Technopreneurship: A promising call for the unemployed
by Ghaz Ghazali. Posted on December 11, 2011, Sunday
The call for the Malaysian society to be a highly-technocratic one is not a new notion. In his Vision 2020 working paper in 1991, former premier Tun Dr Mahathir Mohamad highlighted the need to establish ‘a scientific and progressive society’ as the sixth challenge out of nine outlined in the national agenda.
In Budget 2011 tabled by Prime Minister Datuk Seri Najib Tun Razak last year, the government would provide the ‘Entrepreneurship Enhancement Training Programme’ to train 500 new technopreneurs and attract more investors.
Additionally,the Malaysian Technology Development Corporation (MTDC) would be provided with a start-up fund amounting to RM100 million to furnish soft loans that allowed loan repayments only after companies had generated income.
Obviously, the government wanted to see more technopreneurs running the small and medium enterprises (SMEs) in the country.
“SMEs had to grow at about 8.5 per cent annually in order to contribute about 41 per cent to Malaysia’s gross domestic product (GDP) by 2020,” stated SME Corporation Malaysia’s (SME Corp) chief executive officer Datuk Hafsah Hashim recently.
She added that towards achieving such a goal, SMEs had to grow unexceptionally different, meaning they must have that ‘leapfrog’ growth.
“To be able to do that, we need to ensure that they are growing on the premise of innovation, creativity and higher productivity. One of the ways is to encourage SMEs to use ICT,” she stressed.
Currently, there are over one million SMEs in Malaysia, employing 56 per cent of the nation’s workforce and generating 32 per cent of the nation’s GDP.
If the figures presented in a recently-published research by Indonesia’s Agency for the Assessment and Application of Technology (BPPT) were to go on by, the number of technopreneurs in Malaysia could well be over 800,000 individuals, or three per cent of the 28.68 million population – close to the nation’s unemployment rate of 3.4 per cent.
Imagine if those 3.4 per cent jobless individuals took the same steps as that of the three per cent technopreneurs; the country would ideally have zero-unemployment rate.
“With technopreneurship, the world is the market. You just cannot go wrong,” said Muhammad Abdullah Zaidel, finance lecturer for the Faculty of Economics and Business at Universiti Malaysia Sarawak (Unimas) to BizHive Weekly.
Understanding the concept
As futuristic as it may sound, a technopreneur is basically an entrepreneur with both business and technical training background; or one who applies technology and innovation as the business’ core operating model.
In Malaysia, this branch of enterprise is usually represented by ICT and multimedia SMEs, either at seed-level or already over the start-up stage. According to Bank Negara Malaysia, a general definition of an SME refers to an enterprise with shareholders funds of less than RM10 million.
On the other hand, SME Corp stated that an entreprise that generated an annual sales turnover not exceeding RM25 million and with full-time employees not exceeding 150 people was considered an SME.
Notably, SME Corp also specified the definition of techno-SMEs as a sub-services SME with annual sales turnover of not more than RM5 million, with a full-time workforce strength of 50 employees or less.
“SMEs in Malaysia still account for over 90 per cent of total business establishments in the country’s three core economic sectors of manufacturing, services and agriculture,” stated SME Corp’s Hafsah.
“Its contribution to the country’s economy remains significant,” she added.
Prospective career choice
However, the general state of any businesses in the world – SMEs or corporations – was that it was highly competitive.
In his view on this, Muhammad Abdullah said technopreneurship would be a good bet for unemployed graduates as well as those thinking to kick-start their own businesses.
“With today’s economic globalisation alongside the booming information technology age, I think we should encourage our unemployed youths and graduates to develop entrepreneurial spirit through technopreneurship.”
Additionally, the Unimas lecturer said within the stiff business environment, it would remain crucial to introduce policies and activities that could directly improve the competitiveness of Sarawakian youth in the future.
Listing weak marketing channels and limited capital as the main obstacles faced by young entrepreneurs, Mohamad Abdullah pointed out that awareness amongst these ‘young bloods’ with regards to assisting channels remained low.
“All the while, our government and its various agencies seem to have been providing direct support for the ‘brick-and-mortar’ entrepreneurship development for novice entrepreneurs.
However, it remains a fact that most of our youths, especially the Bumiputeras are still ‘weak souls’ when it comes to entrepreneurship.
