Fostering Bioeconomy in Malaysia through Technology and Innovation

Fostering Bioeconomy in Malaysia through Technology and Innovation

Published: 2022.06.07
Accepted: 2022.06.02
20
Center for Technology Commercialization and Business, Malaysian Agricultural Research and Development Institute, Malaysia.
Former Director
Strategic Planning and Innovation Management Centre, Malaysian Agricultural Research and Development Institute (MARDI)

ABSTRACT

Despite depletion of natural resources, the demand for food increases every year due to the increase in population. Without additional land and resources, the world will require more than 70% of food in 2050. Thus, technology and innovation are the options for meeting the food demand. Technology and innovation improve the efficiency of agriculture production and consequently increase the productivity of the yield. The Malaysian Agricultural Research and Development Institute (MARDI) championed the development of agriculture technology and innovation. MARDI has generated more than 1,000 technologies, and out of these, more than 30% were transferred and has benefitted farmers, breeders, and the society in Malaysia. Technologies and innovation are the catalysts for economic development in Malaysia. Technology is one of the important factors for the enhancement of Malaysia’s bioeconomy.

Keywords: Bioeconomy, innovation, technology, agriculture, technology transfer

INTRODUCTION

The world is facing a challenging situation where resources are depleting, and the demand for food is increasing. Every country is concerned about providing sufficient food for its people. The Food and Agriculture Organizations (FAO) projected that since the world's population will increase from 7.2 billion today to 9.6 billion in 2050, the world needs to produce 70% more food without additional land or natural resources. Thus, innovation and technology are necessary to improve agriculture activities. With finite resources, it will take innovation and technologies to supply the world's food demand. Technology is helping farmers produce a safe, abundant, sustainable, and nutritious food supply. The application of Global Positioning System (GPS) and drones in precision farming reduces the use of labor and, at the same time, can target individual crop treatments to the smallest plots of land area, which finally reduces environmental impacts. Postharvest handling and packaging, on the other hand, reduce food loss during harvesting and transporting the agricultural produce from farms to consumers and, at the same time, ensure food safety.

Research and development (R&D) across disciplines provides vast potential for innovations. Exploiting innovations in the bioeconomy landscape for technology transfers and commercialization seems prominent. Understanding and utilizing efficient technology transfer techniques in this multidisciplinary research context are crucial given the bioeconomy's ability to address major concerns of the twenty-first century. Despite its economic importance, the bioeconomy has the potential to address current world challenges by relying mainly on knowledge, research, and innovation derived from renewable biological resources (European Commission, 2012). According to Staffas, Gustavsson, & McCormick (2013) and McCormick & Kautto (2013), knowledge-based bioeconomy (KBBE) is the most talked-about area of trans-disciplinary R&D today, with the potential to produce €2 trillion in annual turnover and over 22 million jobs in Europe (European Commission, 2012). However, little is known about technology transfer in the bioeconomy due to enormous interdisciplinary involvement and setting. To spark and foster the Bioeconomy in Malaysia, MARDI has evolved and diversified its role and function to ensure the success of technology transfers and commercialization success. This paper discusses the impact of technology and innovation in developing the bioeconomy in Malaysia.

BIOECONOMY LANDSCAPE IN MALAYSIA

The term bioeconomy was first explored as a means of substituting resources. Initially, the concept of bioeconomy was defined as how to replace the running out of natural resources with synthetic products such as synthetic rubber, synthetic cotton or other chemistry processes. In general, bioeconomy refers to all economic activities derived from the continued commercial application of biotechnology. The concept of bioeconomy is different by organizations and countries. Other organizations or governments define the bioeconomy concept differently. For example, the European Commission states bioeconomy comprises those parts of the economy that use renewable biological resources from land and sea – such as crops, forests, fish, animals, and micro-organisms – to produce food, materials, and energy. The European Commission defends the importance of the bioeconomy to stimulate the economic growth of developed economies. It states that the bioeconomy aims to reduce the dependence on natural resources and promote sustainable production of renewable resources from land, fisheries, and aquaculture and their conversion into food, feed, fiber, bio-based products and bio-energy, growing new jobs and industries. 

