This article first appeared in Forum, The Edge Malaysia Weekly on March 6, 2023 - March 12, 2023

In August 2022, the US signed into law its Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 or more commonly known as the CHIPS Act. The CHIPS Act seeks to drive investments in American semiconductor manufacturing capacity and to jump-start research, development and commercialisation of leading-edge technologies including quantum computing, artificial intelligence (AI), clean energy and others.

About 60 years ago, on May 25, 1961, US President John F Kennedy proposed in Congress that the US “… should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to the Earth”. They achieved just that in July 1969. With this announcement, Kennedy essentially gave the US and, in particular, Nasa, a clear “moonshot” direction, to which they would dedicate as many resources as possible.

The US did not just choose to put a man on the moon by accident. They did so because there was a perception among American citizens that the US was losing to the Soviet Union in the Space Race, following the launch of the Soviet Union’s satellite Sputnik 1 and the success of Russian cosmonaut Yuri Gagarin in being the first human in space. Amidst the context of a Cold War, the US may have felt compelled, desperate even, to reclaim technological superiority against the might of the Communist bloc.

Similarly, the US isn’t focusing on semiconductors in its CHIPS Act in a vacuum. It is doing so against the global backdrop of rising geopolitical tensions between itself and China. Kai-Fu Lee, a global leading expert in AI, makes a compelling argument in his book, AI Superpowers, that China has many of the ingredients it needs to be the world’s leading AI superpower. Yet, for all its strengths, AI will, at least for the foreseeable future, be driven by advancements in computing power, which in turn means it will be driven by advancements in semiconductor technology. As such, for its own strategic purposes, the US will need to catch up in the semiconductor manufacturing race, which it has essentially ceded primarily to Samsung in Korea and TSMC in Taiwan.

Thus, the history of science and technology is intertwined with the history of global politics. In his book, Horizons: The Global Origins of Modern Science, University of Warwick professor in the history of science and technology, James Poskett, writes, “… the best way to understand the history of modern science is to think in terms of key moments in global history … periods of world historical change shaped the development of modern science. Global connections brought different people and scientific cultures together, sometimes out of choice, often by force”.

The book is a fun and informative read, focused on the development of science and technology outside of Europe. Throughout the book, Poskett shows how global political history drove the development of science and technology all over the world. Yes, we know that the Age of Exploration came hand in hand with developments in seafaring navigation technology. But at the same time, from a local islander named Tupaia, the British expedition exploring the Polynesian islands learnt a new form of map-making where distances between locations weren’t measured by space but by time. Intuitively, this was more practical — who cares if the distance between A and B is 500km, what matters more is how much time we need to cross that distance.

Another example that Poskett writes about is the exchange networks between Europe and the East. For instance, Italian city states played host to Ottoman envoys seeking to build trading networks, while Venetian traders and Vatican diplomats could be found in the streets of Damascus and Istanbul. But beyond these trade networks came, as well, knowledge exchanges. When Nicolaus Copernicus set out a model of a heliocentric universe in his book, On the Revolutions of the Heavenly Spheres, upending established Greek astronomy, he cited at least five Islamic authors. But Copernicus did not read Arabic; instead, Latin and Greek editions of major works in Arabic astronomy were widely available in 16th century Europe. He also relied on existing Arabic astronomical tables, collated by a group of Jewish mathematicians who then translated them into Spanish and Latin.

We are now living in a world where “something historic” is absolutely happening. Whether it is Covid-19, US-China tensions or the ongoing climate crisis, these global developments will undoubtedly shape the future of science and technology. For the more pragmatic among us, we can imagine that this is true for one salient reason: It is much easier to get state-directed funding when the state believes it faces an existential risk. As such, the US has responded with the CHIPS Act, which provides new funding of US$280 billion (RM1.25 trillion). Malaysia has to also figure out its own strategy.

We do not, however, have US$280 billion. And in fact, when it comes to semiconductors, that may not be enough. Morris Chang, the founder of TSMC, essentially scoffed when he learnt that the US was providing “only” US$50 billion for semiconductor manufacturing. But there are other things we can do. They may require some ministries or agencies to lose turf, but that is better than an entire nation losing ground globally.

Firstly, we must embrace global talent, especially for high-value-added economic activities in which Malaysia may be competitive. Recently, I saw a goalscorer for the Malaysian national football team called Sergio Aguero. For reference, there is a Sergio Aguero on the global football stage who was one of the greatest strikers in history. This Sergio Aguero, however, was not that Sergio Aguero, but instead a nationalised Argentinian footballer who could now play (and score) for the Malaysian national team, ranked 145th in the world (at last check). I have nothing against our Sergio Aguero, but if we can nationalise a talent for the 145th team in the world, surely we can expedite employment passes and working permits, even permanent residencies for the talent we might need to both boost our science and technology development as well as develop our domestic talent.

Secondly, if I go to a bank, I just want to go to one counter and have them sort out everything I need. I don’t want to be sent to five different counters and fill out 18 different forms. In a global arena where capital is mobile and firms are looking to reshore, the recipients of those firms and their capital will be the ones who are the most coordinated. No investor cares if issue X is under one ministry but issue Y is under a different ministry. Unfortunately, silos still matter in our country. But we have to dismantle them to improve coordination, even if some ministries may lose turf.

Global politics have historically coincided with the advancement of science and technology, in large part because global competition — be it among companies, firms or individuals — allows for greater funding of innovation. We are in such an “era”. While Malaysia may not have the resources to pass a CHIPS Act, it is inexcusable if we do not open ourselves up to greater inflows of talent and knowledge, and work together to achieve that. Other countries won’t hesitate to import high-quality Malaysians (or anyone else), so why should we? Future generations may understand the financial limits in our decisions today, but they may not be so easily forgiving of short-sightedness and a sense of turf possessiveness.

Nicholas Khaw is an economist and head of research at Khazanah Nasional Bhd

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