Economic impacts of the Industrial Collaboration Program in Malaysia

Industrial Collaboration Program (ICP) has long become part of the growth driver of Malaysia's economy. However, the actual impacts of ICP on macroeconomic variables are hard to be assessed due to data limitations. Based on the current practice, the data that reflects the overall ecosystem of the ICP are only available at the Technology Depository Agency (TDA) and subject to the confidentiality policy. The impacts of expenditure investment vary across economic sectors, depending on the inter-industry interdependencies. In response to the issues, this study generally aims to provide a comprehensive assessment of the economic impacts of the Industrial Collaboration Program (ICP) in Malaysia. Altogether, this study adopts the input-output modelling technique as the primary methodological approach, with the assessment, are made on three completed ICP procurements, namely; Malaysia Rail Transit Corporation (MRT), TNB Manjung Five, and Sistem Bisnes Utama (SBU ICT). Findings reveal that MRT procurement brings the most significant economic impacts because it dominates the largest share of total investment. However, its contribution per Ringgit of investment is relatively lower than TNB Manjung Five and SBU ICT procurements. It does not mean that future procurements need to focus on procurements other than MRT because investments in developing public transportation systems are essential for supporting economic growth. Two key areas for future research stand out. First, we need a better database. This database should track investments over time, such as quarterly or yearly. This will allow us to monitor the impact of these investments more frequently and compare them to national economic trends. Second, we need to develop a more sophisticated impact assessment model. This model should consider long-term effects, productivity improvements, and how changes in prices can influence the economy. To do this, we'll need to collect more detailed data and resource. The results of the study are useful and relevant to the problem statement for several reasons. First, it provides a quantitative analysis of the ICP's impact on the economy, including GDP, employment, and income. This addresses the limitations of previous studies that relied on qualitative assessments. Second, the study examines specific projects like the MRT and TNB Manjung Five to understand their economic benefits. This information can guide future investment decisions. Third, the study recommends improving data collection and creating a better model for assessing the impact of future ICP projects. This is crucial for policymakers and industry leaders to make informed decisions. Overall, the results of the study are relevant and useful to policymakers, industry stakeholders, and researchers who are interested in understanding the economic impacts of the Industrial Collaboration Program (ICP) and improving the methodology for evaluating these impacts. The study provides a foundation for future research and policymaking in this area, and the recommendations can help to improve the effectiveness and efficiency of the ICP program

Text 122846.pdf Download (1MB) Official URL or Download Paper: https://ethesis.upm.edu.my/id/eprint/18684

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