However, for a firm spending more than 1% of its gross sales on R&D, the double deduction scheme gave no incentive for increasing R&D spending, since the firm already enjoyed tax exemption as a result of its high-tech status. Similarly, for a firm that undertook investments in a manner qualifying as strategic, the double deduction scheme was redundant, and thus an ineffective incentive for increasing R&D spending in firms (WB, 2007). Efforts to diversify production activities and increase training and R&D activities and seek greater market penetration into higher value added activities were strengthened with the Human Resource Development Act and the creation of the HRD Fund (HRDF). The HRDF was operational in 1993 and manufacturing firms with an employment size of 50 or more were required to pay 1% of their payroll to the HRD council, which they could then reclaim for approved training expenses.