“Empirically, entrepreneurship is a skill that can be learnt and taught – but most importantly, one must have the passion and discipline with a clear objective of his or her goals.
”Stressing further on the need for the country to develop a weightless economy in its journey towards economic transformation, Mohamad Abdullah believed technopreneurs could be the solution for a sparsely-populated state like Sarawak, where new business ventures should rely on innovation.
“Computer software, new media, electronic databases and libraries, as well as Internet delivery of goods and services business is a classic example of technopreneurship.
Thus, technology-based SMEs in Sarawak should be induced further by which, it will eventually drive job opportunities in major industries in preparation of impending influence of any major global economic crisis,” he underlined.
Statutory role Nevertheless, a techno-SME would still need a comprehensive development base that could further drive technopreneurs towards success.
According to Mohamad Abdullah, a synergistic technopreneurship would ideally comprise a technopreneur as the business initiator; research institutions as centres of innovation of new technologies; and a venture capital (VC) company as competent financier.
He added that the learning structure for technopreneurial development must be designed towards combining 20 per cent theory and 80 per cent application of various fields of competence.
“To achieve this, we need a business incubator to serve as a centre of learning, with a conducive business atmosphere supported by adequate laboratory facilities.
A VC will come in as a financial assistance to the business – from start-up, research and development right to marketing and distribution.”
In the middle of this year, Multimedia Development Corporation (MDeC), the custodian of the Multimedia Super Corridor Malaysia (MSC Malaysia) initiative, launched the ‘Icon2 – Second MSC Malaysia Integrated Content Development Programme’ – the sequel of the first content development programme that was completed last year.
Similarly to its predecessor, Icon2 would furnish local developers with the skills and means – including the start-up capital – to create content-based products.
The programme was also initiated to provide a platform for the younger generation to play an active role in the country’s transformation into a fully-digital economy, following the target outlined in the Economic Transformation Programme (ETP).
Closer to home, the Sarawak Information Systems Sdn Bhd (Sains) had modelled a successful Rural ICT Guide Home-based Technopreneur (RIGHT) programme, which trained rural youths to be ICT anchors and home-based technopreneurs in their respective communities.
In Sabah, the Sabah West Coast Techpreneur Association (Sata) – established on August 30 last year – became the first NGO there to focus on IT-related entrepreneurship development.
Interestingly, the adoption of the word ‘techpreneur’ without the syllable ‘no’ in it was done on purpose to add a more positive character in the name.
“Looking to the future, all these channels and means are directed towards preparing our youth to love innovation.
Hopefully with the emergence of a technopreneurship generation, it can provide solutions to the problems of the country’s youth unemployment,” observed Mohamad Abdullah.
“It also can become an arena to improve the quality of human capital in science and technological mastery, so that we can prepare towards having a powerful force to stand up against global competition,” he underscored.
With the burgeoning development of technology, it is just natural for entrepreneurship to evolve into an advanced level that enables it to grow even more enterprising than a decade ago.
Starting with Vision 2020 as the springboard, MSC Malaysia was conceptualised in 1996 to become the country’s thriving and dynamic global ICT hub – much like the established Silicon Valley in California, the US.
“It was exactly modelled after the Silicon Valley,” said Sun Microsystems Inc co-founder Dr John Cage back in 2005, adding that the nation’s success would be an example to follow for many emerging countries.
“They will learn from Malaysia,” Dr Cage emphasised.
The MSC initiative, while considered as being successful in terms of attracting large firms and multinational companies (MNCs) into the cluster, had not been as successful in terms of being a support system towards spurring the growth of SMEs in this sector.
In overcoming these gaps, the government launched a developmental promotion strategy called the ‘MSC Technopreneur Development (MTD) Flagship’ programme.
In a 2008 interview, MDeC’s chief executive officer Datuk Badlisham Ghazali highlighted several measures taken by the agency to ensure that MSC Malaysia would contribute significantly to the goal of making Malaysia a developed, knowledge-based economy by 2020.
“Towards this end, one focus of MSC Malaysia is to increase the Bumiputera participation in the ICT sector through various programmes that not only evolve young Bumiputera entrepreneurs, but also improve the competitiveness of the existing Bumiputera ICT firms,” he said.
Through the introduction of Bumiputera Technopreneurs Development (BITE) and Technopreneur Academy (TAP) programmes, the government and MDeC would be aiming to create at least 400 Bumiputera ICT entrepreneurs in the next five years under a programme that had been contracted to Alam Teknokrat Sdn Bhd (Skali).