The White House's National Bioeconomy Blueprint refers to the bioeconomy as using research and innovation in the biological sciences to create economic activity for public benefit. Bioeconomy develops new drugs and diagnostics for improved human health, produces higher-yielding food crops, creates biofuels to reduce oil dependence, and biobased chemical intermediates

The bioeconomy concept is relatively new in Malaysia. It was started when the government launched the National Bioeconomy Policy in 2005. Bioeconomy produces renewable biological resources and their conversion into food, feed, chemicals, energy, and healthcare wellness products via innovative and efficient technologies. The government launched the National Bioeconomy Program in 2010, making it the first in the Southeast Asian countries and the second in the Asia region (after China). These initiatives were followed by the Bioeconomy Transformation Programme (BTP) in 2012. The bioeconomy contributed approximately RM106.7 (US$25.4) billion or 13.4% of the total Malaysian Gross Domestic Product (GDP) in 2010. This value encompasses economic impact from all sectors of the economy that could benefit from the application of bio-based technology, like agriculture, chemical production, and oil and fat processing. The Malaysian Bioeconomy sector is projected to grow from RM150.0 (US$35.7) billion in 2020 to RM181.2 (US$43.1) billion in 2030, with a growth rate of around 15% per annum. 

Malaysia has also put in place bioeconomy-related arms and biosafety laws and regulations, such as the Biosafety Act, the National Biosafety Board (NBB), the Genetic Modification Advisory Committee (GMAC), and being a signatory member of the Cartagena Protocol on Biosafety. Since then, several accomplishments have been made, including job creation, GDP contribution, and foreign investment.

The National Biotechnology Policy (NBP) identified three focus areas: agriculture biotechnology; healthcare biotechnology; and industrial biotechnology. The NBP has also identified critical areas for bio-business development, including human capital development, financial infrastructure, legislative and regulatory framework, R&D and technology acquisition, and government commitment and intervention. The long-term master plan for developing the bioeconomy in Malaysia was divided into three phases: Phase I Capacity Building (2005–2010), Phase II Science to Business (2011–2015), and Phase III Global Business (2016–2020). The government has rebranded the Malaysian Biotechnology Corporation into Malaysian Bioeconomy Corporation to serve as a one-stop-shop for implementing government policies and efforts, companies' involvement in the biotechnology industry, encouraging research, development, and commercialization building a robust investor ecosystem. Malaysia has passed the three phases long-term master plan, and currently monitoring the implementation of bioeconomy programs. 

The Ministry of Science, Technology, and Innovation (MOSTI) was appointed as the lead ministry to enhance the bioeconomy in Malaysia. More than 10 agencies under MOSTI were responsible for dealing with biotechnology, namely the National Institute of Biotechnology (NIBM), Malaysia Agro-Biotechnology Institute (ABI), Malaysia Institute of Pharmaceuticals and Nutraceuticals (PHARM), Malaysia Genome Institute (MGI), Nuclear Agency, Nano Malaysia, Malaysian Standard (SIRIM), Malaysian Technology Development Corporation, Malaysian Debt Ventures, and Technology Park Malaysia. Other agencies include the Malaysian Agricultural Research and Development Institute (MARDI), the Malaysian Rubber Board, Malaysian Palm Oil Board, Malaysian Cocoa Board, Malaysian Pepper Board, and Forest Research Institute Malaysia (FRIM). These organizations and entities are involved in biotechnology R&D, commercialization, bio-business facilitation, project financing, industry-standard development, and incubator services.

Roles of innovation and technology in agriculture bioeconomy

Agriculture is one of the sectors that will enhance the bioeconomy in Malaysia. The application of technology and innovation catalyzes the development of the agriculture sector. The development of agricultural technology in Malaysia is carried out by government research institutions and the private sector. The Malaysian Agricultural Research and Development Institute (MARDI) is Malaysia's largest agricultural research institution. It was established in 1969 by the Act of Parliament, Malaysia. MARDI has been mandated to conduct scientific, technical, economic, and sociological research to produce, utilize, and process all crops and livestock. On the other hand, the R&D for three commodities (rubber, oil palm, and cocoa) is carried out by other research institutions: rubber by Malaysian Rubber Board, oil palm by Malaysian Palm Oil Board and cocoa by Malaysian Cocoa Board. It is a statutory body under the Ministry of Agriculture and Food Industry (MAFI). Its main objectives are to develop, generate, and promote indigenous science and technologies, and capabilities to advance Malaysia's food, agriculture, and agro-based industries. At the same time, MARDI serves as a center for collecting and disseminating knowledge and information in agriculture.

