Innovation and Economic Growth in Malaysia

Abstract: Since independence in 1957, Malaysia has transformed significantly from an economy based on primary commodities to one fuelled by manufacturing and services based on foreign investment.. Besides Malaysian economy has achieved steadily high growth for over five decades. However, after the Asian financial crisis of 1997, the growth of Malaysian economic slowed and the downturn remains until the 2008 global financial crisis made matters worse. Currently, Malaysian economy give some hints of recovery, but there is still concern that the recovery might be challenging. The reason is that Malaysia has lost its comparative and competitive advantages in several products to some new developing economies opening up and joining the trend of export-led growth. In addition, it cannot compete with developed countries with new technologies