The Malaysian Government gave its startup support programme a RM35 million (US$8.2 million) boost in the 2016 Budget announced on Friday.
The programmes are run by the Ministry of Finance’s Malaysian Global Innovation and Creativity Centre, which is looking to be a “leading regional entrepreneurship and innovation hub”, said Finance Minister Najib Razak.
Malaysia also announced direct incentives for businesses to innovate: SMEs that spend up to RM50,000 (US$11,755) on research and development projects will be eligible to claim double-tax deduction for assessments from 2016 to 2018.
The government is targeting 3.7% growth in annual labour productivity. “To raise productivity, we need to accelerate innovation and creativity,” Najib said. The government will drive commercialisation of research and development by local institutions, he said, declaring 2016 as Malaysia Commercialisation Year.
The government has given RM100 million (US$23.5 million) to the National Innovation Agency. It has also set aside RM50 million (US$11.8 million) for “demand-driven innovation” projects under the Ministry of Education’s Public-Private Research Network that helps companies innovate and increase productivity.
Another RM200 million (US$47 million) has gone to a technology and innovation accelerator fund under Malaysia Debt Ventures, which provides loans for technology projects.
The government also announced RM1.2 billion (US$282 million) for telecommunications projects. This includes rural broadband projects which will increase internet speeds by four-folds from 5 Mbps to 20 Mbps; National Fibre Backbone Infrastructure; High-speed Broadband; and an undersea cable system.
The government is targeting internet to be more affordable and to reach 95% of populated areas over the next five years, under the 11th national development plan announced earlier this year.