MARDI's core function is to conduct R&D for the development of the agriculture sector. Since its establishment more than 50 years ago, MARDI has been conducting basic research that focuses on experimental work; and applied research or problem-oriented research that focuses on solving specific problems faced by the agriculture industry players and stakeholders. The outcomes of projects conducted by research officers are new knowledge, systems, procedures, methods, or products called technological innovation. This technological innovation can be used directly or indirectly by farmers or entrepreneurs and eventually become tools for economic development.

Over 50 years served as the leader in agro-technology; MARDI generated more than 1,000 technologies in paddy, horticulture crops, livestock, and agro-biodiversity. The other technologies include agricultural biotechnology, food technology, genomics, agricultural engineering and automation, and bio-informatics. MARDI also focused on specific R&D thematic such as smart fertilizers to address climate change issues, transforming agriculture waste into new products, and developing new health products from agriculture/plants. Smart fertilizer refers to slow-release formulation into the soil. It allows plants to utilize a higher proportion of fertilizer than conventional products. The slow-release fertilizer could stabilize and enhance the efficiency of soil over time. It reduces the cost of production and, at the same time, sustains the environment. MARDI also developed new products from underutilized crops and modified super variety crops.

Technology transfer is MARDI's second core function. MARDI transfers all technologies to benefit farmers and society in the country. The technology is useless until it benefits the users. MARDI defines technology transfer as a process to facilitate and expedite the creation and dissemination of technology for adoption by users. The technology transfer system in MARDI has evolved from simple dissemination of technology through technical papers presented at seminars and conferences to technical training and, finally complete technology transfer package.

Technology transfer means bringing the technology from the laboratory to the market. Technology transfer is a process whereby technology benefits society by increasing productivity, simplifying the process work, automating the operation, and improving the quality of the products. More than 30% of the technologies developed by MARDI were transferred directly or indirectly to benefit farmers, entrepreneurs, and the society. The transfer of technology has increased the productivity of the agriculture sector, reduced the dependency on foreign labor, and increased the revenue generated from agriculture activities.

After more than five decades of existence, MARDI has transformed the agriculture sector into a modern, dynamic and progressive industry. For example, in the first decade, MARDI developed nine varieties of paddy, a new method of freshwater fish breeding, generated a new breed of oil palm. More than 5 million of MARDI's oil palm seedlings were planted all over Malaysia. Some technologies and innovations that MARDI developed and transferred are presented in Table 1.

Table 1. Examples of technologies developed and transferred by MARDI (1970-2020)

Decade

Technologies

First decade (1970-1979)

  • 9 paddy varieties
  • New method of fresh water fish breeding
  • New breed of oil palm

Second decade (1980-1989)

  • 7 paddy varieties and 1 glutinous paddy variety
  • 5 hybrid orchids
  • 2 variety of tobaccos
  • 1 variety of sweet corn
  • 1 variety of pineapple
  • 1 variety of papaya
  • 1 variety of tapioca
  • 4 Liberica coffee clones and 3 Arabica coffee clones

Third decade (1990-1999)

  • 9 paddy varieties and 2 glutinous paddy varieties
  • 1 sweet corn variety
  • 1 tobacco variety
  • 1 tapioca variety
  • 1 ground nut variety
  • 1 sweet potato variety
  • 4 chili varieties
  • 1 pineapple variety
  • 1 pomelo variety
  • 3 durian clones
  • 7 Liberica coffee clones
  • Flower preservation technique

Fourth decade (2000-2009)

  • 4 paddy varieties (including fragrance rice)
  • 1 post-harvest technique for exporting chrysanthemum flower to Japan
  • 15 orchid hybrids
  • 3 sweet potato varieties
  • 3 tapioca varieties
  • 3 Liberica coffee clones
  • Machine of baking traditional cakes
  • Groundnut variety
  • 3 salak fruit clones

