Khazanah aims for innovation, tech in GLCs with Transformation 2.0
By Kiran Kaur Sidhu August 2, 2018
- ‘Don’t mess up’ culture within GLCs a hindrance to tech and innovation
- Investments by local companies ‘shockingly low’ compared to other countries
THE Southeast Asia Venture Capital & Private Equity Conference (SEAVCPE 2018) brought together local and foreign players from the Southeast Asian industry under one roof. The July 31 conference held at the Securities Commission (SC) rounded up speakers and panellists from Bursa Malaysia, Employees Provident Fund (EPF), Monk’s Hill Ventures and Kumpulan Wang Persaraan (KWAP) among others.
Officiating the event was Khazanah’s deputy managing director sovereign wealth Azmil Zahruddin Raja Abdul Aziz (pic). In his keynote address, Azmil shared Khazanah’s plans under the Transformation 2.0 programme to help government-linked companies (GLCs) overcome challenges surrounding innovation and technology.
“Many companies, but especially GLCs, struggle with embracing technology and innovation,” Azmil said.
Spurred by greater competition in markets resulting from disruptive technologies and innovation, the five-year Transformation 2.0 programme was launched this year. The programme follows the conclusion of the 10-year GLC Transformation Programme in 2015.
In line with this, Khazanah also rolled out the Trending, Innovation, Disruption, Entrepreneurship (TIDE) programme to aid investee companies adapt to the swiftly changing technology landscape.
Based on the presentation, the slow adoption of tech and digitalisation are symptomatic of complacency and lack of awareness of the rapid changes in the outside world. Azmil explains that the ‘Don’t mess up’ culture prevalent within GLCs curbs employees from trying new things to push the companies forward.
“Since the beginning, the governance of these companies has set out to prevent potential mess-ups. But in an environment that is constantly being disrupted, our GLCs need to do something new to transform,” he said, adding that Tenaga Nasional Bhd (TNB) also faces potential disruption with distributed power and renewable energy on the rise.
Moreover, companies also struggle to transform due to difficulties in justifying the business case of embarking on new trajectories.
“When doing a cost and benefit analysis, how does one quantify the benefits of something like data analytics when it can’t be seen yet?”
Nonetheless, Azmil stresses on the importance of change and innovation, “It is difficult, but it is necessary not only for GLCs but also for the country to embark on this journey.”
With TIDE aiming to better prepare companies to face disruption, Khazanah’s portfolio of innovative and technological investments serves as a sensor towards these disruptive technologies, such as edotco, Sigfox and Touch ‘n Go’s joint e-wallet venture with Alipay.
“If we look at large investments that companies in Malaysia do, whether GLCs or not, the level of investments is shockingly low, compared to other countries with the same level of development as Malaysia. As a country, we have an issue that we need to solve.”
Although Khazanah cannot address it at the country level, Azmil said, “We can at least have that conversation with our companies to move it along.”