Malaysia: Gateway to the Fastest Growing Region in the World

As the ASEAN region continues to boom, investment opportunities in the region have become even more alluring.

However, the cultural complexities of the countries within ASEAN add to the challenges of forming a sound investment strategy. Understanding the big picture includes taking into consideration various factors such as the economics of a country’s Gross National Income (GNI), social landscape, state of digital adoption and talent resources.

So, what would be one of the most attractive investment destinations in the ASEAN region today? Which country would best leverage your investment and deliver significant growth for you?

Not only one of the most visited tourist locations in the world, Malaysia also boasts an economic ecosystem offering a rich ground for investment considerations. Located at the heart of ASEAN, the country is an ideal and cost-effective gateway to access the region’s population base of 640 million with a collective Gross Domestic Product (GDP) of US$2.5 trillion. With strong economic fundamentals, the World Bank anticipates Malaysia to become a high-income nation as early as the year 2020.

One of the fastest growing sectors in Malaysia is its digital economy, which consistently continues to be on upward trajectory and accelerates the country’s economic development.

Digital Economy: A Catalyst for Dynamic Growth

Malaysia’s digital economy development is impressive. In 2016, the digital economy contributed 18.2% (RM224 billion, or at current exchange rate, US$54 billion) to Malaysia’s economy, as indicated by Department of Statistics Malaysia. The contribution to the country’s total GDP comes from the digital industry (RM149.4 billion /US$36 billion) and the eCommerce industry (RM74.6 billion/US$18 billion). The digital industry continues to focus on exports (RM216.9 billion/US$52.23 billion); and employs more than 1.07 million people.

This growth seen by Malaysia is a result of its forward-looking vision on driving itself into becoming a highly productive economy through digital transformation. Various government agencies and ministries work in collaboration with the industry to drive digital transformation. Under the Ministry of Communications & Multimedia, Malaysia Digital Economy Corporation (MDEC) is the lead agency responsible for helping to chart a path for the holistic development of the nation’s digital economy. MDEC’s implementation efforts are centred on four strategic pillars – driving investments, building local tech champions to regional and global markets, catalysing digital innovation ecosystems to nurture start-ups and propagating digital inclusivity among its citizens.

Wooing Foreign Direct Investment

Malaysia has been at the forefront of foreign direct investment and these investments came from various parts of the world such as US, UK, Netherlands, Singapore, Germany, China, India, Australia, and Japan. Global corporations and hyper growth technology companies have been attracted to the conduciveness of setting up businesses in Malaysia. These companies have invested, and continue to invest, in technology and platform, digital and global business services as well as digital content development, to expand these services regionally and globally from Malaysia as their hub.

Malaysia’s position as a favoured country for digital investment has been recognized by its consistent 3rd ranking (behind world giants India and China) in AT Kearney’s Global Services Location Index since the ranking’s inception in 2004.

To ensure that Malaysia continues to attract foreign direct investment, various digital initiatives that fuel investment opportunities have been developed and implemented, including a number of high impact national programmes.  For example, to keep abreast of the Fourth Industrial Revolution, new frameworks are being developed under Malaysia’s Digital Economy plan focusing on Big Data Analytics, eCommerce and Internet of Things (IoT), offering massive growth potential.

In 2018, Malaysia started to promote the adoption and application of Artificial Intelligence (AI) technologies. With the objectives of maximising social and economic benefits, Malaysia is accelerating AI development across three key areas: Talent; Industry Development; and High Impact Use Cases in the areas of smart cities and smart manufacturing, resting on a foundation of progressive regulatory framework.

Another example is the Digital Free Trade Zone (DFTZ) – the world’s first outside of China that aims to capitalise on the exponential growth of the internet economy and cross-border eCommerce. Established to streamline and augment Malaysia’s constantly growing eCommerce space, this platform will also boost cross-border trade and position Malaysia as a transhipment hub for eCommerce logistics.

A thriving digital ecosystem

Malaysia is constantly looking at initiatives to transform its human capital infrastructure to be ready for the Fourth Industrial Revolution. Coupled with its proficiency in languages including English and other Asian languages such as Japanese, Korean, Mandarin, Bahasa, Hindi, Arabic and others, as well as the investment in the hard infrastructure of roads, railways, ports and high-speed internet connectivity, this has undoubtedly been the major attraction for enterprises to expand their operations in Malaysia.

With its diverse multilingual and multicultural population, Malaysia offers a conducive business environment through its unique cultural diversity, making integration of local talent to be part of the global workforce a seamless experience to many global multinationals and unicorns.

The government of Malaysia also places a major emphasis on talent development for the future of work, focusing from primary to tertiary education. MDEC is supporting the Ministry of Education’s efforts to integrate computational thinking including coding and other digital making activities into the national school syllabus. Another core initiative is a joint public-private-academia collaboration to strengthen tertiary-level digital technology curricula and teaching.

These efforts have already seen results and international recognition. Malaysia is 2nd in ASEAN in the Digital Evolution Index 2017; 5th in Asia in the Huawei Global Connectivity Index 2018; 6th in Asia for the Networked Readiness Index 2016 and the Asian Digital Transformation Index 2018; 7th in Asia in the ICT Development Index 2017; and 8th in Asia for the Cloud Readiness Index 2018. Its tech savvy population was also recognised by a 2016 Thomson Reuters Foundation poll, which ranked Malaysia the 9th best place to be a social entrepreneur in the world.

As of now, thousands of companies from 60 nations have already cast their anchors in Malaysia. Do not miss out on your opportunity to expand from Malaysia to Asia and the world!

Hew Wee Choong is the Vice President for Investment and Industry Development in MDEC.

Outsmarting Smart Robots

How can humans outsmart robots equipped with artificial intelligence (AI)? This is the million-dollar question that one group of experts the world over is scrambling to answer, while another group races to build machines with near-human capabilities.

One among many predictions is by McKinsey Global Institute, which sees millions of jobs being be wiped out. Others take on a more optimistic view: humans will survive the 4th industrial revolution. Accenture suggests – that if we pick the best from each – humans and machines will work together in harmony, A recent Harvard University study shows that doctors are able to diagnose cancer with greater accuracy when working with AI.

Nevertheless, there is a consensus that jobs are changing in drastic ways and getting our current and future workforce ready for such changes is critical. More of the same will no longer be enough.

Skills to complement AI

As machines become more intelligent, three types of complementary skills are expected to become more important for people to develop.

