Despite Malaysia’s unique confluence of different cultures and perspectives, when it comes to product development and commercialization, many of the country’s entrepreneurs tend to re-imagine and tweak rather than conceive and create.
The Malaysian population is quite skilled at researching new concepts and products: the country’s 5 designated Research Universities (RUs) all ranked in the top 50 Asian universities in the 2018 QS Asia University Ranking. Malaysia’s research publication output is also exceptional, having grown exponentially in quantity (5x from 2006-2016) and quality (almost 40% of the publications in 2016 were ranked in the top 25% of journals globally as defined in the Journal Citation Reports). This growth has occurred in spite of a lack of investment compared to many other SE Asian countries: over the past decade, Malaysia’s R&D expenditure as a percentage of its GDP has hovered around 1%, trailing average figures for East Asian countries (~2.5%), including leaders South Korea and Japan (both between 3-4%).
But product research is only as effective as the products it produces, and in Malaysia the process of commercializing new products is not as strong as the process of conceptualizing them. It is more common to trade or copy existing products than to market new products. The government even approved a national technology commercialization platform, PlaTCOM, specifically designed to address this issue. Copycatting is embedded in the culture and industry of Malaysia, similar to Vietnam with its flower and bamboo ladder streets containing countless vendors all selling the single product for which the street is named. In Malaysia, when a local coconut rice (Nasi Lemak) restaurant does well, three more identical restaurants open up nearby.
Similarly, much of the Malaysian startup landscape today involves replicating existing businesses or products as opposed to pioneering new ones. As is the case with businesses in most countries apart from global entrepreneurship leaders (countries like the U.S., Israel, and the UK), the vast majority of Malaysian startups are derivatives of existing successful international companies. Examples include iFlix, Southeast Asia’s version of Netflix, and BookDoc, a Southeast Asian version of the New-York based online doctor booking unicorn ZocDoc. The replication model of starting up has been proven successful many times over and should not be dismissed, but a truly disruptive model–the type of model that generates significant growth and allows Malaysia to surpass its regional neighbors–requires entrepreneurs who use creativity and resourcefulness to identify and solve previously unsolved problems rather than repackaging or re-selling existing products or solutions.
The established players within the Malaysian startup ecosystem are working to redefine how Malaysians think about entrepreneurship in order to spur innovation and produce the next great homegrown company. After all, creating truly new businesses would not only differentiate Malaysia from other SE Asian copycat-heavy ecosystems, but would entice local entrepreneurs and companies to grow in Malaysia as opposed to leaving for nearby Singapore and its concentration of capital.