Fifth decade (2010-2019)

  • 19 paddy varieties
  • Weedy rice buster
  • 36 orchid varieties
  • Salmonella species detection kit in food
  • Dorper sheep
  • Bio-pesticide kit
  • Village chicken
  • Vertical farming technology
  • Plant factory and mobile container plant factory
  • Traditional cakes machine and automation
  • Various health products from virgin coconut oil
  • Super big Kedah-Kelantan Cattle
  • Rambutan Clone
  • Food products from fish
  • Supplement products from herbs and local fruits
  • Multi-species flowers
  • 6 hybrids coconuts
  • Rapid test kit for pesticides

THE IMPACT OF TECHNOLOGY TO BIOECONOMY IN MALAYSIA

Paddy industry

Rice is the staple food of Malaysians. Every year, Malaysia produces more than 2.4 million tons of paddy that are converted to around 1.7 million tons of rice. The paddy industry was transformed from traditional practices during the early 1950s into a dynamic and progressive industry. The application of technologies and innovation has increased the productivity and quality of rice.

MARDI is continuously developing new varieties of paddy as it has a gene bank containing over 15,000 traditional paddy seedlings, MARDI’s types, and varieties from abroad. The diversity of rice genetic resources enables MARDI to produce quality rice and ensures the supply of paddy seeds always meets the needs of farmers. More than 90% of 350,000 hectares of paddy fields in Malaysia use paddy varieties produced by MARDI. Almost all farmers use the cultivation and farm management techniques introduced by MARDI. MARDI’s technology has increased the average yield from 2.50 tons per hectare in 1970 to 3.60 tons (2010) and 4.60 tons (2019). Many farmers managed to produce more than 12 tons per hectare. On average, farmers earn more than RM2,000.00 (US$476.00) per month from paddy cultivation activities, and the return of the paddy industry to the national economy is estimated at more than RM15.00 (US$3.57) billion per year.

Fruits industry

Fruit is an essential commodity that contributes to the country's income through the export market. The fruit export market reached more than RM700.00 (US$166.70) million, in 2020. The main markets for Malaysian fruit are Singapore and China. The research activities conducted by MARDI aim to increase productivity and fruit quality through an efficient and effective production system, systematic post-harvest handling. MARDI’s technology covers the development of new varieties up to post-harvest handling for export market. For example, more than 60% of 13,200 hectares pineapple farms in Malaysia are planted with the Josapine pineapple variety produced by MARDI. This pineapple is a significant export commodity to Hong Kong and the United Arab Emirates. At the same time, the Exotica papaya generated by MARDI contributed more than 70% of the papaya export value from Malaysia. MARDI’s technology is estimated to account for more than 30% of fruit production, amounting to more than 650,000 tons worth more than RM1.32 billion (US$242.00 million).

Vegetables industry

The R&D carried out by MARDI aim to produce vegetable production technologies in Malaysia's climate. The development of new varieties of vegetables through traditional and modern methods includes selection, performance evaluation, and quality improvement to strengthen the vegetable industry in Malaysia. The main focus is tissue culture research to improve production, the pre-harvest and post-harvest management for local and export markets. Research to improve the efficiency of using agricultural inputs is also conducted. MARDI has also developed a vegetable production system under rain protection structure, vertical farming, and urban farming, such as plant factories and mobile plant factories. The technology contribution to the vegetable industry in Malaysia is estimated to be worth more than RM100.00 (US$23.80) million a year.

Tuber industry

The tuber industry, such as sweet potato and cassava, is an essential industry for Malaysia. Sweet potatoes are rich in vitamin A and carbohydrates. MARDI has produced many sweet potatoes and cassava varieties that are used as raw materials for snack food processing industry, such as chips and traditional cakes. The sweet potato and cassava technology resulting from MARDI's research has increased farmers' income to more than RM30,000.00 (US$7,142.00) per season. The value of the tuber industry in Malaysia is estimated at more than RM100.00 (US$23.80) million a year.

