Developing countries should look to 'applied research' to generate economic returns, said China's first Nobel Prize physics laureate Prof Yang Chen Ning.

He said science and technology will expand to include this new field, which will allow researchers the opportunity to develop original inventions.

"This is absolutely true in less developed countries which have adequate resources. For instance, Malaysia's palm oil industry can be developed through applied research, (thereby) attracting investors," he told a luncheon talk on science and technology development in the 21st century.

Held in Kuala Lumpur on Saturday, it was organised by the Chinese Chamber of Commerce and Industry.

Yang said Malaysia has the human resources and intelligence to develop 'applied research', especially with the calibre of its younger generation.

He said he expects science and technology development to peak in the next 50 years, with emphasis on physics research.