Malaysia: A hub of entrepreneurial activity

International MBA student and business IT analyst, Sarah Lim Poe Yian, shares her thoughts on the start-up culture in Malaysia and steps the government has taken to foster entrepreneurship…

It’s truly an exciting time to be immersed in the business community in Malaysia – with so many disruptive, innovative ideas being developed, it’s one of the main reasons I chose to pursue an MBA at the University of Strathclyde’s Kuala Lumpur International Centre.

Malaysia has long been home to a successful line of entrepreneurs;  Malaysian born Tan Sri Tony Fernandes turned two aircraft and 250 employees into 130 aircraft and 10,000 employees when he bought AirAsia – a failed airline with $10million debt – for one Malaysian riniggit in 2001 (the equivalent of $0.24).

The ubiquitous USB pen drive was invented by fellow Malaysian, Pua Khein-Seng, also known as the “father of the pen drive”. In recent years tech start-ups are constantly taking off, earning international recognition as Malaysia climbs the list of top global start-up hubs.

Although there’s no one reason behind the success of Malaysia’s start-ups in recent years, there are a number of contributing factors which, combined, provide a fertile environment for new businesses.

The Malaysian government for one, is a strong supporter of entrepreneurship, recognising the importance of nurturing new businesses in the country and the economic role start-ups play in the long run.  In 2010 they unveiled the New Economic Model, a 10 year plan intended to double the country’s per capita income by 2020.  The Model has been very successful in galvanising would-be entrepreneurs to launch their start-ups – particularly tech start-ups – and has since created a thriving community of entrepreneurs and innovation.

Various other schemes have been launched to develop start-ups with support and funding from the government.  ‘1 Malaysia Entrepreneur’ (1MET) was launched in 2013 by the government to enable entrepreneurs from all walks of life to start their own businesses by leveraging private and public resources.  This scheme provides training and financial support for ambitious entrepreneurs to overcome any skills/ knowledge shortage which becomes might hold them back.  Another scheme called ‘Startup Malaysia’ inspires young entrepreneurs to pursue their aspirations, running business boot-camps at schools and running accelerator days and investment for those with more developed business plans.

A notable gripe of Malaysian business owners in the past was the unfortunate amount of red tape encountered when trying to succeed at launching a new venture.  However since the New Economic Model was introduced, it seems that the government is far more motivated to help small businesses grow. The method by which new business can obtain permits has been significantly streamlined, encouraging entrepreneurs to launch businesses across the country.

Further conducive traits Malaysia has is a fairly good supply of skilled workers and a low cost of entry. This is coupled with a favourable dynamic of supply and demand – existing suppliers often fail to capture all the existing gaps in the market and when they do, compromises made on quality of product or service give rise to better quality products and services hence forth!

Finally, the fact that Malaysia is a relatively lower income nation than its neighbour, Singapore, also serves as an catalyst for the development of entrepreneurial solutions to common problems at low prices, naturally spurring on ‘disruptive innovation’ – case in point examples being Air Asia and the USB flash drive.

In short, Malaysia is a goose which can and has laid a golden egg or two.  Indeed, Kuala Lumpur is yet to take its place as the top 20 of the world’s best start-up hubs but local Malaysian start-ups like Groupsmore (now acquired by Groupon) and many others are prime examples of opportunities of the increasing number of start-ups flourishing across the country.

What are your thoughts on the evolving entrepreneurial landscape of Malaysia?  How do you think this contrasts with support available in other countries? Let us know in the comments below.

Image source