Coconut industry

Coconut is the 4th most important crop in term of land usage in Malaysia after oil palm, rubber, and paddy. MARDI has developed six varieties of hybrid coconuts that can produce over 25,000 coconuts per year, compared to Malayan tall coconuts, which produce around 7,000 coconuts per year. The result of MARDI’s technology is projected to increase the country's coconut production by more than 25 million nuts in 2029. The development of new varieties of coconut will reduce the import of coconut from neighboring countries and, in turn, will further increase the economic value of the country's agricultural sector. The value of the coconut industry in Malaysia is estimated at more than RM650.00 (US$154.70) million a year.

Livestock industry

The livestock industry is essential to the country because it offers a source of protein to the people. Research related to the livestock industry aims to increase the number of livestock that can provide meat for the needs of the people. This research includes producing quality livestock breeds through feeding systems and livestock care systems that are suitable for the environment in Malaysia. MARDI has created many livestock breeds such as cattle, goats, and chickens to increase meat production and increase farmers' income. Among the cattle breeds produced by MARDI is Brakmas Cattle Breed, which is a cross between Brahman and Kedah-Kelantan cattle, Cheroke Cattle Breed (a cross between Charolais and Kedah-Kelantan), Kedah-Kelantan Elite Cattle Breed. The breed for goats includes Boer Goat (a cross between goats from South Africa and local goats) and high-quality village chickens. MARDI also produces animal feed from oil palm kernel residue and oil palm fronds. MARDI has commercialized its Omega-3 eggs to a local company, and this company became the pioneer in Omega-3 eggs production in Malaysia. MARDI's technology helps increase the country's meat production and increase farmers' income.

Mechanization and automation in agriculture

Mechanization and automation technology is an essential requirement in the agricultural sector as it reduces dependence on labor. Mechanization and automation technologies also improve farm management efficiency and produce better quality products. MARDI has modified many machinery tools from abroad to suit the plantation system and the environment in Malaysia. MARDI has also developed technology to suit the needs of farmers in Malaysia who are, on an average small and medium scale. In general, the use of technology has increased the productivity of the agricultural sector and thus increased the socio-economy of farmers and national income. For example, the paddy harvest management technique from MARDI's research managed to save more than 500,000 tons of paddy from being lost during harvesting, transporting to processing and manufacturing plants, worth more than RM750.00 (US$178.60) million a year.

Solving problems faced by the agriculture industry

Throughout its existence, MARDI has solved the problems of the agricultural industry and provided cost-effective and efficient solutions through technology and innovation approaches. The technologies developed by MARDI are transferred to the target group consisting of farmers, breeders, and entrepreneurs. Among the solutions to the problems faced by the agricultural industry are designing machinery and mechanization tools with local characteristics. Mechanization and automation technology can double productivity and improve the quality of products produced. MARDI also modifies agricultural machinery from abroad to suit the environment in Malaysia. MARDI also solved the problematic soil. Over 2.5 million hectares of problematic soil in Malaysia, including land mines, sulfuric acid land, and peat-land. These soils cause infertile crops and produce poor quality yields. Among the solutions proposed by MARDI include the use of appropriate organic matter and organic fertilizers that can improve the physical condition of the soil. MARDI also designs machinery tools suitable for use in this problematic land area.

The development of new technologies

MARDI continues to develop new technologies that can foster the development of the bioeconomy in Malaysia. The example of technologies that were developed and ready to be commercialized are as follows:

  1. New product development from underutilized crops: Health Supplement from Terung Asam

A new product was developed from the Golden Vegetable (Terung Asam), which has high levels of natural phytochemicals that are beneficial in treating obesity. The technology provides a standard manufacturing approach and formulation for making the health supplement product. The potential local market of this technology is estimated at around RM5.00 (US$1.20) million and approximately RM50 (US$11.90) million in the global markets. 

