Recent developments might be a game changer for Southeast Asia’s start-up ecosystem.
In a 1991 working paper entitled “the way Forward”, Tun Dr Mahathir Mohamad laid out nine challenges in turning Malaysia into a developed nation by the year 2020. Among them was the challenge of establishing an innovative and forwardlooking society—one that would not only consume technology but also contribute to technological advancements in the country. “Entrepreneurs must be spawned,” Tun Mahathir wrote. “Where necessary, technological and training help must be extended; and infrastructural support must be given.”
With this in mind, the Multimedia Super Corridor was inaugurated in 1996, five years after the former Prime Minister unveiled his plans. Now known as MSC Malaysia, the original project covered an area of 750sqkm that included the Twin Towers, KL Tower, KLIA, Putrajaya and Cyberjaya—a 50km long “corridor” that aimed to be the hub of innovation in technology.
Two decades on, the MSC seems to have fizzled out, but new developments could bring much needed revitalisation to the project. Esquire explores a small pocket in the world of start-ups to find out what could potentially turn Malaysia into the region’s next tech hub.
a 2011 study Conducted by Ritsumeikan Asia Pacific University in Japan on the impact of the MSC indicates that the project has done reasonably well in impacting Malaysia’s ICT industry. Between 2004 to 2010, a total of 2,520 Mscaffiliated entities produced a combined revenue of RM 92.8 billion, created 99,590 knowledge-based jobs, and garnered RM1,512 million in investment for research and development. The project has hit some of its targets, the report states, but with “additional room for improvement”. The original MSC corridor has grown to include “cyber-cities” and “cyber-centres” in states such as Penang, Kedah, Johor and Melaka. Within the Klang Valley are 20 cyber-centres—some are well-known properties such as Mid Valley City, the Intermark Quill 9 and Jaya 33—while another seven developments stamped as Msc-approved are in the works.
But the MSC, according to Khailee Ng, serial entrepreneur-turned-venture capitalist and start-up mentor, is just infrastructure. “It’s the hardware, and it works fine.” As a long-time en- trepreneur, Ng believes the government, through different venture capital agencies and accelerator programs, has provided enough funding and incentives to kick-start a healthy ecosystem. Ng should know personally: he was one of the early entrepreneurs who went through the grind, receiving a RM150,000 grant from the Multimedia Development Corporation (the agency tasked with overseeing the development of the MSC and is known as Mdec) to build Groupsmore, the first start-up he founded with partner Joel Neoh, which was later acquired by Groupon.
“Huge companies are made not because the government is doing things right,” Ng says, “they’re made in spite of the government doing things wrong.” More importantly to Ng is what he calls “software and networks” that need catching up. “The urban rakyat has a default bias of hating on the government,” he says. “And that’s what the rakyat has to realise: at the end of the day, it’s about Malaysians themselves getting off their ass and getting s**t done.”
Changing a mindset is never easy, but things seem less far-fetched when one can build on a concrete example of how other successful startup ecosystems became reality. Cheryl Yeoh, Chief Executive Officer of the year-old Malaysian Global Innovation and Creativity Centre (MAGIC) intends to draw on Chile’s start-up ecosystem that began barely four years ago, but has propelled itself into the 20th-best ecosystem in the start-up world. The takeaway that Yeoh gets from the Start-up Chile program in Santiago is that if the program were modeled to be more insular and more focused on
Cheryl Yeoh CEO of MAGIC.
Khailee Ng Managing Partner, 500 Startups.