‘A clear break from the past’: Malaysia announces key initiatives targeting the global startup ecosystem – KL20

The Malaysian government is pivoting to attract more global startups to set up operations in the country.

Previously, much of its growth strategy focused on building the capacities of its local startup and SME ecosystem, according to the government’s press statement.

At the inaugural KL20 Summit 2024, a number of tangible policy reforms were announced to address obstacles faced by startups and incentivise “world-leading” startups and venture capitalists (VCs) to make Malaysia their home.

Speaking at the KL20 Summit, Malaysia’s Prime Minister Anwar Ibrahim acknowledged “missed opportunities in technology investments” within the country, and highlighted a need for an updated strategy for Malaysia to gain a competitive advantage in attracting high-value investments.

In an interview with GovInsider, Minister of Economy Rafizi Ramli alluded to the same sentiment around lost opportunities and the need for restructuring.

“We had that inherent advantage that perhaps we did not utilise the fullest before,” he shared. He pointed to the country’s demographics and growing economy as factors that position Malaysia as an ideal testbed for startups to pilot, go to market, profit, and then scale further.

“There were some structural problems, and administrative bureaucracy that needed dismantling. And we needed to bring together all the components for the ecosystem to drive the value for startups and tech investments. And that's what culminates in KL20,” he explained.

The key industries in which Malaysia is identified to have a competitive advantage are in semiconductors, manufacturing and automation, agritech, cleantech and Islamic finance.

“KL20 does not simply represent a single-event summit, but marks a clear break from the past, a comprehensive effort to catalyse the technology ecosystem,” Prime Minister Ibrahim said.

GovInsider breaks down the key initiatives by multiple government agencies to transform Kuala Lumpur into one of the top 20 global startup hubs by 2030.

A multi-government effort needed to breaking state bureaucracy

A single window for the entire startup ecosystem was one of the key initiatives announced as part of the KL20 Action Paper to provide a “seamless business environment,” in the words of Minister of Science, Technology and Innovation Chang Lih Kang at the summit.

Launched in 2022, MyStart was a go-to platform for information only made accessible to startup founders.

Now, it is an AI-powered, one-stop platform extended to the entire ecosystem, which includes founders, investors, government agencies and tech talents, to access resources, mentorship, funding, and regulatory support.

14 other government agencies involved in the ecosystem have also been onboarded on this platform to facilitate the transactions and provide the support required.

As per the official press release, users can gain access to a comprehensive database of all startups and venture capitalists in Malaysia that contains key information on funding, business details, and active fundraising status that is updated periodically.

The platform is also updated with AI and new features to streamline the enquiry and search processes.

“The minor inconveniences and hiccups in the [startup] journey are often what derails the experience, and we are addressing them today,” said Minister Ramli.

The platform is managed by Cradle Fund, under Malaysia’s Ministry of Finance, which spearheads the strategy for the country’s startup ecosystem.

Two-fold approach to bridging the digital talent gap

The government has taken a two-fold approach to bridge the digital talent gap in the country: through reskilling and upskilling, as well as improving the global talent mobility.

For the former, Skills@Scale and Executive Digital Leadership were announced as part of the KL20 Action Paper.

Skills@Scale is a tech skills marketplace, supplemented with course subsidies, that matches experienced trainers with trainees from different backgrounds who want to upskill.

Executive Digital Leadership is a three-month programme delivered by leading tech companies and schools to equip senior management with critical digital capabilities, such as AI, IoT and blockchain.

To improve talent mobility, Minister Ramli announced a number of visa programmes at the summit that make it more attractive and easier for global VCs and talent to work in Malaysia.

These include the VC Golden Pass that targets the top 100 global or regional VCs, Innovation Pass that targets highly skilled global talent, and the Unicorn Golden Pass that targets global unicorns.

Some of these benefits include subsidised office spaces, exempted fees for employment passes, spousal programmes and more.

Power in concentration and partnerships

Another key initiative announced is the KL Innovation Belt.

“To magnify the impact of these programs, we will congregate the ecosystem players in geographical clusters, with a critical mass of startups, talents, investors, corporates, and academia.

“We will achieve this via an Innovation Belt, where startups and investors benefit from proximity and chance meetings, and a series of incentives will encourage this movement,” said Minister Ramli.

Spearheaded by the Malaysian Research Accelerator for Technology & Innovation (MRANTI), it is tasked to establish the hubs, link up the ecosystem players, as well as to support their operations and opportunities for growth.

MRANTI’s “comprehensive support” includes relocation services that will ease the transition for founders and their families to Malaysia, said Minister Chang.

To ease the capital, talent and market access for startups, the government also announced the Startup City Connect initiative – also known as “innovation twin cities” as touted by Prime Minister Ibrahim.

He highlighted the need for Malaysia to collaborate with other major regions and economies to allow startups to operate seamlessly across markets.

These cross-border partnerships would entail accelerated business set up, regulatory harmonisation to enable frictionless trade across both countries, and increased connectivity and talent mobility.

Speaking to GovInsider, Chairwoman of Philippines’ largest private sector-led movement, Digital Pilipinas, Amor Maclang,  shared that there is an opportunity for emerging digital economies to partner around “global sandboxes” to exchange data and work closely together on similar challenges faced in building such ecosystems.

The summit saw an agreement signed between the mayor of Kuala Lumpur and deputy mayor of Hangzhou.