Globalisation Strategy by MDEC

04 Oct 2016

Agency all-out to help tech firms GAIN revenue

CYBERJAYA: Going global to build presence is never an easy feat for any company – especially with the growing economic uncertainties currently.

For tech companies, the challenge is compounded by an industry that is moving at break-neck pace – giving rise to stiff competition that it can almost be considered a “dog eat dog” world out there.

Helping the companies to overcome these challenges, is the Malaysia Digital Economy Corp (MDEC).

MDEC enterprise development consulting vice-president Gopi Ganesalingam points out that with globalisation being integral in Multimedia Super Corridor (MSC) Malaysia’s agenda, MDEC aims to empower and enable local tech companies to expand their business on the international front.

“MDEC was developed 20 years ago to cultivate the information technology (IT) industry and we need to know what’s the next step in taking these companies global,” he said.

“This is because the Malaysian market is too small,” said Gopi.

As part of MDEC’s globalisation strategy, it started a new initiative called Global Acceleration and Innovation Network (GAIN) last year to help grow high-potential Malaysian technology companies become regional and global players, aiming to boost annual revenue exceeding RM100mil.

According to a report in January, MDEC chief executive officer Datuk Yasmin Mahmood was quoted as saying that about 88% of IT companies in Malaysia, or 1,413 firms, earned an average annual revenue of RM1.4mil, while 10% or 170 companies, earned RM26mil a year.

She said only 24 companies or 2% of the companies manage to surpass RM100mil in earnings and average revenue of RM267mil.

According to MDEC’s website, GAIN is designed to catalyse Malaysian technology companies that have the potential to become global tech icons.

“With this, MDEC hopes to see an increase in the export of Malaysia’s tech solutions and services, while fuelling the vision of a developed digital economy.

“GAIN also helps Malaysian technology companies connect to viable foreign companies that are interested to work with them, effectively expediting the process of breaking into new markets.”

According to Gopi, the GAIN programme presents opportunities for local technology companies that are reporting outstanding revenue and growth, to take a step further and expand their business to other regions.

“We worked with over 100 company CEOs to find out the difficulties that they are facing... What do they need? What are their limitations?”

For a lot of these companies, visibility is often an issue, Gopi added.

“It’s a continuous process for MDEC to help these companies achieve it - and we can provide them with that platform,” he said.

Gopi said under its GAIN programme, MDEC had identified four pillars where the tech companies would need the assistance, namely market access, leadership and capability development, tech disruption and scale-up capital.

According to a statement by MDEC, market access initiatives are not just trade missions to introduce companies to markets outside Malaysia.

“The strategy is to use it as a platform to immerse companies with the market’s eco-system. Companies will be connected to the channel network, integrators and buyers community.”

Country managers will be hired to assist and accelerate market penetration and soft landing zones will also be set in key markets, it said.

“The strategy is to be further stretched to look at how Malaysian companies can tap onto the funding eco-system in the market and partner up with technology and research and development (R&D) organisations to capture the Asean market.

“Key target markets include Indonesia and subsequently the rest of Asean, China and Japan,” according to MDEC.

Under the leadership and capability development pillar, CEOs of high-growth companies must show that they are assertive and forward-thinking.

“MDEC will deliver a platform to help these CEOs to be more agile and hungry for transformation.

“This is done through intensive interactive learning where these CEOs will go through rigorous, peer networking, mentoring sessions.”

As for the tech disruption pillar, Malaysian technology companies must be able to show that they can stay competitive and continue to move up the value chain in order to expand globally.

“They need to ensure that their technologies offerings are future-proof.

“There are three identified ways to do this, said MDEC, namely intellectual property (IP) creation (by leveraging renowned R&D & IP partners), commercialisation, leverage R&D grants (like the Malaysian Investment Development Authority Domestic Investment Strategic Fund) and move up the technology value chain (by upgrading to big data for business intelligence and apply for Cloud ISV Certification).”

Finally, under the scale-up capital pillar, Malaysian technology companies will have the opportunity of increasing their financial strength.

Under GAIN, MDEC has identified over 30 companies with outstanding tech potential, which it considers “global icons.”

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