  1. From waste to wonder: Nitro Humic Acid (NHA) Alternative Source of Humic Acid

Nitrohumic acid (NHA) is a biochemically active macro-molecule with a high molecular weight similar to Humic acid. Humic acids have long been utilized as a chelating ingredient in liquid fertilizer formulations and soil conditioners. It is well-known for improving soil fertility, increasing plant nutrient absorption, stimulating soil biological activity, and increasing soil water holding capacity. NHA, a humic acid derived from lignite coal, is known to boost enzymatic activity, increasing the foliage's photosynthetic efficiency. As a result, there is an increase in yield. Malaysia produces neither humic acid nor nitrohumic acid in commercial quantities. Calcium deficiency occurs in tomato and capsicum blossom-end rot (BER), chili fruit end rot, lettuce leaf-burn, internal cabbage rot, mango fruit heart-rot, and fruit split. The NHA has a good effect on improving saline-alkali soil. At the same time, continuous use of NHA can restore saline-alkali land to fertile land. It may also boost fruit firmness, making it more resistant to bruising. The potential local market of this technology is estimated at around RM3.00 (US$0.70) million and approximately RM30.00 (US$7.00) million in the global markets.

  1. Climate change: GROWPINE Slow-release Fertilizer

In traditional practice, pineapple fertilizer is applied three to four times every cropping cycle to suit the needs of varied types and plant growth stages. The leached fertilizers in the soil and labor issue are two typical occurrences in the industry. MARDI developed GROWPINE, a controlled-release fertilizer in the form of nuggets, as one option to reduce labor in fertilizer application. This fertilizer is suitable for high-density pineapple planting systems. It also prevents the fertilizer from leaching into the soil. The GROWPINE nuggets can be used just once, during planting, and it will assure fertilization without wastage or nutrient shortage. The potential local market of this technology is estimated at around RM20.00 (US$4.70) million and approximately RM30.00 (US$7.14) million in global markets.

  1. New health product development from agriculture/ plant Just Great Drink

Bioavailability determines the health advantages of plant antioxidants (flavonoids), which contribute to health benefits. Flavonoids appear to be absorbed in the stomach and small intestine at very modest levels in humans. Most flavonoids are converted to phenolic acids in the colon by colonic bacteria. However, this procedure might take 5 to 24 hours after intake. Flavonoid absorption was also reduced when it came into contact with dietary matrices (lipid and protein). MARDI developed Just Great, a juice with a high concentration of free phenolic acids was created to address this issue.       This product was developed using tropical fruits, edible enzymes, and honey with a high level of free phenolic acid. This supplement can boost antioxidant enzymes, lower cholesterol, and keep white blood cell and liver enzymes in check. The potential local market of this technology is around RM3.00 (US$0.71) million and RM10.00 (US$2.38) million in global markets.

WAY FORWARDS

The Government has launched the 12th Malaysia Development Plan for 2021-2025. The objectives of this Plan are to eradicate hardcore poverty, build a peaceful, fair, and inclusive society, and create a sustainable environment for inclusive and sustainable economic growth. It also aspires to provide employment opportunities to all, protect the environment and natural resources, and achieve mutual prosperity. The Plan emphasizes accelerating the development of the eight strategic and high-impact industries including the bioeconomy in Malaysia. The industries are electrical and electronics (E&E), global services (GS), aerospace, creative, tourism, halal, smart agriculture, and biomass. In addition, efforts will be made to strengthen the participation of small and medium enterprises in the economy and enhance entrepreneurial capacity.

 Adopting technology and innovation is the fundamental catalyst for growth in all sectors. The 12th Malaysia Development Plan will accelerate the adoption of technology and advanced technology to realize new opportunities. This Plan will maximize the potential of agriculture technology as the catalyst for achieving inclusive socioeconomic growth in Malaysia.  

REFERENCES

Bioeconomy corporation (2015). National Bioeconomy Policy. Bioeconomy Malaysia.

European Commission (2012). Innovating for sustainable growth: a bioeconomy forEurope.    Brussels: Publications Office of the European Union.

McCormick, K., & Kautto, N. (2013). The bioeconomy in Europe: An overview.       Sustainability, 5, 2589–260.

Staffas, L., Gustavsson, M., & McCormick, K. (2013). Strategies and policies for the       bioeconomy and bio‐based economy: An analysis of official national approaches. Sustainability, 5, 2751–2769

Golembiewski, B., Sick, N., Broring, S. (2015), The Emerging Research Landscape on Bioeconomy: What has been done so far and what is essential from a technology and           innovation management perspective? Innovative Food Science and Emerging              Technologies, 29, 308-317, http://dx.doi.org/10.1016/j.ifset.2015.03.006 1

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