Overall, MDeC put a projection for MSC Malaysia-status ‘techno-prises’ to achieve a 21-per cent increase in gross domestic product (GDP) contribution to RM42 billion by end-2015, under the MSC Malaysia Phase 3 plan.
In comparison, the plan recorded RM34.57 billion in GDP contribution during Phase 2, which ran from 2004 to 2010.
By end-2015 also, the agency put forth a target for these MSC companies to increase their revenues to RM142 billion from the RM103.8 billion recorded in Phase 2; while a 75-per cent increase in exports to RM58 billion from previous RM33 billion, and a 47-per cent increase in job creation to 160,000 from 111,367 would be expected.
“Over the years, MSC Malaysia has enjoyed remarkable success,” viewed Badlisham.
“From 2003 to 2009, the number of companies with MSC Malaysia-status grew 15 per cent annually, bringing the total to 2,520 companies.
“Of this figure, total exports amounted to US$2.2 billion.
MSC Malaysia accounted for 1.7 per cent of the nation’s GDP, with the larger ICT sector accounting for 9.5 per cent,” he underlined.
Most likely, the number of MSC Malaysia-status firms in the country could easily be close to 3,000 companies.
Additionally, the total accumulated revenues of MSC Malaysia-status companies were more than RM20 billion – close to its annual revenue target of RM27 billion.
The other field
If MDeC is responsible for overseeing advances in ICT-based technology companies, the Malaysian Biotechnology Corporation (BiotechCorp) is tasked with developing another key knowledge-based industry – biotechnology.
“When we talk about biotechnology, we talk about it as a business,” said former BiotechCorp’s chief executive officer Datuk Iskandar Mizal Mahmood.
If an ICT-based company can boast of having an MSC Malaysia-status, then biotechnology firms can be accreditated with a Bionexus-status.
Awarded by the government to qualified companies participating in value-added biotechnology activities, a BioNexus-status company can enjoy a set of incentives contained within the ‘BioNexus Bill of Guarantees’; at the same time, receiving continuous support and assistance from BiotechCorp on immigration-related matters, intellectual property (IP) advisory and regulatory services, as well as employment-related and taxation issues.
“BioNexus is an integral component of the national biotechnology policy,” stressed Iskandar.
Since its establishment in 2005, BiotechCorp has facilitated the development of 204 BioNexus-status companies in the country with a total approved investment of RM2.102 billion.
Going techno With all this development going on, is it easy to become a technopreneur? Technically, yes.
Early this year, Prime Minister Najib launched a RM100-million Business Start-Up Fund to promote technopreneur development under government-backed MTDC, slated towards paving the way for youngsters to come forward and take the risk of venturing into new fields.
Targetting new technology-based start-up companies, these techno-prises must be 70 per cent owned by technopreneurs, or a group of Malaysian entreprenuers who must operate the company full-time.
Under the management of MTDC between 2006 and 2010, a total of 159 projects with early-stage funding of RM295 million were approved under the commercialisation of research and development fund (CRDF).
Further, MTDC figures showed grant recipients had generated sales totalling RM637 million and that 199 intellectual properties were filed over the five-year period.
Meanwhile, government agencies namely MTCD, SME Corp, Malaysia External Trade Development Malaysia (Matrade), Ministry of Entrepreneur and Co-operative Development (MeCD), Ministry of Science, Technology and Innovation (Mosti) and Credit Guarantee Corporation (CGC) have been offering grants specifically for local SMEs and small/medium industries that meet the criteria.
Statutory body Sarawak Economic Development Corporation (SEDC) under its entrepreneurial development division, has been organising series of pre-seed technopreneur workshops, with supports from MeCD and MDeC.
In reality, however, many aspiring technopreneurs remained unaware of these facilities.
With numerous programmes set up by the government to develop ideas into products, all parties should team up to take these ideas to next stage of full commercialisation.
On the support provider’s side, the government and its respective agencies should promote these programmes more aggressively.
On the recipients’ side, they should explore more which meant they must ask around, seek around and act.
Prime Minister Najib summed it quite poignantly during the the launch of the 23rd MSC Malaysia Implementation Council Meeting in October.
“Do we want to just be achieving what is expected; or do we want to springboard ahead of the pack?”
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