Hyperfocus is key to KL20’s success

 

Becoming a tech hub is no easy feat. Cities such as San Francisco, Tel Aviv and Singapore have commanding leads. If Kuala Lumpur is to stand toe to toe with them, it needs to do two things – attract existing tech giants and create homegrown ones of its own.

My previous article focused on how we can take a leaf out of Ireland’s book when it comes to attracting tech giants. But the second essential piece is creating Malaysian tech success stories.

There’s only one way we can do this: by focusing on a select few industries – something that the architects of KL20 have already zeroed in on.

Prime Minister Anwar Ibrahim summed this up well: “We are positioning Malaysia as an axis for leaders in semiconductors, clean energy, agritech, and Islamic fintech. Doubling down on our edge will tap into the higher value effort necessary to create new growth verticals and transform our fortunes.”

This is a winning approach. For a country like Malaysia with a nascent tech ecosystem, grabbing at too many straws is a recipe for mediocrity. Instead, the government should focus on developing and nurturing a select few industries that we already have a formidable lead in – with semiconductors being the primary one.

This is as semiconductors are an essential ingredient in microchips. And as the author Chris Miller says: “Microchips are the new oil”. They’re in every “intelligent” item you see around you: your smartphone, smart tv, smartwatch, laptop and your new car.

They’re so important that Taiwan – the birthplace of TSMC, the largest semiconductor manufacturer in the world – has become an important geopolitical player. Its expertise in the manufacturing of semiconductors is so coveted, it’s gotten caught in the crosshairs of the US-China tug of war.

This has exposed a critical weakness in the semiconductor manufacturing industry – its over reliance on Taiwan. Many now realise the merits of decentralising production so the world isn’t held hostage in case something happens to Taiwan.

This is where Malaysia can step in. As a credibly neutral country with relatively sophisticated existing semiconductor manufacturing capability – thanks in large part to Intel’s multi-decade presence in Penang – semiconductor giants such as TSMC and ASML can set up shop in Malaysia.

This is why Taiwan-based Phison Electronics – helmed by Malaysian-born Pua Khein Seng’s announcement during KL20 that they will be starting a new venture in Malaysia called Malaysia AI Storage (MaiStorage) – was a step in the right direction. As part of this venture, Phison will be bringing home 200 experienced engineers and technology transfer worth RM1 billion.

Another aspect of KL20 that is encouraging is their Single Window approach to attracting and nurturing talent and investments. Instead of just providing piecemeal services, the architects of KL20 have taken a holistic approach to inculcating our tech ecosystem.

For startups, this includes helping them with business setup, domestic and international business development, and visa applications. For venture capitalists (VCs), this includes providing access to funding opportunities from institutional investors, helping secure office space in startup hubs, visa fee exemptions, and expedited licence approval for fund setup.

We can already see optimism return to Malaysia’s tech ecosystem – with the recent visit of Satya Nadella, the CEO of Microsoft and Jensen Huang, the CEO of Nvidia. At the back of these visits, Microsoft has committed to investing a whopping RM10.5 billion into developing Malaysia’s AI ecosystem and the recently inked Nvidia-YTL partnership will see a total investment of RM20 billion.

This is exactly the type of flywheel effect the architects of KL20 need to capitalise on. Capital begets capital; talent begets talent. Using this as a tailwind, the brains behind KL20 can entice even more foreign startup successes and VCs to set up forever homes in Malaysia.

Executing on so many fronts is no easy feat but if these measures are undertaken with grit and ferocity, we have a fighting chance of fully realising Malaysia’s immense potential. After all, we owe it to ourselves and our nation to make it a reality. - FMT

The writer can be contacted at kathirgugan@protonmail.com.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.