Being a cradle for unicorns

ACCORDING to the World Intellectual Property Organisation, Malaysia is currently ranked 36th out of 132 countries in the 2021 Global Innovation Index (GII).

In the South-East Asian region, the index is currently led by Singapore (8th in global GII), followed by Malaysia, Thailand (43), Vietnam (44), Philippines (51), Brunei (82) and Indonesia (87).

The large number of intellectual property applications reported by MyIPO shows that Malaysia is not short of talent. However, Malaysia is yet to produce a single unicorn company (a start-up valued at a minimum of US$1bil), leaving us behind Singapore, Indonesia, Vietnam and the Philippines despite being ranked higher in the GII than the three countries.

Millions of dollars worth of foreign investments are pouring into Indonesia’s start-up companies where Jeff Bezos, founder of Amazon, is one of the investors. Similar trends can also be seen in Singapore and Vietnam.

This is a critical indicator for the government and its agencies on the need to re-evaluate our current start-up landscape and the effectiveness of initiatives in identifying high-potential companies.

The government through its ministries and agencies, including the Science, Technology and Innovation Ministry, Malaysia Digital Economy Corporation (MDEC), Malaysian Global Innovation and Creativity Centre (MaGIC), Cradle and Malaysian Technology Development Corporation (MTDC), is currently providing various incentives to promote the commercialisation of innovative solutions such as incubator and accelerator programmes.

A centralised proposal submission centre for all government grants and schemes should be set up to coordinate these efforts and make it easier for technopreneurs to seek help and funding. This would also reduce the red tape involved in the application process.

A brief pitch deck presentation to support the application should be encouraged, and the evaluation panels should consist of technopreneurs who understand the market requirements and challenges faced by the business owners.

These measures would create a welcoming landscape for high-potential start-up companies to grab the opportunities offered by the government.

Reducing the turnover time in preparation of the proposals would also attract more companies to apply for the schemes available.

As people in the field of innovation design say, “fail fast, succeed faster”.

Evaluation by the right panel is also important to ensure that the potential of each company is not overlooked. Currently, most of the evaluation panel members are academics or industry representatives who have never run their own company.

As such, a large gap in expectations exists during the evaluation process, making it a painful experience for small start-up companies to drive their inventions locally.

As a result, some resort to moving to other countries to set up their companies.

To ensure that the proposed technology and innovations are adopted and the local start-up companies remain competitive, there must be support and collaboration between government agencies and large industry players.

Large corporations should set up a centralised pool of industrial challenges and get innovative companies to come up with the solutions. This would foster an innovation mindset among local companies. The challenges should not be restricted to the current trends in the market. There are other trends to be looked at that could provide high-market growth in our country.

Malaysia remains a laggard in innovative solutions due to the risk-averse nature of our industries. Incentives should therefore be given to large corporations to galvanise them to collaborate with local technopreneurs instead of foreign consultants in developing and adopting the technologies they require.

Unicorns cannot be produced without taking risks. Without collaboration among all the relevant parties, our future entrepreneurs will continue to lag behind their peers in neighbouring countries. Worse still, more talents might leave the country.

If we get the landscape right to enable small start-ups to thrive, even if we do not manage to breed unicorns, Malaysia would be able to retain the talents it needs to drive its efforts in becoming a high-income nation.

IR DR MOHD ZULHILMI PAIZ ISMADI, Telok Panglima Garang Selangor

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