Industry Research And Development Grant Scheme (IGS)

INTRODUCTION

The Government has launched several incentive schemes to boost Research & Development (R&D) activities, particularly to encourage the private sector to undertake R&D. These schemes have been largely tax- based. Experience has, however, shown that while tax- based incentives have benefited some, they have not encouraged significant R&D ventures. Due to high risk inherent in R&D investments, the private sector has regularly requested the Government for more direct, up-front grant support based on the concept of risk-sharing. In response to this, the Government established the Industry R&D Grant Scheme (IGS) in 1997.

Objectives of IGS Scheme :

	To encourage Malaysian companies to be more innovative in creating new technologies, products and processes which will benefit the national economy;
	To strengthen national competitiveness in the global markets;
	To promote closer cooperation through joint ventures and institutional linkages between the private sector and public sector universities and research institutes; and
	To encourage strategic global and regional linkages in R&D to enhance indigenous technology development.

R&D Definition

Project proposals submitted for grant support under the scheme must meet the definition of R&D as defined in the Promotion of Investment Act (1986) as follows:

"Any systematic or intensive study carried out in the field of science and technology with the objective of using the results of the study for the promotion of the improvement of materials, devices, products, produce or processes, but does not include"-

quality control or routine testing of materials, devices, products or produce;
research in the social sciences or the humanities;
routine data collections;
efficiency surveys or management studies; and
market research or sales promotion.

FORM OF ASSISTANCE

The key technology areas that are given priority are the ones that support the Second Industrial Malaysia (IMP2) clusters with high commercialization prospects. These include biotechnology, advanced manufacturing, advanced materials, automotive, IT and Multimedia, electronics, energy and aerospace and the priority areas as stated in the Malaysia Plan as well as high end technologies that support the development of the 22 industrial cluster under IMP.

Selection Criteria

Selection of projects will take into considerations the extent to which projects that meet the objectives and the conditions of the Scheme. The research must focus on key technology areas with prospects for early commercialisation. The selection criteria also include the potential to strengthen or extend existing areas of comparative advantage and to contribute to the development of high value added products, processes and services. The research also will contribute to training of Malaysians in new technology areas.

Maximum Grant Support

The grant maximum duration is 3 years. The amount approved under IGS will be determined upon the merits of each application but not exceeding 70% of the approved project cost.

Scope of Funding

The scheme will normally provide grants to meet direct project cost such as salary expenditure, plant expenditure, prototype expenditure, pilot plant, and materials consumed, administrative and travel cost related to the project.

The grant applicant is expected to co-invest in the form of cash, personnel or equipment or a combination thereof. Funding is normally provided for three years to encourage early commercialisation.

Funds are disbursed on a reimbursable basis. Disbursements are made on a quarterly basis upon receipt of the project progress report and certified statement of accounts.

Grant Approval

The IGS Inter Agency Committee headed by the Ministry of Science, Technology and Environment will consider project proposals.

Project Monitoring and Reporting

A Project Management Committee (PME) will be established to monitor the technical and commercial progress of every project under the IGS. The PMC will comprise representatives of all project partners. The Chairperson of the PMC will be the applicant of the project or his representatives.

The PMC will undertake to provide quarterly reports within one month on the completion of each milestone, or within one month from the date of which a milestone is to be achieved, whichever is earlier, to provide a final completion report as well as on going reports during the commersialisation phase.

Intellectual Property Rights

A binding letter of understanding between project partners setting out existing and proposed ownership, disposition of intellectual property rights associated with the project, and exploitation of the project results must be lodged before fund are disbursed.

Confidentiality

All information provided by the applicant will be treated as confidential.

Agreement

The grant recipient will be required to sign an agreement relating to the project with the Government.

ELIGIBILITY CRITERIA

Only wholly owned Malaysian companies or Malaysian majority-held joint venture companies are eligible to apply for support under the IGS Scheme. Collaboration with local public research institutions or universities is a requirement. The approved R&D proposals must be undertaken in Malaysia.

HOW TO APPLY

All inquiries on the IGS should be directed to the IGS Secretariat IGS application forms can be accessed and downloaded through MOSTE

Applications for IGS grants must be made on prescribed IGS Applications Forms and soft copy marked "confidential" and send to the IGS Secretariat at the following address:

The IGS Secretariat,

Science and Technology Division,

Ministry of Science, Technology and the Environment,

Level 1, Block C5, Parcel C,

Federal Government Administrative Centre,

62662 Putrajaya.

Tel : 03-8885 8000

Fax: 03-8889 3005

Email: igs@moste.gov.my

Web site : http://www.moste.gov.my/s&t/

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