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Economy

Malaysia tells the world's entrepreneurs: We want you

Prime Minister Najib looks to startup culture to push the country to the next level

Malaysian Prime Minister Najib Razak at the United Malays National Organization general assembly. Najib is leading the drive to foster entrepreneurship in the country.   © Reuters

KUALA LUMPUR Malaysian Prime Minister Najib Razak wants to take his country to the next level of economic development, and he is inviting entrepreneurs from around the world to show the way.

On Dec. 14, Najib addressed the audience of an international conference in Kuala Lumpur where some 15,000 professionals from 89 countries had gathered. The event was organized by the state-run Malaysian Global Innovation & Creativity Center, or MaGIC. As the name implies, the goal of the group is to nurture entrepreneurship.

"We must be prepared for the advent of the fourth Industrial Revolution, so cannot afford to stand on the sidelines," Najib, a founding member, said. "We must get into the game."

It is a theme that has been reinforced since MaGIC's inaugural ceremony in April 2014, where Najib and then-U.S. President Barack Obama underscored the importance of young entrepreneurs in the economy.

At the most recent conference, the prime minister also announced plans to expand support for startups, including the so-called regulatory sandbox, so as to give promising businesses greater freedom. In the first three months of 2018, support for startups will expand to include activities in smart cities, agrotech, digital health, and clean energy and mobility. This temporary deregulation will be led by MaGIC, Najib said.

The conference was also attended by other high-ranking government officials, including Deputy Prime Minister Ahmad Zahid Hamidi and Defense Minister Hishammuddin Hussein.

PLAYING CATCH UP Malaysia is eager to invest in entrepreneurs. The economy has been growing at around 6% annually and the country's per capita gross domestic product has reached almost $10,000. But there are concerns that the country will be left behind in the digital era unless it rethinks its present growth model.

A view of Kuala Lumpur City Centre (KLCC) in Malaysia.   © Reuters

Najib, who wants Malaysia to join the group of advanced economies, hopes MaGIC will do the trick.

The organization was built for success: It is headed by a young entrepreneur to cut through bureaucratic red tape and smoothly implement policy. "MaGIC is different from other government agencies in [that it is] run and driven by an entrepreneur," said Dash Dhakshinamoorthy, president of the Global Entrepreneurship Movement. "The entrepreneur dictates what is to be done. This is actually quite a paradigm shift."

MaGIC is led by Najib and administered by the Ministry of Finance, rather than the Ministry of Higher Education, responsible for nurturing future talent, or the Ministry of International Trade and Industry, which oversees overall industry affairs.

It is not by chance that MaGIC is under the Finance Ministry, explains MaGIC CEO Ashran Ghazi. "The government wants to ensure that new ways of developing entrepreneurship [are] injected into the system," he said. "Being under [this ministry] avoids getting bogged down ... which would be the case if MaGIC were parked under other ministries."

Thus far, MaGIC has helped over 600 startups by providing co-working spaces and bringing together entrepreneurs and investors, among other efforts. MaGIC hopes to nurture startups that can compete not only in Malaysia, a country of only around 30 million people, but across the Association of Southeast Asian Nations, with its population of over 600 million.

Other major economies in the region, such as Singapore, are also promoting entrepreneurship. And across the globe, startups in big economies like the U.S. and China are leading in new technologies like artificial intelligence and big data. "Malaysian entrepreneurs need a quantum leap to be at par with other countries," said Mohd Irwan Serigar Abdullah, MaGIC's chairman and secretary general of treasury at the Ministry of Finance.

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