Human Development

Meeting Global Leadership Challenges

Address by Tan Sri Lim at Limkokwing University, Cyberjaya
18 August 2006

It is a pleasure to be here and I would like to thank Yang Berbahagia Dato′ Ooi Sang Kuang for this opportunity that he has given me.

The topic of Meeting Global Leadership Challenges covers a huge area, and it sounds like a lot of problems. And talking about problems, I went through a lot of it when I went through Heathrow Airport in London earlier this week to be back in time for this occasion.

You know what struck me as I went through the chaotic security hassle - that the crisis situation was very well staged, it made everybody miserable!

Returning to the topic, I have decided to play it safe and stay in an area I am familiar with – that is the role of innovation in a world that is rapidly shrinking, and the leadership that must be in place to build it, and shape it.

I don′t believe I have anything new to tell you. I do have some concerns I would like to share with you.

Let me begin by sharing with you some interesting facts to put in perspective a global scenario using innovation as the basis for comparison.

In the world today there are 6 billion people.

• Half of them – three billion people – live in crippling poverty line.
• 1.3 billion live on less than a meal a day.
• 1.3 billion have no access to clean water.
• 2 billion have no access to electricity.
• 3 billion have no access to sanitation.
• 4 billion have no never heard a telephone dial tone.
• One billion are illiterate. Unable to read or write even their own names.
• Hunger kills 30,000 people a day, everyday.

Now let′s take a look at the other side of the story.

0.1% of the world′s population controlled 25% of the world′s assets in 2004.

100 of the world′s best selling brands earned more than the combined GDP of 100 of the world′s poorest countries.

The richest 50 million people in Europe and North America have the combined income of 3 billion poor people living in the Third World.

Access to telephone in developed countries is 120%; in the poorest countries it is less than 1%.

50 poor countries grew poorer over the past 10 years.

In 1960, richest 20% had 30 times the income of the poorest 20%. By 1997, it had increased to 80 times.

This is a harshly divided world.

It′s divided by what I would simply call an innovation gap.

The widening of this innovation divide will accelerate with advancing technology now in use in all advanced nations.

It is the same innovation gap that divides the urban and rural sectors in many developing countries, including our own.

It is therefore imperative that the knowledge and digital divide that exists between urban and rural communities be bridged effectively and speedily.

Education that empowers innovative thinking must be adopted. Technology that enables transformation must be extended. Our rural society must be brought into the 21st Century.

To begin, we will have to start with the redesigning of the Malaysian mind; the building of a new mindset. The harsh reality is that we still have in place systems that belong to the middle of last century that are not compatible to the realities of a fast-changing world that is relentlessly driven by advancing technology.

An outdated mindset is the biggest stumbling block to the changes that this country must experience as we move forward.

The redesigning of the Malaysian mind may be the biggest challenge that we now face.

To be sure, innovation can only take place in places where there is encouragement for new ideas.

It survives best when it becomes part of a country′s culture and is woven into its educational system, its industrial infrastructure and its political leadership.

Every advanced economy considers innovation as the priority propeller of sustainable growth.

It is no wonder that the world′s richest nations are the world′s most inventive and innovative. These countries attract the best talents, the best brains from around the world. So their innovation lead continues to extend as the divide expands between the rich and poor nations.

The world′s poorest are countries that still hold on to old and obsolete methods of governance, education and production, and have no means of transforming themselves into more productive economies.

It′s certainly no wonder that with every passing decade, scores of poor countries become poorer while rich countries become richer.

Based on available reports, our performance competitiveness has not been improving inspite of increasing investment and intensifying effort on the part of our Government to shore up innovation.

Our innovation ranking is low. Our patent and intellectual property ownership inside the country is even lower. Outside the country, it′s almost non-existent.

In 2002, only 6% of the 4,000 patent applications filed in this country were made by Malaysians.

94% belonged to foreigners. The situation has not changed much since then.

We are simply not innovating.

Unlike advancing Asian economies like South Korea, Taiwan, China and Singapore, Malaysia is not registered on the global innovation map at all. That means we have created virtually no innovation for the world market.

Fifteen years after the country started a high profile drive for innovation, we are still described by international observers as merely “fast follower” which really means we are consumers and not producers of innovation.

So what is missing here? Are we not capable of thinking creatively? Or are we simply not thinking at all?

We know that to move forward, we must succeed in building an eco-system that encourages creativity, and enables it to take hold pervasively throughout society. From classrooms to boardrooms, from factories to government ministries, from SMEs to GLCs, transformational innovation must take hold.

To succeed in the long term, we must be equipped to compete with the most advanced countries in the world. That simply means we must transform this country to become one of the most creative nations on earth. In view of advancing competition, I can see no other option.

