PATRICK Y-Kin Grove
Technopreneur, co-founder and group CEO of Catcha Group. He is also master developer of Kuala Lumpur Internet City, site of the private-public Digital Free Trade Zone.
Malaysia, in particular, has tremendous potential to be the leader of the digital revolution in Asean. However, in order to leap ahead of our neighbours — for example, Singapore, whose government has been very welcoming of tech businesses — the government and tech leaders need to work hand in hand. Here are our five big ideas for making Malaysia the leader of the Asean digital revolution.
Establish a Team of Eminent Persons solely focused on the tech sector
The council will be made up of tech leaders who have proven their value in the industry and command the respect of the public and private sectors. They would advise the government on its strategy to become the leader of a digital Asean, including advising on the digitisation strategy of government-linked companies, government-linked investment companies and other large incumbents across key industries. The team should be consulted by all ministries and agencies in any matters relating to key issues and policies that would affect tech companies. Technology and the digital agenda should no longer be considered on their own or in a silo, as they affect all industries and walks of life.
Establish KL Internet City (KLIC)
The KLIC is intended to be a public-private sector partnership led by Catcha Group and Malaysia Digital Economy Corp Sdn Bhd, although it is currently on hold due to issues in securing a suitable location. When built, it is envisioned to be a digital hub for global tech giants from China, the US and other major countries around the world targeting Southeast Asia, as well as regional tech leaders and local start-ups. It will facilitate end-to-end support, networking, tech-specific education and knowledge sharing to drive innovation in the digital economy. There will be customised corporate and personal tax incentives to attract tech giants as well as start-ups, investors and the supporting ecosystem (all of which may have looked to Singapore, instead). While Catcha Group is leading the development of KLIC, we feel that additional support and collaboration with the right government agency can hasten the effectiveness of KLIC. An example is the Singapore model where the Economic Development Board actively approaches global companies to set up key offices in the city state.
Technology-dedicated unicorn fund with GLICs as limited partners
There is a substantial funding gap in Malaysia at the growth stage compared with key regional peers. Local Malaysian unicorns (for example, Grab and iflix) have received no growth funding from local capital. Malaysia needs a fund that will fuel and retain the next generation of unicorns in Malaysia. This fund will also go towards setting Malaysia up as a regional headquarters for global unicorns. Together with KLIC, the unicorn fund could be a game changer for the nation’s digital economy. Collectively, they would address all four key building blocks of a vibrant tech ecosystem — education, collaboration, talent and funding. As many of our GLICs still need to strengthen their knowledge and expertise in the tech space, before they can evaluate, execute and harvest the right investments, it might be useful to partner a seasoned private sector partner in the early stages.
Create ample ‘public currency’ and liquidity for tech companies
Bursa Malaysia’s strict profit requirements for listing makes it difficult for disruptive tech start-ups, which typically require big upfront investments. Bursa Malaysia could consider more tech-friendly listing rules for tech companies, as well as allow for the listing of tech funds and incubators. This has been successfully implemented in Australia, the UK and the US. Bursa could also consult with local tech leaders more regularly to understand their needs. These steps may prevent our tech companies from listing abroad, which could be a loss for Bursa Malaysia.
Full digitisation of government services plus ‘carrot or stick’
While some of our government platforms have been digitised, we could take things one step further by pledging a completely digitised public service. Significant advances in technologies like blockchain, artificial intelligence and machine learning would enable payments and other activities to be transacted digitally. This effort should be done via public-private partnerships, where trusted and capable private partners are brought on board to provide their expertise and experience. This would allow the local tech ecosystem to play their part in developing the nation too.
Many traditional companies that are large players in their respective industries are either slow to embrace innovation, fearful of the change that technology brings or just do not understand what is required to make it work. This trepidation is actually a loss to the country as other nations may advance quickly ahead of us. The government could support non-tech incumbents to work together with tech companies by introducing tech-related laws to penalise or reward companies accordingly. They could, for example, impose “tech penalties” on those who fail to adopt digital innovation or provide “tech tax incentives” to reward those who do.