Each year when the national budget is presented, responses vary – some are supportive, while others are critical. In the recent discourse surrounding the 2025 budget, Tan Sri Noor Azlan’s comprehensive analysis within the Madani economic framework was particularly insightful. He highlighted seven key benchmarks, with two areas – competitiveness and human development – standing out for their relevance to the role of Higher Education Institutions (HEIs).
Malaysia’s position in global competitiveness has declined significantly, dropping from 10th place in 2010 to 34th in 2024, according to the IMD World Competitiveness Ranking. This is especially concerning when we consider that our Productivity & Efficiency index ranks even lower, at 53rd. Likewise, our Human Development Index (HDI) currently ranks at 62nd globally, though our national target is to be in the top 25.
These indicators raise a pivotal question: How can HEIs contribute to reversing these trends? And why, despite Malaysian universities’ improved rankings over the past decade, have our national competitiveness and HDI not advanced accordingly?
The Ministry of Higher Education (MOHE) was allocated RM18.1 billion for 2025, a 10.8 percent increase from last year. However, the research allocation of RM600 million is shared with the Ministry of Science, Technology, and Innovation (MOSTI), making it a relatively modest amount, as MOHE previously received around RM450 million annually. Additionally, RM50 million has been set aside to support AI education across five research universities (RUs).
An institutional-based allocation model, however, may not always achieve the intended outcomes. I would advocate for a project-based allocation instead. Research universities, though strong, are not necessarily proficient in all areas. A modest allocation of RM50 million might be better utilised if distributed based on project merits rather than institutional status, fostering collaboration across multiple HEIs and supporting projects with the greatest potential to benefit the nation.
Take the University Malaysia Kelantan (UMK), for example. We have developed our AI and Big Data Centre (AIBIG) and the Faculty of Computing and Data Science, with a curriculum designed in collaboration with industry leaders such as Huawei, Microsoft, and Alibaba. Since 2019, AIBIG has maintained a strong industry focus through numerous projects.
We have also introduced the Tekno Huffaz Foundation Program, blending religious and technical education to develop Muslim scientists and technologists. In several respects, UMK’s approach meets or even surpasses the performance of some RUs in addressing industry demands.
In budgeting, allocation and distribution are critical, but effective implementation is paramount. To ensure impact, we must avoid repeating past mistakes in entrepreneurship initiatives, where large funds were allocated to increase the number of student entrepreneurs and graduate entrepreneurs but only the “awareness KPIs” were met. Despite these efforts, graduate entrepreneurship rates remain below 5%, with even fewer technopreneurs.
In research, HEIs should clarify their objectives: RUs should focus on competitive fundamental (basic) research that is long-term, upstream, and disruptive, following models set by institutions like the National University of Singapore. Meanwhile, Malaysian Technical Universities (MTUN) should stay true to their mandate, emphasising applied research and collaborating with MOSTI and other relevant agencies to generate industry-relevant outcomes.
We should remember the impactful MOHE-MOSTI collaboration on the Public-Private Research Network (PPRN) project, launched by the former Prime Minister Najib in 2014. This initiative bridged gaps between academic researchers, coordinated by MOHE, and industry challenges, managed by MOSTI.
Although it later lost focus following the split between the two ministries, revisiting the project could bring renewed benefits, as highlighted in Malaysia Beyond 2020, a book authored by Diego Comin, a former professor at Harvard Business School. An even more transformative approach might be merging MOHE and MOSTI into a single ministry in the future.
Furthermore, each HEI should establish a Technology Transfer Office (TTO) to support the commercialisation of research outputs, enhancing HEIs’ relevance in national progress. A complete ecosystem and collaborations with established incubators to support spin-offs and startup companies in universities is essential. Each institution should also align its projects with the 10-10 MySTIE Framework by the Academy of Sciences Malaysia, ensuring a cohesive approach toward strategic goals.
When these elements align, Malaysia’s HEIs can truly become catalysts for national competitiveness and human development. Rather than distributing small grants across the board with limited impact, we should focus resources on high-impact projects that can drive our nation’s progress forward.
