KUALA LUMPUR (Sept 21): The government is aiming to ascend Kuala Lumpur to be among the 20 cities globally that offer the best ecosystem to incubate startup businesses, up from the current 42th place, and a blueprint to achieve the aspiration will be announced in the first quarter of next year, said Minister of Economy Mohd Rafizi Ramli.
Rafizi said Putrajaya intends to achieve its goal by forming a marketplace that is conducive for startups to be incubated, through measures like attracting more foreign venture capitals (VCs) to invest in Malaysia, streamlining efforts to cut red tape that deters the establishment of new businesses, and organising tech conferences by early next year to encourage engagement within the startup community.
“The idea is to place Kuala Lumpur in the top 20 of global startup ecosystems in the world. We are putting everything in place. It's going to be in the first quarter of 2024. We will launch our sectoral blueprint for the startup ecosystem, which is going to be called KL20," he said after launching a RM500 million new fund for Kumpulan Wang Persaraan (Diperbadankan) (KWAP) that focuses on investments in VC funds and startups in Malaysia.
Rafizi said the government hopes the KL20 blueprint will congregate the world's most renowned sovereign investors, VCs, incubators and founders.
“During that conference (KL20), the government will also announce a series of policy changes to make Kuala Lumpur the best place to build a startup with the full commitment of the government.
“Technology is not just a concept or a status symbol. It is something that must affect the lives of people in a positive way. After the blueprints and roadmaps, now is the time to think about the use cases that could be developed: computing powers needed to run advanced models, location nodes for incubators, funding schemes, university tie-ups and a lot more,” he said during the KWAP fund launch.
During a press conference later on Thursday, Rafizi also brushed off concerns that Malaysia’s reputation of having less liberal higher education institutions, lacking judicial independence, and having a conservative society would deter the country’s attractiveness for VCs.
“We will unveil in the KL20 that, at the heart of it, capital follows talents and ideas in startups. The like-mindedness of a group of people usually creates the scene. Once the scene is there, all the other things will fall in place,” he said.
“We have done, I think, adequate work to size up Kuala Lumpur as a digital and startup hub. There's a lot of excitement about it, but there's a lot of pain points as well that we have to remove.
“As we remove one by one, and as the government's streamline agencies [to] focus on [making] it a lot easier for talent and startups to come here, I don't think about all those issues that you have mentioned about, you know — all the political issues, cultural issues — in fact, when it comes to cultural issues, it's actually our plus point. The fact is that Kuala Lumpur is seen as a melting pot. You can get everything here basically,” he added.
Rafizi said based on the government’s recent engagement with foreign VCs, it appears that the latter are keener on investments in Malaysia than locally established VCs.
“Actually, they are more excited than our local VCs to come here. And most of the time, VCs are actually quite agnostic. They follow value, and they follow scalability and talent more than anything else,” he said.