The easiest to teach at scale are technical skills: Both basic and advanced technical skills are equally important. While advanced digital skills have received much attention – such as coding, data analytics, etc. – basic digital skills will be just as critical for the current workforce to survive the changing workplace.

Learning how to use digital productivity tools, doing online research and transacting are a few of the basic skills many still struggle with, especially in underserved communities like urban poor, rural, disabled and elderly communities. Earlier this year, Sundar Pichai, Google CEO affirmed this when talking about Google’s move to train people with basic digital skills.

Coming back to advanced technical skills, these will be most critical for the next generation of workforce.  Digital natives will need to know how to harness and complement their intelligent-robotic counterparts. A McKinsey survey of 3000 business leaders suggests that demand for technical skills is expected to grow the most compared to the 3 types of skills mentioned in this article, hence the emphasis on STEM, computational thinking, computer science and coding in educational institutions must continue, be it in schools or universities.

Aligned to this, MDEC is supporting the Ministry of Education’s efforts to integrate computational thinking, computer science including coding into the national school syllabus. We are also work closely with a premier group of local universities to strengthen tertiary-level Computer Science curricula and teaching.

The second set of essential skills for the future workforce are higher cognitive skills, or higher order thinking skills. These include creativity, critical thinking, decision making, complex information processing. Basic cognitive skills such as, literacy and numeracy which have been a strong focus point for industrial era education systems, are increasingly becoming hygiene factors, i.e. important for basic survival, but do not give us any edge over AI machines. Higher cognitive skills require deep learning experiences, for example, guiding a student to be aware and understand his/her own thought process. This kind of deep learning is challenging to deploy at scale, and will require significant changes across the education delivery system.

The third set of skills are unique to human beings, i.e. social and emotional skills. These are expected to be the hardest for AI to replace. Inherent but less emphasised skills like adaptability, interpersonal communication, negotiation, empathy, leadership, managing people and relationships, entrepreneurship and innovation, teaching and training people are critical if we are to remain relevant in the future workplace. These skills are often neglected in most conventional education systems which tend to focus more on academic excellence.

Never stop learning

As technology and roles in the workplace evolve, forecasts suggest that most people will have 4-5 careers (not jobs) in their lifetime, hence re-skilling will become extremely important. Formal education may prepare us for our first careers. Thereafter, life-long learning via self-directed, informal learning, and on-the-job training will be key to facing rapidly evolving jobs of the future.  Employers can no longer expect graduates or for that matter, any new employee to come fully-equipped for the role. Instead, they must be prepared to invest in training and re-training staff. From a policy perspective, we must find ways to encourage the culture of life-long learning; and support employers, especially SMEs to provide on-the-job training. In Singapore, for example, all citizens aged 25 and above receive periodic credits of SGD500 to pursue training courses for in-demand skills. Here in Malaysia, similar efforts could be prioritised for those at risk of being displaced by AI.

Education is for life, not just to make a living

Given rapid changes and uncertainty in the type of skills/jobs that will be in demand, experts suggest that universities should prepare students for life, emphasising cross-curricular learning instead of over-specialisation for specific jobs. There is also consensus that real-world experiences will be highly valued compared to pure classroom learning, hence, tertiary institutions and employers must work together to structure robust internship or apprenticeship programmes. Given these scenarios, universities need to re-think and re-focus on the fundamentals of education, while regulatory and policy measures are needed to encourage employers to offer internships or apprenticeships. With regards to the latter, the UK government’s apprenticeship funding model is interesting to study.

There’s obviously a lot that needs to be done to prepare our current and next generation for a future with AI. Tremendous political will and excellent coordination between the powers-that-be will be required to move this massive mountain in the right direction. But we must play our part: Simple acts like taking an online course, and encouraging life-long learning among our employees, colleagues, and loved ones. As the saying goes, “Be the change that you wish to see in the world.” So, go ahead and secure your seat in the AI world.

Sumitra Nair is the Vice President for Talent & Digital Entrepreneurship in MDEC.

POV from Silicon Valley: Malaysia is Helping to Reimagine Commerce in the Wake of the “Retail Apocalypse”

The economic prospects of traditional retailers in many global markets are in a widespread state of deterioration.  Their situation even has its own term of art – “retail apocalypse” which actually now exists as a Wikipedia entry.  Even strong companies and those who realize a material share of their revenue from e-commerce sales are feeling pressure to close stores. Using the US market as an example, over 20,000 retail stores closed between 2013 and 2018. Close to 7000 of these closed in 2017 alone, despite very high consumer confidence ratings, low unemployment and continued growth of the US economy.

Beyond the retailers themselves, global brands are rethinking their distribution strategies in ways that indicate a pivot toward e-commerce. Nike, for example, forecast at its October 2017 Investor Day conference that its e-commerce sales would represent 66% of its corporate revenue growth over the next five years. At that same conference, Nike also announced a massive revamp of its wholesale strategy, indicating that it would place a primary focus on just 40 out of its current 30,000 retailers. The message is clear, simply distributing product out to lots of stores is not their going-forward priority – e-commerce makes the vast majority of those physical points-of-sale obsolete.

The global offline-to-online movement is unquestionably a factor in the decline of traditional retail, but not the sole factor. US government statistics show that e-commerce sales in 2017 still account for less than 10% of all retail sales.  A driving factor in the recent run-up in retail store closings is the large debt load carried by large traditional retailers, which in many cases is a consequence of leveraged buyouts made by private equity firms in recent years. Rising interest rates and changing market conditions are making this debt more difficult to refinance than in the past, driving several large retailers toward, or into bankruptcy.

As it relates to the realm of MDEC, there are at least two important takeaways from this trend.  The first is that the dominant position large retail corporations hold over manufacturers in reaching consumer markets is rapidly coming to an end.  While neither these companies nor brick and mortar retail stores would ever completely disappear, their consumer trust and convenience advantages over dealing directly with product suppliers of any size through e-commerce have been decimated.  Consumers worldwide are becoming accustomed to using platforms such as Alibaba’s Electronic World Trade Platform (eWTP) to purchase goods directly from SMEs, and infrastructural improvements such as Malaysia’s Digital Free Trade Zone (DFTZ) make it possible for those goods to delivered anywhere in the world in three days or less.  The opportunities for SMEs to serve customers anywhere in the world are now already large, and destined to do nothing but increase.

