With the 2021 Budget tabled, its evident that the Government is steadfast in driving the economy up while at the same cognisant of the looming threat of the pandemic. Striking a balance was crucial in protecting lives and livelihood, its clear the Finance Minister was very detail on where the budget should be directed and the multiplier effects they can deliver for the economy.
One such area was in innovation and technology, as an agency tasked to identify and unlock the next generation of tech start-ups, MaGIC will see itself integral in the country’s aspirations of becoming a high-tech nation. CEO Dzuleira Abu Bakar shared her comments after the budget was announced, the various programs and developments set in place this year will only see being accelerated come next year. With a busy 2021 schedule, here’s what Dzuleira has to say.
MaGIC would like to thank the Prime Minister, Ministry of Finance, and Ministry of Science, Technology and Innovation for including various initiatives to accelerate an innovation-driven economy in Budget 2021. As anticipated, many of the announcements in Budget 2021 is centred around overcoming the COVID-19 pandemic and its impact on the national economy and our rakyat. We are confident that these steps are integral to accelerate Malaysia’s path to recovery and realise its vision of becoming an inclusive high-tech nation via an innovation-driven economy.
Across Malaysia, we are witnessing technological adoption at blazing speed as businesses, startups, and enterprises turn to innovation to navigate these uncertain times. The proposals in Budget 2021 will ensure that these entities are well-guarded and will continue to deliver impactful innovations and create jobs for the economy.
MaGIC will continue to play the lead role in empowering technology startups and social enterprises by providing them access to capacity building, market, regulatory and funding. Boosted by the initiatives tabled under Budget 2021, MaGIC is relentlessly committed to creating the next generation of resilient startups, better equipped and agile to thrive in the new economy, fuelling their growth to be sustainable.
COLLECTIVE GOOD THROUGH SOCIAL INNOVATION
We welcome the allocation of RM20 million to develop social enterprises further. Social enterprises have proven to be a leading light during the COVID-19 pandemic, as they continue to help the vulnerable sections of society in these difficult times.
In addition, the e-Perolehan Impak Kerajaan (e-PIK) will further boost social innovation-driven activities. The e-PIK is a bold and much needed initiative that leverages the government’s massive purchasing power to drive positive social and environmental outcomes in the country. Through this initiative, social enterprises (SEs) can supply goods and services to the Government in total up to 20 million ringgit per year and this translates to social value creation in areas such as community livelihood, food security, heritage preservation, our health & social wellbeing, and environmental protection. The initiative will begin its pilot phase in 2021, which will focus on establishing a viable proof of concept by testing the programme among eligible SEs and a few ministries.
The Government is also working with NGOs and SEs to tackle social and environmental issues, with RM100 million funding made available via a matching grant mechanism. The MySDG Trust Fund is another initiative that highlights the Government’s commitment in achieving United Nation Sustainable Development Goals (SDG) by 2030. Further funding is made available to the All Party Parliamentary Group to conduct programmes related to the SDGs.
ACCELERATING COMMERCIALISATION OF INNOVATIVE SOLUTIONS
The Budget has also placed emphasis on the need to accelerate research and development (R&D) as the country seeks to develop more innovative solutions that are commercially viable. A stronger ecosystem, encouraged by tax incentives, will definitely accelerate the commercial scalability of innovative solutions. This is in line with the objective of the National Technology and Innovation Sandbox (NTIS), which was recently launched in August this year. To develop an innovation driven economy, the NTIS is set to accelerate the commercialisation of intellectual property and innovative solutions through a holistic ecosystem approach, including connecting startups to investors and overcoming existing regulatory challenges.
Efforts to digitalise and automate businesses in the country under Skim Transformasi Pendigitalan, Skim Geran Pendigitalan SME and Geran Automasi are not only commendable but timely. This puts in place a stronger foundation for the future as we prepare to bounce back from the devastating impact of the COVID-19 pandemic. Our farmers, or rather, agri-preneurs, are also encouraged to go hi-tech under the Program Ladang eSatelit. This programme will encourage them to invest in Internet of Things (IoT) enabled assets, including Drone Tech, through a matching grant mechanism.
In a troubled economy, tech startups are finding it tough to secure investments to scale up. We are happy that investors via Equity Crowd Funding will be granted a tax exemption of 50% of the funds invested, limited to RM50,000. We hope that this initiative will encourage more investors to come forward and increase liquidity in the startups ecosystem. These initiatives, from driving the collective good through social innovation and accelerating the
commercialisation of innovative solutions will be key to accelerating our path to socio-economic recovery. As we look ahead to 2021, Malaysia is in a much stronger position of becoming a high-tech and innovation-driven economy.
Commentary from MaGIC CEO, Dzuleira Abu Bakar