Asia Business: Malaysia is well-known for its emerging startup ecosystem in the world. It could soon also be known as a top-tier startup ecosystem.
A good place to start
Malaysia is the birthplace of a number of big-name startups. For example, car marketplace Carsome and video-streaming service, Iflix.
Regional ride-sharing giant Grab also started out in the country as MyTeksi in 2012 before moving to neighbour Singapore in 2014.
Malaysia is known as one of the pioneering trailblazers for Southeast Asia’s digital economy.
This is because they establish a special economic zone for high-tech businesses, developing one in central-southern Selangor in 1997.
Malaysia, although is a good place to launch a business, still has a long way to go.
According to data from the Startup Genome, while Malaysia sees a good amount of local startups emerging. Besides, it also includes a good amount of early-stage funding coming in.
It’s seeing a large gap in the number of scaleups valued at over US$100 million compared to similar ecosystems around the world.
In fact, startups start going outside of their country really quickly. They actually grow twice as fast as others.
However, the culture of the investors, accelerators, and founders is to start local. They are having a high interest in their own country.
If they want to create Southeast Asia-leading innovation, they should start outside of Malaysia. For example, in Indonesia immediately
Power of private sector
In fact, Malaysia should grab the chance of start-up in Southeast Asia.
Singapore doesn’t do it very well because it’s a city that’s different from the rest of Southeast Asia.
Meanwhile, Indonesia’s focusing locally because it has a big enough market. So Malaysia has the potential to take over the region.
However, startups shouldn’t rely on government support to do this. The ability to achieve that goal depends on the private sector.
The role of the government is to build a private ecosystem that is self-sustainable.
Besides, government support in the form of grants will benefit in the short term. It is also detrimental to the growth of a startup ecosystem.
They come with business expertise. They help introduce them to investment or business opportunities.
Besides, angels are able to grow from becoming mentors to startups. They are able to continue imparting their knowledge along with their capital.
Private enterprise makes every ecosystem that thrives on creating scaleups completely.
The government needs to involve at the beginning, and creating private-sector success factors, such as funding accelerators. Besides, they should not touch the startups but support the support organizations.
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