The second, as illustrated by Nike’s announcement, is the major pivot of global brands toward direct distribution through e-commerce on a mass scale. Datuk Yasmin identified our opportunity this way:  “Through the DFTZ, Malaysia is optimized for e-commerce transshipment, with the infrastructure, policies, procedures, talent pool, and experience to provide the world-class support global leaders require. We are optimized end-to-end. We are already receiving enquiries from global brands who understand the potential of what we have built here, as well as the larger market opportunity.” Strategically situated as the gateway to Southeast Asia’s 630 million consumers, Malaysia is destined to become one of the world’s handful of major e-commerce hubs, and a principal contributor to the reimagining of commerce.

Perhaps more importantly, at roughtly 10% of total trade, e-commerce has cleared hit tipping point and yet is just at the early innings of a global shift towards an omni-channel consumer experience.

Datuk Dan E Khoo is the President of MDEC Americas Inc; a Silicon Valley organization established to drive the global expansion of Malaysia’s digital economy.

“Building Local Tech Champions” means Growing Fast and Going Global

Uber has exited the region, selling out to Grab. Was it a lack of appetite, being late to the game, or simply not understanding how to negotiate outside their home market in the US?

Before I come to that, here are a couple of intriguing stories that came to my mind when thinking about the intricacies of the local business landscape: First, the Malaysian used-car platform company, Carsome raised US$19 million in March 2018. The funding was led by Burda Principal Investments, through their Singapore office. StoreHub, a Malaysian company that built a Cloud-based Point of Sale (POS) application that is used by 3,000 retail stores across 15 countries, raised US$5.1 million from Vertex Ventures. Vertex, an investor in Grab, is owned by Singapore’s Temasek Capital.

Then you may remember that last year, Soft Space, the Malaysian Fintech company raised US$5 million from Japan’s Transcosmos. Carsome, StoreHub and Soft Space, join almost 3,000 other companies that have been accorded MSC (Multimedia Supercorridor) status by Malaysia Digital Economy Corporation (MDEC). Since its inception in 1996, MDEC has been actively pursuing Malaysia’s digital agenda. This was done by initially encouraging technology companies to set up in Cyberjaya, and then bringing in shared services companies, and now by working to build globally competitive Malaysian headquarters companies.

In my last article, I provided examples of the first generation of Malaysian companies, many of whom achieved billion-Ringgit valuations with very little capital. Starting with founder’s money, these companies at best raised two to three million US dollars, which had to take them straight to an IPO. With few exceptions, except Grab and iflix, which raised US$ $170 million, Malaysian companies have not appeared on the radar of major VC firms.

Money chasing Malaysian deals

Well, as they say, times have changed: Money is now chasing local deals because of the ability of Malaysian companies to navigate the fragmented and tightly regulated markets of Southeast Asia. This is very important to note, as this is changing the landscape in Malaysia.

N2N Connect, a company that provides securities trading platforms used its Malaysia-base to grow into the region. We are fortunate to have a forward-thinking central bank. In addition to allowing for crowd funding platforms, and a sandbox for testing of new products, Bank Negara Malaysia (BNM) recently finalised electronic Know-Your-Customer (e-KYC) guidelines.

This is a huge step, allowing for much faster and more seamless customer acquisition. These guidelines made it possible for Internet payment provider iPay88 to launch a virtual account for the “unbanked” market.

I am pleased that MDEC has continued to play an active role in building the ecosystem that has allowed these companies to flourish. We maintain a constant and consistent dialogue with several stakeholders, including BNM and the Ministry of Higher Education – where we led the push to introduce coding classes in schools. While we continue to work on the digitalization agenda, we recognise an urgent need to bring larger VCs into Malaysia.

Companies like Carsome, StoreHub and Soft Space are building businesses, which are like utilities. There are differences though if one was to compare them with Tenaga or Celcom, Maxis and Digi. What are the differences? Utility businesses have large capex needs but their business is protected by licenses. They didn’t start off with a small bunch of customers and build the infrastructure from customer revenues; that business model just doesn’t work that way. Build a small power plant in Petaling Jaya, supply a few hundred customers and from the revenue build a megawatt plant. Big money is raised up front.

Scale up at speed

Well, the startup guys don’t have the protection of a license, so they start with a small bunch of customers and what is typically called a “Minimum Viable Product.” They then get feedback, gain traction and often go through a few product iterations. Once that has been achieved they need money – lots of it – to build the infrastructure, delivery capability and capture market opportunity ahead of potential competition. As we say in MDEC, it’s a matter of “Grow Fast and Go Global”.

Just last week, Zilingo, a Singapore based start-up raised US54 million for an expansion into the region from their base in Bengalaru, capital of the Indian state of Karnataka. That’s big money! The company provides a platform for customers to browse and buy fashion products from retailers in Southeast Asia. Since inception in October 2015, Zilingo has raised US82 million, to launch in Thailand and expand into Malaysia, Indonesia, the Philippines and Vietnam. Like other platforms, the technology relies on artificial intelligence – AI – to learn buyer behaviour and then propose the “right” product.

The need to achieve scale and leverage on engineering capability probably led GHL Systems Berhad to acquire rival company Paysys (M) Sdn Bhd for RM80 million, with half paid in cash and the balance in shares. GHL is no stranger to corporate exercises. In 2013, GHL acquired e-Pay Asia Limited, a company founded by Simon Loh, now vice-Chairman of GHL. Local PE firm, Creador, sold its stake to Actis in 2017, and they are now are pushing for growth in the payments, or fintech space, which is seeing a lot of new entrants.

Malaysia on the VC Map

Digitization coupled with the porosity of borders has meant that competition lands at your doorstep almost from the word go! Scale and speed of growth are important and the fuel for that is cash – and plenty of it! This is one of the reasons why MDEC is pleased to have attracted Vickers Venture Partners, to open their Kuala Lumpur office.

The presence of Vickers on our shores is yet another indication of investor interest in Malaysian-originated deals. Have we done enough to put Malaysia on the map? Only time will tell, but the good news is that investors are now getting off the plane at KLIA. At MDEC, we are busy making sure they continue to keep Malaysia firmly on their radar.

One major initiative we recently worked on this year was the “Sea Dragon Venture Platform” event (10-11 May2018), which was organised by PIKOM. MDEC was pleased to support this major initiative, which saw 30 global VCs and corporate investors visiting Kuala Lumpur. About 35 technology companies from Malaysia and the region were shortlisted to pitch at this event. SEAD are targeting companies that have the potential to be leading players in the Asian and North Asian markets that are looking for growth capital of US$5-25 million. This event was yet another opportunity to showcase to the region why having a startup to scale is best done from Malaysia.

