IH industry in Malaysia. The prime manufacturing locations in Malaysia where IH manufacturing operations are carried out are Penang, the Kelang Valley, Senawang, Melaka and Johor. Kulim and Sama Jaya are the other locations with significant manufacturing of these items. Penang and Johor were...

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