One of the motivations driving the stream of national digital plans announced in Malaysia in recent years is the premise that innovation intertwined with digital technologies will catalyse economic growth opportunities.
Recent frameworks include MyDigital and the National 4IR (4th Industrial Revolution) Policy especially point to a determination to encourage the use of frontier technologies to pull the economy into the 4IR age.
Linked to MyDigital, Malaysia’s rollout of 5G, seen as another potentially significant strategic effort to vitalise the nation’s recovery and growth, is under the purview of Digital Nasional Berhad, with a leadership comprising government and industry veterans.
One of the objectives of digitalisation lies in forming a technology ecosystem suited to rapidly expediting commercialising innovations. Objectives include generating a positive impact on job creation and generating export-ready products and services.
Cyberjaya-based Futurise was established in 2017 to speed up this process, explains its CEO, Mahadhir Aziz, during an in-depth interview with Disruptive.Asia.
Mahadhir, who in 2014 was initially with the parent company Cyberview, which is under Malaysia’s finance ministry, explained that Futurise’s mandate – through the National Development Council – is to drive the National Regulatory Sandbox (NRS) initiative to expedite intervention, deploy innovation and technology solutions with a view to forming new innovation-friendly ecosystems.
Although its focus ranges from the sharing economy, mobility (transportation), SportsTech, unmanned aerial vehicles (UAVs or drones) and autonomous vehicles, Mahadhir said the coronavirus pandemic has brought sharp focus on job creation.
“My own experiences at Cyberview and other organisations showed that while the Malaysian tech ecosystem is blessed with ideas, entrepreneurs and funds, we found that one of the biggest barriers holding these back from reaching their true potential is our own rigid approach to managing and regulating innovation,” he said.
“Malaysia is not unique in this aspect; when we established Futurise in 2017, other countries were facing the same challenges in managing technology-driven disruptions.
“New entrants such as Uber, Grab, Airbnb, Alibaba, Lazada, and many others were radically transforming their respective industry sectors, which gave rise to alleged unfair market competition – depending on your vantage point – and forcing conventional industry players to react and push back against new and innovative business models.”
Meanwhile, governments and regulators, through investor-friendly policies, had to balance the shoring up of new economic activities and ensure such interventions would not favour or discriminate against certain players.
Futurise has also aligned itself with government initiatives to manage the pandemic, Mahadhir continued. Futurise’s collaborations here prioritise the people, businesses and economy underpinned by its work with Laksana, the national economic implementation and strategic coordination agency under the ministry of finance.
“We have been assisting the rakyat (people) – who have been displaced from their jobs or forced into adding part-time jobs – with our work in collaboration with the Ministry of Women, Family and Community Development (Malay: Kementerian Pembangunan Wanita, Komuniti dan Masyarakat – KPWKM) to establish a guideline for an innovative way of providing new jobs in the area of childcare services,” he said.
“This was a new service provided by several Malaysian startups that the government felt was consistent with the intention to catalyse new types of economic activity through the gig economy umbrella.”
Recognising the need for a formal regulatory framework to safeguard all stakeholders involved in this innovative business, Futurise was asked by the government to assist KPWKM in developing a guideline and for the ministry to continue incorporating it into enforceable legislation.
“Another project during the pandemic that we believe is critical is the digitisation of government services” he added. “This is aligned to the Digital Economy Blueprint launched earlier this year. Digitising government services has become paramount to how businesses and rakyat interact with the government.”
“We are currently working with a local technology company to implement the changes arising from the adoption of the Digital Stamping Act, which means that the entire end-to-end process chain of managing legal documents can be managed digitally, thereby businesses can benefit from a cost reduction in managing the documents and the government is able to be more productive in handling this service for the rakyat.”
Mahadhir pointed out that regulatory-related work is laborious, requiring lengthy turnaround times to complete and takes place in the background.
National regulatory sandbox initiatives
Looking back to some highlights of the national regulatory sandbox, Mahadhir said: “Apart from those I highlighted earlier, we are happy that our previous work with the Ministry of Transportation (MOT) and Civil Aviation Authority Malaysia (CAAM) has resulted not only in the Malaysian Civil Aviation Regulation (MCAR) document but also the exponential growth of companies providing services related to the Unmanned Aerial System/Vehicle (UAS/V).”
More than 80 companies have been impacted under MCAR/FOD, and more than 5,000 jobs will have been created by 2025.
“Moreover, we have also seen new services arising from the establishment of regulation and guidelines that ranges from safety & security to the delivery of goods, and which enables more participation and opportunities for companies,” he continued.
Mahadhir explained that in addition to new requests for the use of Futurise’s Malaysia-first Drone Testing Zone (DTZ), the agency is also working with other stakeholders in Johor and Pahang to establish DTZs in their respective areas.
