For a young country, Malaysia has quite an extensive history of building its own innovation ecosystem. It opened its Multimedia Super Corridor back in 1997. The time has now arrived – and it also has for neighboring Singapore – to scale to greater heights. The aim: to have significant and successful startups so that people can associate a global brand with this country or any of its cities. That would be a huge endorsement for a successful innovation ecosystem.

To discuss this topic, the Global Entrepreneurship Summit invited two globetrotters and a local Malaysian insider. Bowei Gai‎, founder of the World Startup Report, visited 26 countries in 9-months of travels and produced very popular Slideshares on each of them. Bjoern Hermann‎, founder of Startup Compass, is also known for his Startup Genome report that ranked innovation ecosystems across the world. Nazrin Hassan, founder of the Cradle Fund in Malaysia, an early stage investor in startups, has long worked in government agencies on the topic of innovation.

Martin pasquier innovation is everywhere Malaysia kuala lumpur Global Entrepeneurship Summit 2013 Agence Tesla Knowtex nicola loubet Innovation factory anne lalou startup genome ranking of innovation ecosystems

The top 20 innovation ecosystems in the world (Startup Genome)

4 Essential Elements of a successful Innovation Ecosystem

According to the 3 panelists, the “recipe” for an ecosystem willing to take the next big step would involve different items, tools, and changes.

First, self-confidence. Silicon Valley remains the only known ecosystem in the world (ask amongst yourselves which city comes in 2nd best and you will struggle to agree on one). Asia, says Nazrin, needs to speak for itself, to showcase its history, successes, failures and identity. Benchmarking with the Valley makes no sense. Instead, Malaysia should compare its progress with countries operating in similar contexts, such as Singapore or Hong Kong. And it’s not so much about competition between ecosystems as it is about the important connections. In this case, Malaysia could work constructively with Singapore on a platform to reach to the global markets.

Opening Malaysia to the world seems to be another key component. In the Silicon Valley, half the founders and 70% of PhD holders are foreign-born immigrants. Israel is also ranked highly in entrepreneurs’ minds for its links to startups in New York, Silicon Valley and Europe. The immigration dilemma, characterized by the visa policy tensions in every country in the world, seems to be the most sensitive issue. The Singapore startup ecosystem, often referred to as the perfect textbook case study, is now facing a rising anger from locals who see top jobs and government money go to attracting foreign entrepreneurs. That said, you can’t build an ecosystem with only locals as innovation stems from diversity, disruption, different influences, networks and connections.

Martin pasquier innovation is everywhere Malaysia kuala lumpur Global Entrepeneurship Summit 2013 Agence Tesla Knowtex nicola loubet Innovation factory anne lalou Bjoern Hermann Bowei Gai startup genome report world startup report

Bowei & Bjoern, respectively documenting and comparating startup ecosystems in the world

The role of the government should also be better defined, Having worked for 13 years at different levels of government, Nazrin wonders if the government should be a leader or a feeder. The panelists agree that the government and its agencies should create the conditions for a successful ecosystem (see what Malaysia PM Najib Razak said in the opening keynote of the GES), and then leave it to entrepreneurs to take over. The legal, tax and education frameworks can be made more conducive for entrepreneurship. For instance, universities should be more open to private companies to expose students to successful entrepreneurs. Another step would be to improve wages for developers. In Malaysia, developers earn only 5.600RM/month ($1750), much lower than jobs in media or construction.

Making and keeping people hungry is another necessity. The Israel startup ecosystem is often mentioned: a nation under siege, in a sea of what they see as enemies, and the leading role of the army as both a training for the youth and a key funder for research and development. Malaysia may seem “too lazy”, says the panel, and needs to find its own “enemy” to raise the competitive mindset of its entrepreneurs. And if there’s no one hungry in the country, import hungry people! This is what Chile does very well with its Startup Chile program. Any foreigner with an idea can apply for a $50 000 grant and a visa to launch its project in Chile. “It’s a cheap way to drive an ecosystem”, adds Bjoern.

Malaysia en-route to becoming a thriving startup hub

Martin pasquier innovation is everywhere Malaysia kuala lumpur Global Entrepeneurship Summit 2013 Agence Tesla Knowtex nicola loubet Innovation factory anne lalou Top malaysian ip startup scene south east asia

Malaysia success stories

But relatively, Malaysia is doing well and has a supportive government. As our panelists mentioned, try to get through the paper work in India or corruption issues in Indonesia to understand how much better the situation is in Malaysia. We’ll be covering other innovation ecosystems this year to deepen our understanding of their mechanisms, best practices, and how to connect them to each other. Stay tuned!

Do discover more startups from BRICS countries

Check out our report on Malaysia innovation ecosystem on Slideshare too