It’s time to “Grow Fast and Go Global,” which is in line with MDEC’s globalization strategy; “Building Local Tech Champions!”

Gopi Ganesalingam is MDEC’s Vice President of Enterprise Development.

This article first appeared on 5 May at 2018 at Business Today, titled “Building Local Tech Champions” means Growing Fast and Going Global

POV from Silicon Valley: Location Matters – Particularly with Cross Border eCommerce

As consumers continue to expand the use of electronic commerce channels as their preferred method of shopping, the traditional retail industry “location matters” adage seems fated to obsolescence. Clearly, the location of a physical retail location is becoming less important than it was as recently as five years ago – the retail location is often in the cloud, accessible from wherever the consumer and his or her smartphone happens to be.

“Location matters” still rings true despite the evolution of commerce from physical to electronic, but its meaning has also evolved.  We all understand the concept of instant gratification and the feeling of frustration that can arise from waiting for a purchased item to be delivered. Jack Ma, founder and Executive Chairman of Alibaba, the world’s largest retailer has set the success requirement for their Electronic World Trade Platform to delivery within 72 hours of purchase to anywhere in the world, 24 hours within a country. Being able to consistently meet this requirement requires a highly sophisticated set of inventory management and logistics systems to be sure, but those things alone will not guarantee success. As it turns out, the shipping point’s location matters to a great extent in timely and efficient delivery – particularly when cross-border shipments are involved.

In an e-commerce world where this location matters, Malaysia enjoys many advantages, just as it has since the beginnings of international commerce centuries ago.  Strategically located on the Strait of Melaka, Malaysia is the natural gateway to southeast Asia, within easy reach of many of the world’s most dynamic economies. The ASEAN region is home to 630 million consumers and collectively the world’s sixth largest economy at over US$2.4 trillion annually. However, it’s not only the physical location that matters. What Malaysia and its partner Alibaba have put in place in that location are what make it one of the world’s most advanced e-commerce hubs.

Reliable and efficient shipping operates on a hub and spoke system, with few hubs connecting out to many spokes in a region.  The hubs are the most vital parts of the system, where synchronization of warehousing, packaging, transportation, and other logistical aspects of fulfilling an e-commerce transaction such as customs clearances or dealing with returned merchandise.  Malaysia’s recently launched Digital Free Trade Zone, which has within it the first international hub of Alibaba’s Electronic World Trade Platform, is among the e-commerce industry’s most advanced hubs worldwide.

Why did Jack Ma and Alibaba choose Malaysia for its first deployment of its Electronic World Trade Platform? Location was clearly one of the reasons. Our geopolitical stability and deeply ingrained trading culture were reasons.  The others relate to a powerful shared vision and the leadership commitment to execute an aggressive development plan. Making the Digital Free Trade Zone a reality involved the Prime Minister and other senior members of the government setting directives that cut across 26 different agencies and ministries. This top-down leadership, plus the sector-specific knowledge of MDEC and others driving the growth of the nation’s digital economy were what made it possible to transform vision into reality in under one year. Datuk Yasmin summed it up this way: “It was many things, but most importantly, he and the Alibaba team saw that we had the vision for it and the ambition to see it through.”

Jack Ma said, “the first-e-hub under the Electronic World Trade Platform outside of China will go a long way towards making global trade more inclusive and provide much-needed support to a hugely important constituent:  SME’s and the younger generation.” Clearly, the significance of the partnership with Alibaba, and the capabilities it has brought to market have industry, socio-economic, and other far-reaching implications. Datuk Yasmin expressed the following in conclusion:  “My dream is that we will rediscover and reposition the glory days of the Straits of Melaka during the silk and spice trade.  Melaka was right in the center of the universe then, and I feel it can be that in the e-commerce universe.”

Datuk Dan E Khoo is the President of MDEC Americas Inc; a Silicon Valley organization established to drive the global expansion of Malaysia’s digital economy.

Malaysian Leaders Must Build World-Class High Impact teams

When I joined Malaysia Economic Development Corporation (MDEC) in February 2015, I took on the role of Vice President of Enterprise Development. It was a new division created to identify and catalyse Malaysia-based companies into the global arena as eventual world icons. This was and still is one of MDEC’s four strategic pillars – to build world class tech champions.

It’s usual for MDEC to move people around internally to lead teams to drive various corporate objectives, so my MDEC story moved through different chapters. Currently, I am leading a laser-focused team using MDEC’s GAIN (Global Accelerator and Innovation Acceleration) initiative to elevate Malaysian companies onto the international stage, starting with the ASEAN region.

World-class ambitions demand a high-performance culture, which is a fast-emerging trend in many key organisations. Personally, I point to football teams (mysteriously called soccer by Americans) as examples of some “secrets” of what it takes to successfully develop and drive high performing teams.
Malaysia has already seen several inspiring success stories, moving in the right direction and gathering momentum. Just to run through a few:

  • Vitrox Berhad is a global player in automated vision inspection solutions. Founded by Chu Jenn Weng and Steven Siaw Kok Tong, both graduates from University Sains Malaya. Vitrox was first admitted to the ACE market in 2005 and moved to the Main Market in 2009. On 19th March 2018, their market capitalization stood at RM2,755 million.
  • Aemulus Holdings Berhad is another listed MSC status company. Founded by Ng Sang Beng and Yeoh Chee Keong, it listed on the ACE Market of Bursa Malaysia in 2015. Co-founders, Ng Sang Beng and Yeoh Chee Keong were colleagues at Altera Corporation in Penang. Their market capitalization stands at RM107 million.
  • Other MSC-status champions include Inmagine Group, now 16 years in operations, best known for their stock image business (123rf.com) and Piktochart, which produces visual stories from charts.
  • Green Packet Berhad is a Malaysian company that started out in Silicon Valley in 2000 and achieved listing in 2005. In true Silicon Valley style, the company evolved, selling its wireless broadband business to Telekom Malaysia to focus on the Internet of Things (IoT) and fintech.
  • iflix, a video on-demand service, was founded by Patrick Grove, who also built the hugely successful Catcha Group, a leading internet player in the region. In 2016, iflix secured a US$45 million investment from pay-tv giant Sky Plc.
  • MDT Innovations is the leading innovator in the region for IoT. Driven by Liew Choon Lian, CEO and Sim Hon Wai, COO, its revenue is 95% export driven. It was listed in Gartner’s Cool Vendor and featured as top 25 IoT companies by APAC CIO Outlook Magazine in 2018.

