The fiscal incentives were focused on priority activities (R&D, training and exports) as well as key products, whose list was decided upon and updated by the Ministry of International Trade and Industry'. These incentives consequently had only a limited effect on MNEs’ willingness to significantly upgrade their activities in Malaysia. Specific schemes were also launched to support R&D3 but suffered from a lack of beneficiaries since MNEs were not eligible to benefit from these grants and most local firms lacked the capabilities to engage in these activities (Rasiah, 2006). This plan set the ground for a strategic and integrated steering of innovation activities in specific sectors.