Elevating the country to be a leading startup destination


Economics Minister Rafizi Ramli — LOW LAY PHON/The Star

KUALA LUMPUR: It is an ambitious target for Malaysia to be in the top 20 startup ecosystems in the world by 2030, given that many countries including Singapore, had a head start in this area.

In order to achieve its target, Malaysia is taking a holistic approach to elevate itself as a destination for startups with plans to turn Kuala Lumpur into a bustling regional startup and digital hub.

However, Economy Minister Rafizi Ramli admitted that one of the major challenges in reaching its goal is the ability of the government to change the society’s success model and risk aversion.

“Malaysia as a country has built its economy on large scale sectors; plantations, oil and gas, electronics, so much so for the last 50 years, we looked at employment at big industries as affirmation of success.

“So we have talent in this country. If you are a top student and a good talent, chances are they would want to have a pretty stable corporate career,” Rafizi said at a panel session of the KL20 Summit 2024 yesterday.

He added that the lack of talent choosing a career path in startups posed a challenge to the country, which is pushing for a higher value type of economic activity, especially in startup and technology.

“I realised that if you want to strike it on your own here, it is very difficult.

“It is difficult because it is risky and it becomes a vicious cycle. Because it is risky, the capital wouldn’t come in. The whole ecosystem does not support it. The most challenging of all the pillars of the ecosystem is changing society’s appetite for risk, success, innovation and that cannot be done in the overall startup ecosystem.

“Ultimately, we have to change the fibre of society and that goes to the education system, the government’s focus and that is precisely why we want to send the signal to society that the government takes risks seriously,” Rafizi explained.

To reduce the risk, Khazanah Nasional Bhd managing director Datuk Feisal Zahir emphasised on the importance of the availability and continuity of capital for startups; from early to later stages.

“When you try something and you know there is not enough capital in the valley of death, then how do you grow? Or how do you start because even at the seed level, it is very difficult.

“We have an investing mandate but because of the developmental nature, and we have a long gestation period in terms of returns, we can take bigger risks and bring in partners that look at the whole ecosystem,” Feisal said.

In terms of the key milestones to measure the success of the KL20 Action Plan, Rafizi hopes to see a diverse set of global talent setting base here, as well as turning more of these startups to be listed on Bursa Malaysia.

“Further down the line, I do want to see early success stories, not just Malaysian grown startups making it big, either surpassing Series C, going more to RM1bil or RM2bil valuation. I want to see a confluence of tech talents from around the world here.“I want to see more Indians, Singaporeans, Taiwanese, Europeans, etc, because that addresses the sustainability part, which is a key success measurement that perhaps we normally do not talk about when we talk about startups,” he said.

Rafizi added that he hoped to see a pipeline of companies ready to go for listing locally, be it on the ACE Market, LEAP Market or the Main Market of Bursa Malaysia.

“For many years, that has been our problem as an economy, we have a very limited pool of companies to go for listing. That’s because most of our corporations are in traditional sectors. This is a country that is recognised globally as one of the most important semiconductor players in the world. “Despite having such a strong electrical and electronics global exporter, our tech weightage on our local stock market is only 4%. We certainly missed out the last few months of the bull run in the tech market,” he said.

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