DisruptInvest 2024: Gobind Singh talks digital, true investments and Madani but can he be bold?

• Brush aside same old and outdated excuses over why it cannot be done and have trust
• Must collaborate with other ministries to make the country shine as a digital nation

Malaysia’s Minister of Digital, Gobind Singh, spoke at the 5^th DisruptInvest Summit on 23 May where he highlighted the government's commitment to support and help grow a strong startup ecosystem through various initiatives, with the launch of the inaugural KL20 summit in April designed to help spotlight Malaysia’s startup ecosystem to international VCs, as the latest signal of this intent. The government stressed its ambition to see Kuala Lumpur recognized as a Top 20 Global Startup Ecosystem, hence KL20, by 2030.

With KL currently in the 70^th spot, leapfrogging 50 spots within six and a half years is a massive challenge that will demand bold moves and strong support from the government.

One such bold move, and yet low hanging fruit, will be to get government, the largest buyer of tech services in the country, to have its various ministries and agencies shift a small percentage, say 10%, of their IT spend to startups and homegrown tech companies that have built their own solutions.

This is not a novel idea and has been floated many times. I once asked Malaysian Prime Minister Mahathir Mohamad, during a press conference in 2002 as to why he couldn’t just mandate a small percentage of government IT spend be allocated to Malaysian tech companies to give them a leg up and test the value of their solutions. The question was not taken seriously.

But two decades later, the question must be taken seriously. Because, today, just as back then, the government aspires for Malaysian tech companies and its startups to be regional if not, global players. But if we still do not show confidence in our homegrown tech founders and their companies today, where some have crossed RM400 million in revenue, then stop aspiring for such bold targets, because actions reveal true intent.

Here, Gobind can lead by example, be bold. As a new ministry, the Digital Ministry has no long-established relationships with IT vendors and it should be the most digital in terms of its processes and engagement with the public and business. Gobind must brush aside the same old and outdated excuses over why it cannot be done and allocate a decent percentage of his IT spend to homegrown tech companies.

The lessons he learns can then be applied to the Economy Ministry which is run by Minister Rafizi Ramli, a founder himself. And from there to another ministry and so on.

Let’s see if Gobind, whose appointment as minister was well greeted by the tech ecosystem, leads the way.

Importance of capital

Gobind who also spoke at KL20, described capital as a catalyst to fuel KL20’s ambition, empowering innovators to push boundaries, challenge the status quo. “The world of tomorrow will be built on the investments of today,” he said. The importance of capital was also a key identified by Chua Kee Lock, CEO of Vertex Holdings, who stressed during his keynote that funding was the critical factor in startup success.

This is also why the government is currently consolidating the two key public startup funding agencies, Mavcap Bhd and Penjana Kapital Sdn Bhd, to run as a single entity under the responsibility of sovereign wealth fund, Khazanah Nasional Bhd. With both operating as fund of funds, consolidation will give the government better visibility on the performance of its startup investments.

As the Digital Minister, the first time such a Ministry has been created in Malaysia, Gobind’s mandate is broad as the economy and life increasingly become digital in nature. Pikom, the National ICT Association is predicting that 25.5% of Malaysia’s economy as measured by GDP will be contributed by the Digital Economy by this year. As such, when he speaks of investment, Gobind does not just refer to startup funding.

For instance, he noted the 279% jump in digital economy investments (mainly in data centres) the country enjoyed in the first half of 2023, translating to RM28.4 billion. And, without giving the time frame, he shared that almost 70% of Malaysia’s RM225 billion approved investments are in the digital economy.

[Ed: Approved investments are not the same as realized investments with the latter always falling short of the former due to factors such as changes in company’s leadership/direction, macroeconomy shifts, and where investors and the government are unable to agree on actual details/benefits.]

He also shared that Malaysia Digital Economy Corporation (MDEC), one of the agencies under his portfolio, had facilitated 262 funding deals for local tech companies, worth US$402 million between 2020 and 2023.

Gobind’s responsibility, as Digital Minister, is to collaborate with other ministers to make the country shine as a digital nation and a digital economy with a highly digital savvy population. Take care of that and the digital skewed investments will come in, be it from an infrastructure side; for startups; for automating manufacturing or making businesses more efficient through 5G adoption.

One international collaboration Gobind spoke of is with leading pre-accelerator, Draper University that announced in March that it will set up a base in Kuala Lumpur- its first campus outside of Silicon Valley. “Such a move is vital in supporting and spearheading the pipeline of VCs, and startups looking to enter and expand in Malaysia,” said Gobind.

Does not see need to stamp mark by creating new blue prints/masterplans

One interesting aspect of Gobind’s leadership of the Digital Ministry, which is coming up to six months since his appointment, with less than 280 bureaucrats (note that this is separate from the headcount of the various agencies that report to the ministry), is how he is carrying out the role by working within existing initiatives launched in support of the digital economy and not launching any big bang blueprints/road maps himself.

His rationale being that existing roadmaps/blueprints have been well thought out and need good execution to deliver results. Changes needed, based on ecosystem feedback, can be done without tearing up existing plans and starting over. “He does not see the need to stamp his own mark via grand initiatives,” said an executive familiar with his mindset, who feels Gobind is applying lessons learnt from his first stint as minister from May 2018 to Feb 2020.

He is also pushing for impact on business and citizens. When briefed on activities by the agencies and companies that report to him, among those being MDEC, MyDigital Corp, CyberSecurity Malaysia (CSM) and Digital Nasional Bhd (DNB), Gobind seeks to understand how the target market is able to benefit. “He has made clear that he does not want to see initiatives run or new ones created just for the sake of reporting,” said the executive.

Seeking inclusive, sustainable growth via Madani framework

With the Madani Economic Framework being the guiding principle in the government’s leadership and development agenda, Gobind stressed that, “true investment is not merely about allocating capital. It is about fostering a legacy of prosperity and progress by investing in the betterment of society, and the advancement of humanity.”

He said this serves as, “the moral compass for initiatives such as the KL20 Summit, with action plans geared toward ensuring sustainable economic growth and social justice.”

And with Malaysia assuming the ASEAN chair next year, Gobind stressed that his ministry is committed to building a conducive digital ecosystem for the country and the region. “This cannot be done without ethical investment.”