The new unity government led by Prime Minister Anwar Ibrahim has an opportunity to reset and reboot the ecosystem to accelerate it.
The Malaysian startup ecosystem is lagging behind, despite the success of Carsome, Aerodyne, and the like. The new unity government led by Prime Minister Anwar Ibrahim has an opportunity to reset and reboot the ecosystem to accelerate it. This would include revisiting policies and ideas that have worked in the past and advocating for their continuation or expansion.
The lack of talent in Malaysia has received a lot of attention, but it is not as severe as some may think. Yes, there is a “talent loss” issue, as many of the nation’s brightest minds migrate abroad in search of more favorable circumstances. It’s possible to deal with this, which is good news.
A highly innovative listed construction company in Malaysia offers scholarships to deserving Malaysians to attend some of the best universities in the world.
These innovative thinkers are currently creating and implementing some cutting-edge technologies for the company’s innovation office. Many of the multinational corporations in Penang, including Petronas, have extremely talented local employees as well.
Gaining brainpower is the best defence against “brain drain.” Just take a look at what Singapore, Israel, and the United States have done. The vast majority of profitable businesses in those markets are run by outsiders. Aside: The management teams of many of Singapore’s top unicorns include Malaysians. As of the most recent count, over 100,000 foreign students are enrolled in our local private and public universities.
Permit the brightest international students to remain and work in Malaysia after earning a master’s or doctoral degree with at least a second-class honours designation. Give them a two-year visa so they can work or start a business. Upon approval, grant them a ten-year visa.
The government and large corporations sponsor students to study abroad and bond them for five years or more. Sometimes these students cannot find jobs with their sponsors, so Malaysian startup ecosystem should allow bonded students to join to fulfil their bonds.
Make it easy for startups to hire foreign talent and bring them to Malaysia by simplifying the visa application process and setting clear guidelines. The Malaysian Technology Entrepreneur Program and De Rantau programs are good policies to promote and get more talent in the market.
Create an Asian scholar programme and provide scholarships for bright students from Asia, bonding them to work or create startups in Malaysia. We did this many years ago when we brought students from Central Asia to study here. The CEO/CTO of one of Dr. Sivapalan’s investee companies is from Kyrgyzstan, and he is a brilliant talent. It is time to restart this program.
Recommendations for making it easier for foreigners to set up VC funds in Malaysia include having a specific visa for investors, incentivizing the prototyping of ideas for the creation of new startups, and exposing school students to entrepreneurship.
Indelible Ventures Managing Partner Kevin Brockland was able to bring foreign money to invest in Malaysian startup ecosystem through perseverance. Silicon Valley has largely been built on the talent of Stanford University, and great ideas are incubating in universities all over Malaysia.
The second issue is to create greater market access opportunities for technology creators and encourage SMEs to adopt more technology. To do this, we should encourage the use of Malaysian solutions locally and export them internationally, overcoming skepticism about local products and a lack of funds to purchase these technologies.
This will create a virtuous cycle of innovation that benefits multiple strata of the economy. The SME Digitization Grant implemented during the pandemic was successful in encouraging broad adoption in SMEs.
The government should continue providing matching grants for the purchase of local technology, with an increased budget of US$22.9 million per year and up to US$4,580 per company for any registered and approved technology product or solution through MDEC.
A double tax benefit of up to RM 100,000 per company should be given to larger companies that adopt more expensive technologies to improve productivity and analytics for their businesses, especially in manufacturing.
A “Buy Malaysian First” policy should be implemented for publicly listed companies, government linked companies, and the government to buy local technologies to create a culture of supporting local technology providers.
This will encourage more medium and large companies to adopt robotics and machine based technologies like the Internet of Things (IoT) to improve productivity and analytics for their businesses. In China, South Korea, and Japan, this has become a culture, and we must create this same culture in Malaysia, starting with the government, GLCs, and PLCs.