To realize that goal, we must now urgently address the source where we build our competencies and competitiveness – our human capital.

We need people who can think and live outside the box, people who are prepared to challenge the status quo and change the rules if the rules have become stumbling blocks. And we need plenty of them.

To be able to build this crucial human capital, we must empower a system of education that is driven by the motivation to acquire knowledge, and a passion to make the impossible possible.

The learning environment must be one that is inspiring, not stifling.

We must develop a culture in our education system that recognizes and celebrates creativity, and promote a culture in our teaching system that encourages innovative thinking.

We need to develop a system of training that motivates the young generation to be people who want to achieve greatness. Being good is simply not good enough in today′s highly competitive, borderless environment.

We must make inventiveness and out-of-the-box creativity the expected outcome of our education system and its leadership vision.

Rules and regulations that force people to concentrate on not making mistakes will lead to enforced conformity and unthinking compliance.

Rules and regulations that attempt to impose a one-size-fits-all structure will hamper efforts of institutions of higher learning to be truly competitive.

Rules and regulations that stifle innovation must simply be discarded.

Question is are we ready for all that ?

We know that the most advanced nations are also the world′s most inventive, most innovative.

We must also know that, without exception, all have well developed creative industries which provide effective on-going R&D support to their industries.

Without exception, all consider design, creativity and innovation a strategic driver of national competitiveness.

Without exception, the Government of these countries have built economic and social infrastructures that encourage and promote creativity and innovation.

Without exception, they actively reach out to attract foreigners who could help them generate more innovation.

With a lot of concern, I must say that we have a lot of catching up to do. Clearly, this is a major leadership challenge as the country move forward.

In business, to be sure, innovation must be industry-led and driven. This is because industry knows what the market wants, and how to drive the market to open up new avenues.

But, to be certain, the process of innovation development must also involve the approval systems. Government agencies must work hand-in-hand with the private sector to enable industry to operate at its competitive best.

All levels of governance must understand the competitive nature of today′s globalised environment, and the speed at which both the public and private sectors must move in order to remain in competition.

Everyone involved must realise that if our private sector loses a battle to a competing country, it is the country that loses the battle.

If our Government machinery is not as competitive as it must be, and has not the innovative leadership that it must have, and the capacity it must be equipped with, we will never have the depth, the drive nor the capacity to sustain our competitiveness in the long run.

If it is true that a calendar year equals seven computer years, a five-year delay in gathering capacity could mean 35 years of falling behind.

Clearly and urgently, we must now focus on creating a more vibrant and productive innovation system that will pull together all our resources, our cultural diversity and creativity.

We must now build for this country a big passion for innovation.

We either make the quantum leap forward now or be relegated to being a lagging-behind-nation before we even reach 2020.

The time to push forward is now, and time is not really on our side.

We must make the development of the creative mind a national agenda.

Unless we get really serious about cultivating creativity and promoting innovation, the transformation to a knowledge-based economy will not readily happen.

And unless that transformation happens, our competitiveness will erode.

Do we have the leadership and force of determination to see us through this transformation ?

Let me take a minute here to give you a simple illustration where only innovation can bring about a major transformation.

Malaysia has the potential as well as the credentials to be a major halal food production hub, and we already have most of the ingredients to succeed.

Malaysia has the longest established and most widely recognised halal certification in the world.

Malaysia trades with practically every country on earth.

Islam is the fastest growing religion in the world, both by birth and adoption. It is estimated that by 2020, world Muslim population will double to reach 3 billion people spread across the world.

If we were to achieve a 5-percent share of the global halal food and non-food market which is projected at US$ 4 trillion in 2010, it will bring in 200 billion ringgit in revenue.

That achievement alone will change forever the ethnic balance of economic ownership in this country.

However, to arrive at that achievement, we must first move our rural economy into 21st century environment; and that means to effectively transform Malaysia′s rural industry into one that is modern, dynamic and innovative.

The rural economy runs on knowledge and skills that are hundreds of years old. Adding new knowledge and new skills of the modern era will, undoubtedly, transform the sector to perform more vibrantly and commercially.

What is needed is a cohesive enabling platform designed to bring about effective modernization; a platform that will empower rural-based enterprise with new knowledge and new know-how, and enable them with new technology and machinery. This transformational process will bridge the innovation gap that now exists between the rural and the urban sectors; it will bridge the glaring disparities and inequalities that exist now between communities and urban-rural industries. And it does not need to take a lot of time if well-designed enabling drivers are put in place effectively, professionally.

We have been talking about being a major global halal production hub for as long as I care to remember. Do we have what it takes to succeed?