By Lee Wei Lian
June 10, 2011
The Malaysian Insider

KUALA LUMPUR, June 10 — Unik, the prime minister’s initiative tasked with restructuring the country’s public innovation ecosystem has hit a setback with the resignation of its technical advisor N Danaraj who was in charge of putting together the National Innovation Policy (NIP).

His resignation earlier this week could come as a blow to Unik due to the loss of experience as Danaraj has a masters degree in public administration from Harvard, a doctorate from Oxford and was also technical advisor to the National Economic Advisory Council (NEAC), a senior fellow at Khazanah Nasional and a research fellow at the Malaysian Institute of Economic Research.

His departure, which sources say was due to various disagreements with Unik CEO Dr Kamaljit Singh over the NIP, comes as several innovation agencies have been privately expressing concern over the Unik chief’s leadership style.

The innovation agencies are understood to be frustrated that their issues over proposed changes to the way federal grants are disbursed have not been adequately addressed and their growing resentment over the uncertainty could hamper Unik’s efforts to implement initiatives.

Their unhappiness came to a head when they learnt that Kamaljit had proposed a freeze on funding by innovation agencies by July at the Economic Council (EC) meeting earlier this month without consulting them.

Sources say that a decision on the proposed freeze was postponed following objections from several other members of the EC, which is chaired by the prime minister.

Kamaljit is understood to be in favour of implementing a competitive bidding system where both government agencies and ministries that disburse technology related grants such as Biotech Corp, the Ministry of Science Technology and Innovation (Mosti) and the Multimedia Development Corporation (MDeC) bid against each other for the funds which will be put in a common pool, but agencies say it is unfair for agencies under the ministry to bid against the ministry itself.

One industry veteran familiar with the situation said that while some people might appear to “play ball” with Kamaljit because they believe he has the prime minister’s ear, the opposition might get more serious if he doesn’t get buy-in from the agencies.

“If you push things through without getting agreement, do you think the agencies will help you?” said the industry veteran.

One industry player said Unik is a good initiative but the main issue is lack of clarity from the top and claimed that the affected parties were being asked to trust Kamaljit without knowing all the details.

“Nobody’s afraid of competition,” said the industry player when asked about competitive bidding. “If we don’t perform, shut us down.”

“But you can’t put parents and children in the same basket and ask them to compete (for grant money budget), that’s not market forces,” he added referring to the concept of agencies competing against their parent ministries.

Some industry observers say however that Kamaljit may be trying to push things through because he feels that things will not get done otherwise.

“Unik has an ambitious agenda and when you are short of time, you may be forced to step on the toes of those more used to a drawn out consultative process,” said one observer. “That’s why Unik is under the prime minister’s department.”

When contacted, Danaraj confirmed the resignation but declined to comment further.

Kamaljit also declined to comment for the story when contacted.

Unik, which stands for Unit Inovasi Khas or Special Innovations Unit, was established by Datuk Seri Najib Razak to develop and implement strategies to stimulate and support innovation in Malaysia.

Its website states that it is a special-purpose body designed to focus on two core priorities – improving Malaysia’s innovation eco-system and directly cultivating innovation.

Over a period of 18 months, Unik in its current form, will focus on developing policy in support of an improved innovation eco-system while a statutory body called Agensi Inovasi Malaysia (AIM) will be set up to take over implementation and policy reform. Leading global strategy consultants, The Boston Consulting Group (BCG) were also engaged by Unik late last year to study the efficiency of funds disbursement in the public sector. The three key recommendations from the study, which leveraged best practice from Singapore, US and Korea, were for Malaysia to focus funding in strategic sectors where it has comparative advantage, to introduce a performance management system that allows standardised performance comparison on outcomes across funds, and for more comprehensive linkages within the innovation ecosystem — research, entrepreneurs, investors and the private sector.