“Similarly, the completion of the Cyberjaya Autonomous Vehicle Guideline in 2019 allowed us to establish the Malaysia Autonomous Vehicle Testing Zone (MyAV) – another first of its kind on Malaysian public roads, last year,” he added.
Futurise has since received inquiries to use the facility from local and foreign technology companies and is working with the ministry of transport to evaluate these proposals.
Malaysia’s future economy
Futurise is also committed to collaborating with other agencies and the private sector, said Mahadhir. “The effort to achieve Malaysia’s digital transformation will always be a collective one.”
“‘Future Economy’ is how we structure and plan our priorities at Futurise, and this should not be mistaken as a deviation from the Malaysia Digital Economy Blueprint,” he explains. “It was conceptualised in 2018 when we believed that the digital economy agenda was to be driven solely by MDEC [Malaysia Digital Economy Corporation] and that the definition was too broad for the ecosystem to chew.”
“We [therefore] sliced it into a digital economy with smart city-centric, gig & sharing economy and circular economy components to help action our phases of development and rollout of the NRS [National Regulatory Sandbox] initiative.”
“The goal remains the same – and we are in the gig economy phase at the moment where our work with KPWKM and others will help us narrow our focus onto the gig economy subset of the larger digital economy agenda,” he added.
Collaborations with agencies such as Akademi Sains Malaysia (ASM), Institut Sukan Negara (ISN), and academia (UKM), as well as international organisations including Korea Development Institute (KDI), will enable further insights into areas where improvements are needed.
“And most importantly for us and the government, regulatory intervention needs are identified and managed early to ensure that they will not become impediments as the innovation begin to make its way to the mass market,” Mahadhir stresses.
Impacting the recovery
The NRS initiative, which includes guidelines for UAV, DTZ, MyAV, mobile childcare and Digital Stamping projects, has fostered new opportunities and repurposed new jobs in various industry sub-sectors, Mahadhir added.
“Malaysia has always been producing highly-skilled talents in the creative content, software development and data science sectors – although the same talents have found it increasingly difficult to compete in limited and saturated tech ecosystems,” he points out.
“Innovations anchoring Industry 4.0 technologies such as artificial intelligence, deep/machine learning, and big data analytics have unlocked different applications of technologies to improve how we manage tasks in existing industry sectors. UAV or drones, for example, has given rise to a new set of requirements and jobs for AI engineers, data scientists and data analysts in addition to the already highly required software engineers, hardware engineers and system integrators.”
Futurise believes in creating new sub-sectors within the technology space and rejuvenating existing conventional industry sectors through digitisation and the increased use of technology.
“This essentially forms a key component of Malaysia’s digital transformation vision and our work thus far has potentially created more than 32,250 jobs that are aligned with the Digital Economy,” he adds.
The new reality
Mahadhir’s views on the ‘new normal,’ ‘hybrid reality’, and so forth are anchored in practicality.
“Unfortunately, the common theme of most conversations these days concern a few aspects – the sustaining power of rakyat and the SMEs under our various lockdowns, the speed of vaccination programme, and the long-awaited reopening of economic activities – as well as concern about surviving in the post-pandemic era.”
“I strongly believe that when many of us speak of the “new norm”, we inadvertently fall into the trap of assuming that we will be able to return to the old ways of doing things,” he continued.
“[However] some types of jobs, businesses and models have transformed forever as a result of this pandemic, for better or for worse. Digitisation and technology adoption is a necessity to survive and compete in the global arena after this pandemic.”
“Some severely affected industries such as transportation and hospitality will have to review how they deliver their user experience (UX) or customer experience (CX),” suggested Mahadhir.
“We at Futurise remain open and aware that digital transformation may expose archaic and outdated laws and regulations that governments and private sectors alike will be forced to address and manage if we were to achieve the digital transformation vision – and this surely is not only limited within Malaysian borders.”
As the old business adage has it: The vision is only the tip of the iceberg: the actual task of implementation primarily by concerted private-public action has never been more urgent.
For his part, Mahadhir said one of last year’s milestones was sustaining the momentum of Futurise in delivering the NRS mandate despite the pandemic.
“It is not only about achieving our KPIs [key performance indicators]; it is about creating a lasting impact through our work which will assist the rakyat survive this unfortunate period, and to enable the government to manage the economy and revive the nation’s ability to overcome this huge challenge.”
“We all have to contribute towards the national agenda,” Mahadhir concludes. “The government will focus on ensuring that the nation has good infrastructure and facilities for digital transformation – and this includes a robust, progressive and adaptive regulatory framework. The concept of allowing markets to dictate themselves must arise through enough private sector organisations being invested in the development of the markets coupled with adequate control and policy-making by the government.”