Pressing ahead with its plan to build an entrepreneurial economy, Malaysia’s Ministry of Finance will host the fourth Global Entrepreneurship Summit (GES) on October 11-12, 2013. With the expected participation of U.S. President Barack Obama and other heads of state, the summit in Kuala Lumpur is set to be a milestone for Malaysia’s quest to become an entrepreneurship hub. I met with the planners in Kuala Lumpur recently to discuss progress.
The government of Malaysia’s Economic Transformation Program (ETP) which was launched in 2010 has a clear aim to move the country from being an upper-middle to a high-income economy by 2020. As part of its plan, the government has undertaken structural reforms to enhance the entrepreneurial environment. Progress on that front is reflected in the improvements in Malaysia’s Doing Business indicators, where the country ranks among the top 20 in the world in areas such as the ease of getting credit, protecting investors, paying taxes and trading across borders. In terms of tangible impact on the ground, it has been reported that since the start of the ETP, private investment has tripled—recording a 22% growth last year, 12.2% in 2011 and an average of 6.7% between 2000 and 2010. The national 2013 budget aims to boost innovation by allowing firms to use intellectual property rights as collateral to obtain financing for business expansion and by offering significant tax deductions for angel investors.
Top-level support to overcome political barriers has been critical in implementing a strategy that impacts more than headlines. In the education arena, for example, the former Deputy Higher Education Minister Dato’ Saifuddin Abdullah dedicated personal support for Malaysian high-growth entrepreneurs. While these efforts have yet to convert Malaysia into a globally touted startup or innovation hub, Malaysian leaders seem to have taken a thoughtful approach of leveraging specific interventions in a culture where risk-taking is not a natural component of the nation’s DNA. For instance, the Lab2Market Commercialization Programme (L2M) gathers the Ministry of Higher Education, the Ministry of Finance’s Cradle Fund agency, Malaysian research universities and others to work together to catalyze commercialization. There are also funds, similar to the Cradle Fund, that even benefit foreign entrepreneurs who setup their startups in Malaysia.
It is rare to find a country where entrepreneurs themselves give credit to their government but based on my recent, albeit informal, conversations that is largely the case in Malaysia. Of course, the entrepreneurs are still doing the heavy lifting on the ground despite lingering challenges. Take Startup Malaysia. Conceptualized and led by Global Entrepreneurship Week / Malaysia founder and champion Dash Dhakshinamoorthy, Startup Malaysia is a not-for-profit launchpad or an “accelerator plus” that offers several programs to help create and grow scalable startups. This and other non-government related startup activity, particularly active in the tech scene, is attracting investors, such those coming to Malaysia through Silicon Valley Comes to Malaysia and Geeks on a Plane.
All eyes will be on Malaysia and the region in upcoming months. The Global Entrepreneurship Summit intends to convene 3,000 stakeholders from over 50 countries just after the Asia-Pacific Economic Cooperation (APEC) Chief Executive Officers (CEO) Summit in Bali ends. I expect to be there to meet with startup and scale-up policy wonks from around the world and look forward to reporting back on both developments globally as well as the entrepreneurial landscape in Malaysia. If you have ever thought about visiting Malaysia, this event offers some good reasons to go now.
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