- Malaysia as a gateway to SEA and UK as a launch pad to more mature markets
- Long mutual history makes business relationships between countries attractive
FORTY technology companies from the United Kingdom were in Malaysia from Oct 9 to 11 as part of the UK Mega Tech Mission organised by the UK’s Department of International Trade and the Malaysia Digital Economy Corporation (MDEC).
This is the largest UK tech delegation ever to visit Malaysia, almost four times larger than last year’s delegation of 11 UK tech companies.
At a press conference on Oct 9, British High Commissioner to Malaysia Vicki Treadell said that about 800 business-matching meetings had already taken place, meaning that the mission would meet its ambitious target of 1,000 B2B meetings.
In comparison, last year’s mission (Nov 22 to 24) saw about 150 business-matching sessions take place between 11 UK and 30 Malaysian companies.
According to the British High Commission, a total of RM270 million (£48.5 million or US$64 million) of foreign direct investment (FDI) has been made in Malaysia by UK companies as a direct result of last year’s mission, which represents a 54% year-on-year growth in FDI.
In addition, more than RM40 million (£7.1 million or US$9.5 million) of trade between UK and Malaysia has been generated through partnerships with Malaysian companies.
MDEC chief executive officer Yasmin Mahmood said that MDEC expects as strong or even stronger growth this year as a result of this mission, stopping short of predicting exactly how much FDI the mission will see in monetary terms.
Progress in creating and cementing relationships between UK and Malaysia tech companies has been quite good considering that the memorandum of understanding regarding the tech missions from the UK was only signed in June last year.
“So many MoUs are signed and nothing happens afterwards. We were determined that in this case that with the ambitions both Malaysia and Britain have with their digital economies, we would deliver something real,” said Treadell.
UK’s national technology advisor Liam Maxwell added that the future opportunities for British companies in Malaysia are great.
“The Malaysian business environment is a great starting point from which to expand business in the Asean region. This is something we should press on with quite strongly.”
“We want Britain and Malaysia to see each other as partners of choice, working together government-to-government and business-to-business,” added Treadell.
“Our countries have a long history and at the forefront of this relationship is a broader trade agenda. We are looking to develop trade and our economic relations, and the digital sector is certainly at the heart of this.”
Yasmin said that while Malaysia acts as a gateway to emerging markets for UK tech companies, the UK serves as a mature market and an access point to other mature markets for Malaysian technologies.
“I hope that our familiarity with Britain and the unique proposition that each market brings to the other will result in many serendipitous moments for our tech companies,” she said.
Relationships for the future
Dylan Thomas, director of technology and smart cities at the UK’s Department of International Trade said that the UK has learned from competitors that government support for small and large companies doing international business is important, therefore the UK is very keen to build good partnerships for British companies in the Malaysian tech scene.
“We are more assertive in this space now. We recognise the challenges ahead for us [such as UK’s impending exit from the European Union] but also see the opportunities,” he said.
Thomas was quick to rebut suggestions that UK companies will face competition from Malaysia’s partnership with China via Ali Baba, saying that he sees this relationship as an opportunity for both Malaysian and UK companies rather than a threat given that Ali Baba’s mandate is to be a platform that enables other businesses to succeed.
He also said that there has been no negative feedback or doubts expressed by Malaysian companies regarding their future in partnerships with UK companies in light of Brexit. Instead, there has been keen interest in the opportunities because, much like Malaysia, the UK market has a large consumer base of first adopters of innovative technologies.
The UK has also recognised that it is in its interest to start talks for trade agreements independent of the EU.
“We recognised that the demographically, the EU is not growing as fast as Southeast Asia. It makes sense to look at potential trading relationships we can have when were outside the EU.
“Whatever our future relationship with the EU is, we are still a great base to sell into Europe. We also provide the opportunity to get into North Africa and the Middle East, and are an excellent launch pad into the east cost of the US,” he said.
Strong pull to invest
Treadell announced two strategic partnerships on Oct 9 – the first between Action Starter (UK) and CXS Analytics (Malaysia) and the second between Kino-mo (UK) and People n Rich Holdings (Malaysia).
In the first partnership, the platforms of both companies will be integrated to deliver digital solutions to job seekers, policymakers and educators to address employment, training and development issues.
In the second partnership, the Malaysian company will promote the adoption of new ad-tech innovations by the UK company through the introduction on a media planning solution for creating, displaying and managing 3D content.
Action Starter’s co-founder and technology lead Simon Kaguramamba said that the five-year old UK tech startup, which also participated in last year’s tech mission, was eager to partner with CSX not just because both companies are striving to solve the same problem but because the pull to invest in Malaysia is strong.
“To us, it feels like Malaysia is in a transformative state. The public sector is playing ball and everyone is out there doing something great for themselves. There are a lot more British companies in Malaysia today than this time last year, so the noise is getting out there that this is a good place to do business. Britain and Malaysia also share the same principle goals in terms of digital economy,” said Kaguramamba.
He added that the level of education in Malaysia being on par with that in the UK – there being a number of locally-based UK universities – was also a big draw for Action Starter because it means that the startup does not have to change the way in which it has to work to operate.
This was echoing Maxwell, who said that the high number of information technology and science graduates in Malaysia as well as long-standing business and trade ties between the UK and Malaysia are attractive to British tech companies.
“It is also interesting that few countries have a specific digital economy focus; this is one of the things that the UK and Malaysia share,” he said, adding that active government involvement through MDEC enables further generation of business between the two countries.
“The future here looks very bright,” said Maxwell.
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