OECD review of HE in regional and city development of Penang

1. OECD review of HE in regional and city development of Penang Feedback by the OECD expert team: first impressions 21 May 2010 Jaana Puukka, OECD IMHE Andrea Hofer, OECD LEED Hena Mukherjee Aims McGuinness, NCHEMS Patrick Dubarle Varghese, UNESCO IIEP www.oecd.org/edu/imhe/regionaldevelopment

2. An increase of one year in the average level of educational attainment is associated with a 4–7% increase in per capita GDP

3. Consider South Korea

4. Reviews of Higher Education in Regional and City Development OECD’s tool to mobilise Higher Education for Economic, Social and Cultural Development of Cities and Regions and to enhance partnership building

5. Regions under review 2008-10 • OECD COUNTRIES • Australia: State of Victoria • Chile: Bío-Bío Region • Germany: Berlin • Italy: Lombardy • Mexico: States of Sonora and Veracruz • Netherlands: Amsterdam and Rotterdam • Spain: Catalonia and Andalusia • US: Southern Arizona • US-Mexico: Paso del Norte • NON-MEMBER ECONOMIES • Brazil: State of Paraná • Israel: the Galilee • Malaysia: Penang 15 regions and city regions in G8 countries and emerging economies

6. What is being reviewed? National and regional context Capacity building Partnership building The reviews draw together HEIs and public and private agencies to identify strategic goals and to work towards them. Importance of context The reviews take account of different national and regional contexts within which the HEIs operate. Social, cultural & environment development innovation HEIs Human capital and skills development Focus of analysis of the OECD review

7. Barriers to engagement

8. Penang needs to move up in the value chain.. to move away from manufacturing to knowledge driven economy and In order to build long-term regional competitiveness and sustainability

9. Strengths & opportunities • Diverse tertiary education sector • Economic growth and full employment • Federal government investment in Northern Corridor • Multi-cultural , multi-ethnic population: innovation potential • UNESCO Heritage site • Evidence of potential: abundance of initiatives, projects: (AARG; sustainability; …)

10. Challenges in the region • Centralisation; Lack of capacity at sub-national levels; Weak tradition of collaboration • Lack of shared vision for regional development and regional steering mechanisms for economic & social development • Dependency on FDI and MNCs; Underdeveloped local industry; Lack of new dynamic entrepreneurship • Low HE attainment rate; Skill shortages; Export of human capital and talent • Social problems; Urban poverty; Rural-urban divide (Northern Corridor); Environmental degradation

11. Challenges linked to HE • Lack of vision and steering mechanisms for HE as a regional system: no pathways, limited collaboration and duplication of efforts • Public good mission and access to HE under threat because of increasing focus on world class excellence , reputation race and revenue generation • Limited dissemination of good practices and shared learning among and within HEIs: Resources are thinly spread limiting impacts • Limited evidence of regional innovation system

12. Moving forward: 4 principles To build long term regional sustainability and competitiveness • IMPROVE educational attainment across the population, reducing the focus on “picking the winners” • PROMOTE new business formation , innovation and development of local industry • ADDRESS the health and environmental needs of the population • CAPITALISE on the existing assets: World Heritage site, coexistence of 3 cultures, Northern corridor

13. Suggestions • ADAPT a co-ordinated system approach to regional development and innovation: master plan with vision, goals, milestones, co-ordination measures and robust evidence base, monitoring progress • DISSEMINATE, EXTEND and SCALE UP the good practices in industry-HE collaboration and workforce development and community outreach and leverage to long term change in HEIs • USE the Region as a laboratory for learning, research , community outreach; business start-up and development • USE evidence-based decision making at all levels and institutions taking advantage of technology • DIVERSIFY the notion of agriculture to rural development; capitalising on ecotourism, culinary tourism, crafts

14. Regional and national context

15. NationalContext • Impressive track record of reducing poverty & raising living standards • Financial crisis – low growth, shrinking foreign and domestic investment • Reliance on manufacturing, low skilled labor, low wages no longer viable • Human capital in critical situation.

16. Regional Context • Robust growth, E&E manufacturing hub slowing down, losing competitive edge • R&D skills and innovation needed to move products up value chain • NCER Initiative stimulus to growth and higher income levels • Region poised to make technological leap? • Critical period for the future of Penang

17. Strengths & achievements • Multiple HEI/training providers, led by USM, to support human capital growth • Will to deal with economic downturn, unemployment issues • Good infrastructure for R&D activities and improving links with industry • NCIA - potential for broad-based , multi-layered , multi-pronged regional growth

18. Challenges • Nimble and responsive institutions with speedier decision-making processes • Development of competitive mechanisms for research grants rather than allocations • Need for robust strategies for retaining and attracting talent • National, state and local collaboration to build synergies, not only with industry

19. Human capital and skills development

20. Strengths & achievements • Forward-Thinking About Need to Move Up Value Chain in Knowledge and Skills of Workforce • High Expectations set by Employers (especially E & E Sector) • Pool of Highly Competent People Who Could Serve as Foundation for New Economy • Potential to develop capacity

21. Challenges • No Long-Term Regional Strategy to Narrow Regional Gap in Knowledge and Skills to Reach Goal of 40% Gross Enrollment Rate by 2020: build the stock of educated people • Fragmented Capacity and Limited Collaboration Among Institutions (Universities, Polytechnics, Community Colleges) • Tendency to: • Emphasize Capacity to Respond to Short-Term Skill Development Needs of Employers • Ignore Hard Work of Reforming Region’s Teaching/Learning Capacity to Transform Region’s Human Capital • Conflicting Signals and Incentives • Policy and Policy Tools Misaligned with Goals • Danger of “Hollowed Out” Human Resource Capacity