Passion, Diversity and Innovation

There are several other Malaysia-born companies that are now serving customers around the globe. All of them started with a core team of founders, who recruited their team and infused it with a mission, and – as they say – a dose of passion to achieve performance. As well as performance, they developed and continue to maintain high performing teams: It’s easier when you start from scratch, but if you don’t – you do need to continually add to your talent pool.

That means having to be in a location, which is attractive for talent, like Malaysia. MDEC has played a major role in making this possible, as one of the benefits of MSC (Multimedia Supercorridor) status is the ability to bring in talented staff from around the world.

In the corporate world, managers don’t have the luxury of building their teams from scratch. They join an organization, work their way up the ranks and if all goes well they get to run a department, division, etc. It’s fully staffed but nonetheless it is incumbent upon the leadership team to ensure diversity and inclusiveness. That’s how you get innovation – new ideas are needed from the outside: New blood to enable a fresh perspective, so to speak!

Incentives and a common goal are key to building a high-performance team

What does it take to build a high-performance team? A common goal is clearly important. Incentives also work, as you can see with football players and sales people, in general.

However, one should be wary of incentives driving the wrong behaviour. When too ‘significant’, incentives can sometimes cause problems. Most recently the big four Australian banks were hauled up by regulators and told to stop their product-based incentive payments, as customers were sold products they did not understand or need. The independent commissioner, Stephen Sedgwick said, “some current practices carried an unacceptable risk – of promoting behaviour, which is inconsistent with the interests of customers”.

In my earlier article, I talked about the need to have a strong story. If the story is clear and meaningful, and shows purpose, then you can actually recruit and motivate a team without relying on large monetary incentives! A high purpose generates powerful energies that will drive high performance: That is indeed the practice at MDEC, because working in MDEC is more than a job or a career, it’s about ‘serving the nation with your hand over your heart’.

Coming back to the issues faced by most managers, who after climbing up the corporate ladder have a team to lead: It is often assumed that they have the skills to manage a team, but in practice that might not be the case. A great salesman might not be a great sales team lead, where his job is to motivate, assist and plan for his salespeople to perform. This is where mentoring and coaching is required.

The other point to understand is that in a team, there will some who perform and others who don’t. If you have team members who are not contributors and in fact turn out to be disruptors, they need to be removed quickly and in an open and visible manner. Unfortunately, a lot of line managers prefer to keep these staff on the payroll and avoid uncomfortable conversations. When there is confusion about responsibilities, and no one is really held accountable for performance, managers will struggle to have an open and fair conversation about an individual’s performance. Without accountability, you cannot build a high-performing team.

“Well Done!”

Managers who want to build high-performance teams need to really understand this. If I could borrow again from football: All top Premier League teams are packed with talented, committed athletes, but the reality is that at this level, you can’t build a winning team without a superstar. Liverpool might have discovered one such star in, Mohamed Salah, who just turned 25 years of age and joined the club in June 2017 from A.S. Roma.

In his book, “Leading” Alex Ferguson (with Michael Moritz) said, “the two most powerful words in the English language are ‘Well Done!’ Much of leadership is about extracting that extra 5 percent of performance that individuals did not know they possessed.”

In building a high-performance team, you need a powerful story, committed team members, a couple of superstars and an evaluation system that is fair and open. What’s good for the goose is not always good for the gander, so rewards and expectations must be specific to each member. Add to this a courageous leader and you will have a winner!

Gopi Ganesalingam, Vice President, Enterprise Development, MDEC.

This article first appeared on 27 April 2018 at Leaderonomics, titled “Malaysian Leaders Must Build World-Class High Impact Teams

Making “Cloud First” a Reality for Malaysia

With Malaysia embarking on its “Cloud First” strategy to accelerate the Digital Economy, the public and private sectors together with the rakyat can expect more digital transformation initiatives that would make Malaysia a more productive, operationally efficient and conducive country to live in.

The “Cloud First” strategy was first introduced by Prime Minister Datuk Seri Najib Razak after chairing the 29th MSC Malaysia Implementation Council Meeting in October last year.

“Cloud adoption will enable the government to rapidly deliver innovative public sector services to the rakyat without incurring high levels of capital expenditure to invest in IT infrastructure such as data centres, servers and storage,” said Datuk Seri Najib.

Greater adoption of cloud services is also expected to benefit the government from state-of-the-art security infrastructure as well as collaborative platforms that would ease services deployment amongst government agencies and also with the rakyat.

“This enables the government to allocate resources for more impactful programmes for the rakyat. With this strategy in place, there is no doubt the government is taking the lead in embracing digital transformation,” he added.

The “Cloud First” strategy is defined as a method of faster delivery of information technology services like data sharing and online transactions in which resources are retrieved from the Internet through web-based tools and applications, as opposed to a direct connection to a server. In addition, there is usually less capital expenditure as opposed to more than a decade ago when there was a need to invest in traditional IT infrastructures such as servers and storage.

The Malaysian Government can also facilitate the adoption of Cloud by the private sector.

Earlier this month, the Malaysia Digital Economy Corporation (MDEC) together with Malaysian Investment Development Authority (MIDA) announced the Digital Transformation Acceleration Programme (DTAP) aimed at providing Malaysian companies with a structured approach to digital transformation.

Established for large corporations and mid-tier companies, DTAP is an outcome-driven programme aimed at encourage them to embrace emerging digital technologies for greater productivity and operational efficiencies, while reducing foreign labour dependency and to explore new sources of growth.

“Digital disruption is inevitable; it is the way of the world now. It is imperative for businesses to embrace the cloud to successfully integrate digital technologies to their business processes,” said MDEC chief executive officer Datuk Yasmin Mahmood at the event.

MIDA chief executive officer Dato’ Azman Mahmud concurred. “MIDA has been working with MDEC to structure the DTAP towards lifting Malaysian industry players in the priority sectors to assist them in their digital adoption journey,” he added.

Although the growth of the digital economy and the journey to the cloud bring about various benefits, there is also a need to relook at how services and operations are managed.

This stems from the reality that, with technology moving so fast and constantly evolving, the necessary public policies need to be implemented to address new opportunities and challenges. This situation is confounding governments throughout the world.

The United States was one of the world’s first countries to be proactive and, recently, its CLOUD (Clarifying Lawful overseas Use of Data) Act was signed into law.

The CLOUD Act is said to be a framework to address the “tricky balance” of the protection of fundamental individual privacy rights and cross-border data access by law enforcement agencies from various governments.

