KPMG: Kuala Lumpur among Top 10 cities in ASPAC seen as leading technology innovation hubs
By Digital News Asia July 29, 2021
- More is needed beyond simply introducing newer policy statements
- Continued global confidence in country’s potential as a development hotbed
KPMGs global Technology Industry Survey 2021 involving more than 800 industry leaders reveals that 61% say the pandemic has changed their opinion of which cities will become leading technology innovation hubs. Only one third feel that Silicon Valley will maintain its innovation leadership position, while an equal number feel it will not.
According to the published report, outside of Silicon Valley/San Francisco, industry insiders ranked Kuala Lumpur the 9th top city in the ASPAC region seen as a leading technology innovation hub over the next four years. This is based on several factors both at a local level such as infrastructure and demographics, and at a macro level such as the regulatory environment and potential national tax incentives.
[Ed: Para edited for clarity. Part of a sentence was missing from the earlier version.]
Guy Edwards (pic), Head of Technology, Media and Telecommunications (TMT) sector at KPMG in Malaysia, opined that this isn’t all that surprising considering several studies have already recognized and identified factors that make Malaysia an attractive investment opportunity.
“There is definitely continued global confidence in the country’s potential as a development hotbed thanks to the Malaysian Government’s dedication to advance the country’s technology infrastructure with the introduction of initiatives such as the National 4IR policy. While government impetus could be just the thing to amplify Malaysia’s potential as a tech hub, more is needed beyond simply introducing newer policies,” he said.
Guy suggests that greater public-private partnerships in research and higher education could play a vital role in realizing the country’s full potential and climbing up the ranks. This will rely on demonstrated evidence to give private players confidence in the long-term viability of such policies and their effect on businesses, people and the environment. “There is no one-size-fits-all approach, but with multiple government initiatives available, companies will need to continuously engage with government agencies for Malaysia to reap the benefits of the government’s commitment,” he commented.
Meanwhile, globally and within ASPAC, Singapore has once again taken the top spot among the top ten cities seen as leading technology innovation hubs outside of the Silicon Valley in the next four years. Other cities in the ASPAC region in the top ten include Beijing, Shanghai, Tokyo, Bengaluru and Hong Kong.
According to Darren Yong, Asia Pacific Head of TMT at KPMG, “We are seeing Asia take a leading position in innovation across the world and as highlighted in this report, more than 50 percent of these top innovation hubs are based in this region. Asian cities will continue to be a hotbed of creativity and we expect even more activity as organizations invested in Asia look to further disrupt business models to capture the world’s largest consumer population.”
The cities making the top 10 all had strong ecosystems in place before the pandemic, enabling them to emerge stronger – and potentially provide a real challenge to Silicon Valley – as the world prepares for a post-Covid recovery. While Silicon Valley is still known as the dominant region in global technology, the success of the technology sector has outpaced most industries during Covid-19. This has increased perception that innovation can now happen literally anywhere. No matter where a technology hub springs up, there are certain factors that are crucial to its long-term viability, chief among them is talent.
Guy explained, “Skilled talent and intellectual property are the lifeblood of the tech industry. For Malaysia to climb up the rankings, it’s a strategic imperative to attract and retain top talent and have programs in place that focus on continuous training and upskilling. Not to be underestimated are the tax and regulatory environments; companies seek to maximise their global competitiveness amid ongoing global tax reforms, and an increasingly remote workforce adds even more complexity to this. Locations that offer generous tax benefits will consistently have an advantage in attracting corporate investment over ones that don’t.”