Cover Story: The Catalysts
Malaysia’s burgeoning start-up and private business ecosystem has undoubtedly been influenced by a host of government agencies over the last two decades. In fact, these agencies are often credited with creating the favourable conditions that were necessary for Malaysia to shoot up the World Bank’s Doing Business rankings over the last few years.
Enterprise spoke to a number of agencies to get a sense of their effectiveness and impact on the ecosystem. On the whole, while positive strides have been made by all, some agencies are further along than others. For example, in some instances, there has been a lack of simultaneous performance tracking of participating start-ups. In others, there has been no tracking at all.
Additionally, there continues to be functional overlaps between the agencies. These overlaps extend to their various grants, investments and training initiatives. Nevertheless, their leaders have been actively working to minimise overlaps, particularly in the last few years. This is reflected in the more well-defined programme parameters.
For example, all the agencies provide some form of start-up or entrepreneur training. However, Cradle Fund is now well known throughout the market as being entrenched in the early-stage start-up ecosystem, so its bootcamps and training programmes reflect that. Also, barring a brief foray into equity investments, the agency operates almost exclusively as a grant-giving organisation.
The Malaysia Digital Economy Corporation (MDEC), on the other hand, is looking to work with more mature technology companies, those beyond the Series A and B funding rounds. However, it still has long-standing mandates to work with early-stage entrepreneurs and individuals wishing to start online micro-enterprises.
Both Cradle and MDEC have a decidedly technology-heavy bias. While this is undoubtedly important for a digital economy, they have been perceived as alienating certain portions of the start-up and small business ecosystem. After all, some of the country’s most exciting private businesses are not known as tech players. Famous examples include Tealive, fast food franchise Marrybrown (the company boasts more than 500 outlets worldwide), local fashion label Pestle & Mortar, snack food manufacturer Munchy’s and restaurant chain PappaRich.
The Malaysian Global Innovation & Creativity Centre (MaGIC) has taken to pushing the country’s social enterprise agenda and has performed quite admirably in a relatively short span of time. Unlike the other two agencies, MaGIC is not as focused on tech start-ups.
Rather, it has a broader focus on conventional start-ups that are not necessarily entrenched in technology, but provide significant value to the economy. As the youngest of the agencies however, there are gaps in data and performance tracking that otherwise would have added significant value.
SME Corp Malaysia, meanwhile, has had mixed results with its implementation of the SME Masterplan 2012 - 2020. Despite being announced back in 2012, a number of key programmes were only launched in earnest as late as last year. Having said that, a major win for the agency was the establishment of PlaTCOM Ventures, in collaboration with Agensi Inovasi Malaysia. PlaTCOM was envisioned as a national-level entity meant to drive the technology commercialisation portion of the masterplan, which it did to great effect over the years.
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