Similarly for Malaysia, for government and businesses to continuously digitally transform and for the country to emerge as a regional leader in cloud services, we would also need to look at enacting the relevant public policies through the issuance of progressive guidelines

What are the Critical Steps to Successful Digital Adoption?

This time last year, I pointed out that Malaysia and the rest of the world is rapidly making its way to the Fourth Industrial Revolution (now known as IR4.0).

Rapidly evolving technologies – such as artificial intelligence, robotics, the Internet of Things (IoT), autonomous vehicles, 3D printing, nanotechnology, and quantum computing – together with emerging new models and approaches are starting to help us unlock even more value and benefits from the digital revolution.

Leading industry players in Malaysia have started their digital adoption and transformation journey, but are yet to fully leverage digital technologies across the full breadth of their business, according to recent analysis by Accenture using its Digital Performance Index (DPI).

As an example, an Accenture analysis in Malaysia, published in ‘Faster Than Ever: Can Malaysia’s Top Companies Win in the Digital Age?’, examines 28 leading companies across more than eight industries. It found that although companies are aware of the importance of incorporating digital into business strategies, there seems to be a gap between planning and taking action. Up to 44 per cent of companies have digital strategies in place, but only 7 per cent have announced dedicated budgets to implement these strategies.

The research also revealed that most digital transformation initiatives are focused on customer-facing activities rather than internal operations and management structures. More than half (52 per cent) have launched new digital products and up to 44 per cent have digitalised current products. However, only 11 per cent use digital in their manufacturing processes or to manage the supply network.

With ASEAN’s digital economy projected to add US$1 trillion to the region’s gross domestic product during the next 10 years, Malaysian companies need to leverage digital innovation across all business activities, and they need to do this faster than ever.

In other words, it is about building upon a vibrant domestic ICT industry, transformative use of digital solutions by government, businesses and citizens, as well as the constant nurturing of robust enabling ecosystem. The vision of Digital Malaysia is aimed at enabling the country’s digital economy so that Malaysians and our country’s businesses can thrive within this new business environment.

Engine of Growth

Following the 29th Malaysia Implementation Council meeting (ICM) in October last year, Prime Minister Datuk Seri Najib Razak announced a new stream of initiatives to boost nationwide digital transformation.

“I really believe that digital economy can become the engine of growth for Malaysia,” the Prime Minister said after the meeting. “Although what we are experiencing today is amazing, I want to further challenge MDEC and all involved in driving the digital economy of the country and get it to supercharge our country’s economy. In fact, I want it to be one of the sectors that will power our growth.”

Vowing to take the government’s commitment to drive Malaysia’s Digital Economy to a higher level, Prime Minister’s wide-ranging announcements included a national artificial intelligence framework, digital accelerators, new company builder tech startup funds from Mountain Partners Europe and Bridge IP Japan, as well as new digital transformation acceleration programmes for mid-tier companies.

This stepping up of gear brings to mind the 2020 vision – which remains a major milestone of development for Malaysia – a year by which the nation is determined to achieve a digital, developed economy status.

Malaysian companies are stamping their mark globally; for example, Elsoft was recognised by Forbes Asia as ‘Best Under A Billion’ in 2015 and 2017. Among MNCs, we are already moving up the services value chain.

The Prime Minister noted that there has been a strategic shift in investments, where Malaysia used to be a base for shared services. Multinationals are now using Malaysia as a hub for catalytic digital technology and services. One such example is French company Dassault Systemes, a world leader in 3D design, who has chosen Malaysia to host their Global Development Centre for 3D Business Experience Platform.

The challenges Malaysia is addressing includes improving a structured approach, overcoming budget limitations, developing more digital workers as well as helping to clarify paths towards more efficient digital transformation.

To speed up the transformation, we are forming Digital Transformation Labs to provide consultancy and assist in prototyping new digital products and services. The labs will then match participant companies to digital companies. This programme intends to achieve three main outcomes – increased productivity, reduction in foreign labour dependency as well as a new business model or source of growth for the participant companies. This model has been tested on Top Glove and Gamuda with encouraging results.

By digitising the chemical testing line, Top Glove managed to completely remove the need to allocate labour for this task, as well as reduce unplanned downtime by 100 percent. Similarly, Gamuda’s mall management were able to reduce man-hours by 50 percent, while fully digitising their processes. The next step for Top Glove and Gamuda is to scale this approach to their other production lines and properties respectively.

Another major factor to grow the nation’s Digital Economy is building the right talent pool: our forecast reveals that Malaysia needs one million digital workers, such as coders, application developers and software engineers by 2025. We are pleased for the support for Digital Maker Movement, i.e. the initiative to identify and nurture young talents to be future digital innovators. It includes the move by Ministry of Education to incorporate computational thinking and computer science in schools, and for more collaboration with the private sector as well as support from academia to further nurture these bright young talents.

Catalysing AI

Malaysia introduced the ‘Cloud First’ Strategy to the national agenda, starting with the public sector. Cloud adoption can enable the government to rapidly deliver innovative public sector services to the Rakyat without incurring high levels of capital expenditure to invest in the IT infrastructure, such as data centres, servers and storage.

In a hyper connected world, it is becoming abundantly clear that artificial intelligence (AI) is the defining force of the fourth industrial revolution. AI is the natural progression from data analytics, and as such, Malaysia will develop a National AI Framework. This will be an expansion of the National BDA [big data analytics] Framework, and its development will be led by MDEC. AI could well be a ‘game changer’ in improving the lives of Malaysians.

In January this year, Malaysia introduced a high-impact initiative to catalyse the AI ecosystem and open up the path for collaborative innovation: The Malaysia City Brain. This is an open data-driven, artificial intelligence platform adapted from Hangzhou City Brain, which has been designed to meet local needs. It uses artificial intelligence as a platform to start to address urban challenges and offers intelligent solutions to the community in Kuala Lumpur. The platform uses Alibaba Cloud’s AI programme as well as big data analytics capabilities to produce real-time traffic predictions using its video and image recognition technologies.

The Malaysia City Brain operates as an open platform whereby it can plug in new and existing solutions from other platform by leveraging off pre-built intelligent tools, incorporating artificial intelligence and Machine Learning, and utilising existing data sets as well as additional data sets from external sources.

