Policies affect everyone while projects only benefit a few, says MOL Group CEO
It’s not just about projects and govt tenders, but also the necessary drivers and enablers needed, says MDeC CEO
THE Digital Malaysia masterplan to transform the nation into a fully-developed digital economy should focus on policies and not projects, said a successful dotcom entrepreneur.
“What we need are policies and not projects, because policies affect everyone,” Ganesh Kumah Bangah (pic, far right), the Group CEO of MOL Global, told the inaugural Disrupt series of networking events organized by the Technopreneurs Association of Malaysia (TeAM) and Digital News Asia (DNA).
Ganesh noted that despite there being successful e-commerce players in Malaysia such as Lelong.my, in 2010 the Multimedia Development Corporation (MDeC) and SME Corp launched the Malaysia Digital Enterprise Exchange (MDEX) to help get small and medium enterprises (SMEs) into business-to-business e-commerce.
“Their target was to do RM25 million in one year; that’s how much I do in one month with just one of my companies,” he said, arguing that it would have been more effective for the Government to drive e-commerce adoption in the country by focusing on creating the regulatory framework and providing incentives that would enable, encourage and facilitate e-commerce initiatives from the private sector.
The inaugural DNA-TeAM Disrupt panel discussed the issue With Digital Malaysia, is MDeC still relevant? Speaking on behalf of MDeC was its chief executive officer Datuk Badlisham Ghazali (pic, center). MDeC is the lead agency responsible for Digital Malaysia and custodian of the on-going Multimedia Super Corridor (MSC Malaysia) initiative. The session was moderated by DNA founder and CEO Karamjit Singh (pic, left).
Ganesh was positioned as an entrepreneur who had made his business a success with little or no aid from the Government, but he said that this was not accurate. MOL had received a government grant of RM1.2 million, though it was mostly buoyed by the millions poured into it by early investor Tan Sri Vincent Tan, the tycoon and founder of the Berjaya Group.
“What did help us the most in terms of government aid however was our MSC Status – the tax incentives that came with that really made a difference,” he said, noting that this was another example where policy was more effective than projects.
Digital Malaysia was first announced by Prime Minister Najib Tun Razak in 2010. When details of the initiative were finally unveiled earlier this year, the Government said Digital Malaysia would deliver its targeted goals via a number of projects. Eight projects have been identified for an initial wave, and the first has gone live.
Ganesh also questioned the “Malaysian way” of doing things. For example, aspects of the Digital Malaysia plan were crafted after a five-week lab involving participants from both the private and public sectors. This was based on the same model the Government used in rolling out its Economic Transformation Program (ETP).
“Few CEOs or entrepreneurs can afford to be away from their businesses for five weeks – all you do is attract salesmen who want to pitch their products,” he said.
“I was particularly insulted when somebody, in trying to convince me to attend the lab, told me that if I didn’t, I may lose out to a competitor when it came to the projects,” he said, adding that he finally attended the five-week lab, but only for three days.
“You want to be more effective?” he told MDeC’s Badlisham. “Don’t have a five-week lab and then roll out initiatives in six to eight months. Have a three-day retreat, and roll out within two weeks.”
Not just about projects
However, Badlisham noted that the Digital Malaysia lab was not just about projects and government tenders, but also discussed in depth the necessary drivers and enablers that would be needed for it to achieve its aims.
“We also discussed what needs to be done to roll out the benefits of the digital economy to the rest of the rakyat, by enabling civil society and non-governmental organizations (NGOs) to use such technologies for a greater reach, and a greater good,” he said.
“But what we need is to hear from all of you,” he said, pointing at the room full of technopreneurs and industry players. “Articulate your concerns and issues, work with your industry association like TeAM and engage with us. We can only get things done within our purview, but we can help remove red tape and facilitate.”
‘Monolithic economy dampens innovation’
Digital Malaysia also seeks to engender more startups and entrepreneurs, and a key sticking point in this space is the lack or private equity funds. Badlisham admitted he was not satisfied with the level of venture capital and angel investor activity in the country.
“But one reality that entrepreneurs will have to get used to is that the Malaysian Government will be dialing back on grants, for the simple reason that it is not a sustainable model,” he said, adding that the private sector has to step in and fill that gap.
“But neither can I blame venture capitalists (VCs) – we just don’t have sufficient quality deal flows in this country,” he argued.
A participant from the floor challenged Badlisham on this. Dr V. Sivapalan, an entrepreneur and co-founder of the AllStars accelerator program, said that Singapore-based VCs had in the last 18 months or so come in and invested in more than half a dozen Malaysian startups.
“I don’t think there is a lack of quality deal flows at all – I think one problem in Malaysia is that ours is a very monolithic economy,” he said.
“There are too few government-linked companies (GLCs) controlling too much of the economy. And we have been giving them too many concessions, which shows that the model is essentially broken. It is hard for startups to compete against them because they also enjoy some level of protection,” he said.
Dr Sivapalan recognized that smaller players can get into some big projects controlled by GLCs by acting as subcontractors, but that would mean eroded margins. “And you lose those margins needed to grow and expand your business,” he argued.
“That’s why there is a saying in the United States – the business of government is to stay out of business,” he added.
Ganesh agreed with that point, reading out from an article posted by blogger Ditesh Gathani in April last year, also published as a column in The Malaysian Insider, which ends with three very pertinent paragraphs:
“To help us move forward and build a working software ecosystem, the government needs to withdraw its grants and big projects. No more key focus areas and handouts. No more handouts and training exercises. No more junkets and technology conferences.
“Just let the ecosystem be. Let them compete on their own merits, as they may be, and find their way. Let them make their mistakes and learn from it. Trust me, with the pressure of having to succeed, they will learn fast.
“And who knows, they may even be wildly successful beyond anybody’s expectations.”
The DNA-TeAM Disrupt series is organized by DNA and TeAM, with support from IBM Malaysia and Plug & Play Technology Garden. Media partners are Amanz.my, BFM89.9, Big Orange, LowYat.net, Majalah Tech, Malaysia SME, Mobile88.com and PC.com Malaysia.
DNA’s Karamjit said he was very pleased at the turnout, telling the crowd that “the quality of interaction, learning, sharing and anguish that pours out of this event that is important to us.”
“It’s very much about how much you get out of it,” he added.
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