22. How to move forward • Recognize that Penang Human Resource Needs Are Inter-Related to Wider Region (NC) • Give Priority to BOTH Short-Term/Rapid Response to Employer Needs and Building Long-Term Teaching/Learning Capacity • Use Opportunities Available to Leverage Internal Change: • APEX Designation • Use Short-Term Training and Projects • Use North Corridor Region as Means to Leverage Change and Promote Collaboration • Consider Adding to University Mission: “to serve the Bottom Thousands in the Region to create a globally competitive Region”

23. Regional Innovation

24. Strengths & achievements • Significant number of students though declining • Innovative social research (AARG, gender issues, Alternative medicine in rural areas) • Successful reskilling mechanism (PSDC) • USM commitment to innovative transfer of technology through USAINS (combining Arts and Technology) • Rich cultural heritage • Northern Corridor policy framework

25. Challenges • Move from low skill/low wage economy to knowledge-based economy • Tech push model • Underinvestment in HC for innovation ; Bias to infrastructure; Supply driven approach for new firm formation • Expected USM budget cutback • Brain Drain; Declining attraction of Penang for students • Limited U/I collaboration • Entrepreneurship: compulsory not customised courses • HE engagement in sustainable development in the region • Insufficient focus on transferable skills • Proliferation of units , centres within USM and confusion of roles

26. How to move forward • Achieve a good balance btw basic and applied research; Build on existing strengths aligning them with regional issues to ensure future sustainability • Build up the RIS moving E&E to design and development;and focusing on niche areas including value added tourism , hallal, pharma, gastronomy, precision engg • Enhance research cooperation between USM, UiTM, UPM and other regional HEIs • Establish a broker between industry and HEIs to promote innovation (one-stop-shop) • Enhance the role of NCIA as coordinator of regional development • Develop a strategy for cultural industries • Improve contribution of USM and other HEIs to local planning and city development • Provide internships to all students ( incl social sciences and arts) to develop capacity for innovation

27. HEIs and new entrepreneurship

28. Opportunities • Development strategy for Penang and Northern Corridor sets great demand • Innovation support for local industry and firm base • New entrepreneurship • Presence of MNCs • Industry internships • Research grants • Interested in promoting spin-outs

29. Achievements • Entrepreneurship support and incubation infrastructure development underway (USAINS Holding, SanggarSains, etc.) • Some degree of flexibility in recruitment and career development (industry retirees, KPIs, 3-track promotion in USM, etc.) • Some degree of industry and community collaboration in USM course design and delivery at school level (Self accreditation of courses at USM, Industry Advisory Panels, etc.) • Research grants for community development

30. Challenges • Narrow understanding of entrepreneurship (lowend, escape unemployment) • Entrepreneurship education compulsory for undergraduates, but no diversified entrepreneurship education activities • Low interaction between USM Schools and students makes interdisciplinary idea & technology scouting difficult • Lack of role models - highend, but reachable • Low student involvement in community engagement activities

31. Way forward • Develop broader understanding of graduate entrepreneurship • Use role models; Involve Alumni ; Celebrate success • Diversify and customise entrepreneurship education and involve successful local and international entrepreneurs in teaching • Promote teambuilding across disciplines for new entrepreneurship • Encourage sharing of research results for commercialisation • Offer mentoring by industry retirees for business start-ups • Invite business plan competition winners from abroad to incubator space

32. Capacity Development for regional engagement

33. Regional engagement by HEIs • ACADEMIC PROGRAMMES : i) courses on entrepreneurship; ii) courses by Wawasan and other HEIs sand PSDC ; iii) English language programmes; iv) Training of Intel staff ; v) Penang government Chair on urban studies in USM; • RESEARCH PROGRAMMES : i) AARG; ii) Poverty studies of 1980s; iii) Action research by SSS with local NGOs on migrant women workers; iv) The Worm Composting Project; v) Nutritional awareness programmes • DIRECT SERVICES: i) Health services by Medical college and AMDI; ii) Incubation services ; iii) Warga project for children; iv) Projects by Womens study centre of USM; v) BJIM for linkages between USM and industry ; vi) UILC for linkages between UiTM with industry • EXPERTISE AND ADVISORY SERVICES: i) USM staff are members of various advisory bodies; ii) USM is the Secretariat for Regional Centre for Expertise ( RCE) for sustainable develooment; iii) COE for EE between USAINS holdings and NCIA.

34. Challenges • Lack of common platform for bridging btw regional priorities and HEIs • Lack of capacity for implementation and monitoring • Skill scarcity as a constraint for regional development • Dilemma between national competitiveness, international standing and local engagement • Centralised decision making and responding to local issues • Lack of awareness for regional linkages • Public institutions and local market demand

35. How to move forward • Strengthen regional engagement as an integral part of the institutional plans of the HEIs: Create awareness and readiness within and among HEIs • Link and share research findings with regional stakeholders • Promote staff engagement in local development through incentives; Reflect it in the criteria for recruitment, promotion and rewards • Map systematically local development requirements and capacity of HEIs to meet the requirements • Identify a co-ordination body to formalize and regularize regional engagement • Develop horizontal linkages among HEIs to co-ordinate local engagement activities Though Public institutions are less responsive to local needs., USM with its newly acquired APEX status and autonomy will be able to play a lead role in local engagement of HEIs and regional needs.