Global icons

On the startup side, the Malaysian tech scene is growing and vibrant. There are several Made-in-Malaysia regional champions that we see today: iflix, a three-year-old startup that managed to roll out services to 30 countries and five million customers, while having access to data analytics, artificial intelligence and machine learning. And it is intriguing that iflix does not own servers or data centres. Cloud and digital adoption allows them to be agile and scale fast to meet growing demands while keeping capital expenditure low. Presently, iflix has 179 million in the latest round of funding. We need to see more rapid growing start-ups like iflix in Malaysia.

It is increasingly important for local companies to become global icons. We do have wonderful potential here – with the likes of Silverlake, a renowned solutions provider for the global financial industry, Fusionex, a multi-award winning Analytics and Big Data company that is based in Malaysia.

In this light, the MDEC Global Acceleration Innovation Network (GAIN) initiative aims to identify companies that have the potential to be accelerated into major global icons, such as Sedania Innovator and iPay88. Through MDEC’s Silicon Valley office, we have successfully connected more than 20 of such companies to the SV ecosystem of mentors, accelerators and venture capitalists (VCs). Hence, there is a critical need to “fast track” local MSC companies to enter and compete in the global marketplace.

That said, it is also important that we help smaller local companies with technologies to scale up. Smaller-range companies can leverage the biggest by adopting eCommerce in their operations. Companies like Speedminer, a pioneering machine learning company, are amongst those that MDEC has successfully nurtured. Other numerous successful startups we have in Malaysia with the world at their feet include iMoney and ServisHero, together with companies such as KFit and iflix amongst many others.

Another initiative called the Malaysia Tech Entrepreneur Programme (M-TEP) is attracting interest from entrepreneurs from all across the world and shows that our initiatives have global appeal. It is encouraging to know we have received applications from entrepreneurs from more than 10 countries, including Germany, India, Australia, Singapore, the UK and the US.

On a wider industry-level, we hope to accelerate digital adoption by establishing the Digital Transformation Acceleration Programme (D-TAP) for large and mid-tier companies, who contribute 63.4 percent of the GDP, according to the Prime Minister at ICM.

Major eCommerce Boost

As I mentioned earlier, with a view to becoming a high-income knowledge-based society, MDEC has spearheaded high-impact government initiatives as well. One such move is the establishment of the country’s Digital Free Trade Zone (DFTZ). DFTZ is an initiative by the Malaysian Government, implemented through MDEC that aims to capitalise on the confluence and exponential growth of cross-border eCommerce activities that are happening within digital economy. First announced in March 2017, DFTZ facilitated seamless cross-border trading and eCommerce, which enabled Malaysian SMEs to export their goods internationally.

On Friday, 3 November last year, Malaysia’s Prime Minister and Jack Ma opened the first ever eWTP (electronic world trade platform) hub outside of China at a Kuala Lumpur ceremony, which also flagged off 1900 export-ready small and medium enterprises (SMEs). Malaysia marked a new milestone with the celebration of DFTZ’s one-year anniversary recently with 3,000 local SMEs now onboard onto the DFTZ programme.

On the public-sector perspective, the Malaysian Government has introduced a new category of certified locations called the Malaysia Digital Hubs for the start-up community in the digital economy. This is achieved through multiple public-private collaborations to offer unique value propositions such as ubiquitous hyper-speed broadband, hot-desking, mentoring and coaching services.

The BDA “Dance floor”

Another thing we must do from the fundamentals – human capital, investments – concerns the ecosystem. One of the most critical ecosystems that we are putting our focus on is – as I put it last year – the “dance floor”. The BDA “dance floor” is one of the most important and it’s really anchored around talent development; data scientists, data modellers, and analysts. At the end of the day, though, whatever transformation needs to happen needs to be driven by the private sector. As a government agency, we can only create the “dancing floor” – the actual dancing still remains within the grasp of the private sector.

In an ever-changing innovative world, Malaysia needs to remain steadfast on the Digital Malaysia road and to ensure we become the lead in key areas of enabling fundamentals. We are extremely inspired that we are moving in that direction with the Malaysian Government focused on accelerating growth and enhancing the wellbeing of the rakyat.

Looking ahead, Malaysia’s Digital Economy is envisioning 20 percent of GDP by 2020. With a sustained push by all stakeholders, the Digital Economy contribution has good potential to reach the targeted value of RM324.9 billion by 2020, as set out in the 11th Malaysia Plan.

An important part of MDEC’s championing of the digital economy embraces digital inclusivity across all communities. We are passionate about inspiring everyone to use of digital within our Digital Malaysia journey so that the digital economy’s success can be shared by all.

The eRezeki and eUsahawan initiatives were launched in 2016 year to target key communities such as youth, SMEs, digital entrepreneurs and the B40. These initiatives include eRezeki, which is a programme for Malaysians to earn supplementary income online, while eUsahawan is a digital entrepreneurship programme helping the general public with basic business fundamentals to enhance their online sales.

So to amplify the nationwide impact of the eRezeki and eUsahawan initiatives, we developed our #YouCanDuit multichannel campaign using carnivals, roadshows, with other musical and entertainment components. Close to 200,000 people attended the on-ground events, while our multiple channel campaign included a successful partnership with not just Astro, but with other stations as well such as TV3 and RTM, and succeeded in creating a phenomenon in building the awareness of #YouCanDuit programmes. We have consistently reached out to a 10 million viewership in the past two years.

2018 will continue to see the growth of digital economy, as indicated in the budget announced in 2017. The vision is to turn Malaysia as a regional hub for digital economy. The Government, together with MDEC, are gearing up towards turning that vision into reality as we steadfastly activate our plan.

I am delighted to reaffirm the message that these times are among the best of times for us Malaysians, to ensure we are part of the Digital Malaysia journey and so share in the success of the dawning Digital Economy!

Dato’ Ng Wan Peng is Chief Operating Officer of Malaysia Digital Economy Corporation (MDEC).

POV from Silicon Valley: Malaysian SME Cross-Border Trade – The Next Chapter

For centuries, Malaysia has been a center of international commerce, owing to its strategic location in the Strait of Melaka, and the resulting trading orientation that developed among its people. And while it remains an important player in the traditional forms of international commerce conducted principally among large corporations, the power of e-commerce has been harnessed in Malaysia specifically for the benefit of its expanding the cross-border trade of its small and medium-sized enterprises (SME’s).

Capitalizing on its culture and heritage rich in trading and commerce, Malaysia’s drive to grow its digital economy has always focused on inclusiveness. This approach aligned well with the vision of Jack Ma, the founder and executive chairman of Alibaba, the world’s largest and most profitable retailer, for an Electronic World Trade Platform (EWTP). In Ma’s view, the globalization of trade, though geographically widespread is flawed in its implementation because it has benefitted only big, multinational companies.  This flaw is largely due to cost of cross-border trade that is driven by its complexity, rendering it inaccessible to SME’s. Putting an e-commerce platform in place that removes the complexity and therefore the cost that excludes most SME’s from cross-border trade will enable SME’s to profitably reach markets beyond their own borders.

This aligned view of inclusion forged a natural partnership between Alibaba and Malaysia to develop and launch Malaysia’s Digital Free Trade Zone (DFTZ).  Effectively eliminating the complexity associated with customs, foreign exchange, warehousing, shipping and reaching a marketplace of potential customers, the Alibaba Electronic World Trade Platform (eWTP) hub within the DFTZ gives SME’s from Malaysia, and ultimately throughout the ASEAN region and beyond unprecedented capabilities to reach large consumer markets. In his remarks on the launch of the DFTZ, Jack Ma said: “Today we are witnessing a historic moment in Asia, where one country has begun to use technology to enable its SME’s and young people to become more competitive on the world stage.”

About 2000 Malaysian SME’s were part of the initial launch of the DFTZ.  There is a Malaysian Pavilion on the Alibaba platform and various powerful tools that connect potential buyers outside of Malaysia with Malaysian products for the first time. So far the results have been interesting.  The top Malaysian product sold into China through the Malaysian Pavilion is white coffee. Durian is number two. Bird nests for bird nest soup is also a popular SME export – leveraging our not quite as well-known location advantage of being on the flight path of swallows traversing southeast Asia. The mix of products and volume sold through the DFTZ to the world’s consumers will continue to evolve and grow in interesting ways, but whatever the products, it’s the growth of SME’s ability to benefit from streamlined cross-border trade that really matters.

Reflecting on the launch of the DFTZ and the partnership with Alibaba, Datuk Yasmin said: “I’m really happy with how this came together. Of course it was a lot of work on our part, but it didn’t seem so due to the sheer excitement of doing something so new.  To be working with the global leaders at Alibaba and such an innovative leader as Jack Ma, has been truly a pleasure for us, and also has brought us to a whole different mindset now. The platform that we built was developed by locals. I must say that it was at a high standard.  Through this initiative we raised the standard of our local suppliers to that of a global caliber, an Alibaba caliber, and that’s something that will have lasting effects.”

Dato’ Dan E Khoo is the President of MDEC Americas Inc; a Silicon Valley organization established to drive the global expansion of Malaysia’s digital economy.

POV from Silicon Valley: Malayan Trading History’s Influence on the Rise of the Malaysian Digital Economy

Today, as it has been for centuries past, the Straits of Melaka is one of the world’s most important trade routes. Malaysia’s prime location on the commercial artery that connects the Pacific and Indian Oceans and the major economic centers of Asia has been a major factor not only in the growth of the Malaysian economy but also in the development of trading and commerce as a key dimension of Malaysian rich history and culture.

The United Nations Conference on Trade and Development (UNCTAD) estimates that roughly 80 percent of global trade by volume is enabled by shipping. A relatively narrow channel, the Straits of Melaka is relied upon by a third of total global shipping. In dollar terms, an estimated US$5.3 trillion worth of goods transits through the South China Sea annually.

As early as the first few centuries A.D., trade on the Straits of Melaka helped to create economic and cultural links among China, India, and the Middle East.  Europeans also plied the Straits during this time.  By the middle ages, it had become the hub for trade and commerce that it is today, with ships using points along the coast of the Malayan Peninsula to dock and conduct commerce.  It is said that the Chinese, Indians, Omanis, Yemenis, Persians, and Africans exchanged goods and established trade agreements with traders from Sumatra, Java, Bali, and Canton. Silk, brocades, porcelain, and perfumes from the Middle Kingdom were traded with hardwoods, carvings, precious stones, cotton, sugar, livestock and even weapons from India. From the interior of Malaya came tin, camphor, ebony, and gold. Surrounding traders brought spices, perfume, rice, gold, black pepper and sandalwood.

The regional prosperity that came from being the hub of activity for traders of all ilk (and silk) led to a self-reinforcing loop that perpetuated an affinity for the virtues of commerce. The strategic location of the Straits at the heart of the Eastern trade routes, coupled with favourable seasonal winds, were critical natural factors that encapsulated the trade-hub potential of Penang and Melaka. But it still took the inspired decision of the then administrators to build the infrastructure, establish the network and train the local population to turn Penang and Melaka into major entrepots of their time.

While the world and its modes of commerce and trade have evolved greatly over the past several hundred years, the Straits of Melaka has sustained its position as a preeminent trade route.  Today, Malaysia is the gateway to the 630 million consumers of the ASEAN region – collectively the world’s sixth largest economy at over US$2.4 trillion annually.

Malaysians’ commercial sensibility is a key underlying factor in the growth of Malaysia’s digital economy. Entrepreneurship and understanding, producing and trading the goods markets want are deeply ingrained among Malaysians. As Datuk Yasmin observed, “we are traders – locally, nationally, and internationally, giving the various programs undertaken by MDEC and others access to a deep talent pool that is readily adapting to the possibilities and opportunities of digital.”

This dimension of our culture also affords Malaysia the ability to have a highly inclusive agenda for building its digital economy, one that touches a large proportion of our people, extending their outlook and what they already know into exciting new digital endeavors. Datuk Yasmin outlined the scale at which this was being undertaken: “on a national level, we are doing things to expose our entrepreneurially-inclined population to digital entrepreneurship.  Digital marketing and digital e-commerce instruction is now a formal curriculum in our vocational schools.  We will have over 400,000 vocational school graduates each year who have had in-depth exposure to digital marketing and e-commerce.” This program is now being expanded to the university level.

After only two years, the transformative impact has been phenomenal.  We already see cases of successful young e-commerce entrepreneurs going from renting a small house to being to buy a house for their family, and then having sufficient demand for their product to warrant moving production from their backyard into a brand-new factory. International expansion of the markets where these small and medium-sized enterprises (SME’s) do business is the next step, and one, given our trading culture and heritage, that is coming naturally, and now more easily, leveraging the partnership between Alibaba and the Malaysian government and the capabilities of Malaysia’s recently launched Digital Free Trade Zone.

Datuk Dan E Khoo is the President of MDEC Americas Inc; a Silicon Valley organization established to drive the global expansion of Malaysia’s digital economy.

© 2017 Malaysia Digital Economy Corporation Sdn Bhd (389346-D). All rights reserved.