What’s next for Malaysia’s startup scene: Q&A with MaGIC CEO Ashran Ghazi

Ashran Ghazi heads the government-run Malaysian Global Innovation and Creativity Centre. Photo credit: MaGIC.

Below is the second part of our one-on-one interview with Malaysian Global Innovation and Creativity Centre (MaGIC) CEO Ashran Ghazi. You can read the first part here.

Tech in Asia: What’s MaGIC’s budget for its startup programs?

Ashran Ghazi: We don’t have a fixed yearly budget but normally, at the country-level budget speeches, it’s been hovering around RM 40 million to 50 million on average per year [which is US$10 to $12 million]. That’s all we work with on a yearly basis. Right now we’re looking at using value creation as a metric to measure whether our involvement in any intervention makes sense or not. So at least we know if the initiatives we do create value.

How do you calculate value?

We’ve got various ways of looking at it. One, naturally, is the valuation of companies. If you’re running an accelerator program, at the end of it there’s a demo day, and you would actually know if your companies are raising money. We take that as a dipstick.

Companies that come to MaGIC’s startup program – we’ve helped value-create an x amount. Then that shows, when we rationalize internally, if we’re spending wisely. I’ll be asking how much is the value creation x factor. We figure out ways to optimize how we use taxpayers’ money to get the highest yield or economic returns.

It’s not so much about the financial return to MaGIC, but value creation. We try to think of it as running a business – if we can be efficient year on year with the same amount of budget.

Does the Malaysian government distinguish between Malaysians and non-Malaysians setting up in the country in terms of support?

As a whole, when we’re using taxpayers’ money – and I think this is applicable to any government – you gotta make sure the benefits go to your citizens first. Having said that, our MAP [MaGIC Accelerator Program] program, we’ve opened up to startups globally. We do have a ratio to make sure most of the money is spent on our own people.

MAP is 60 percent Malaysians and 40 percent anyone from the globe. We think that is beneficial to both sides of the equation.

What other kind of support can non-Malaysians expect from the government? Maybe in terms of how they operate or how they hire?

I’m not sure if you’re aware that via another peer agency MDEC, they have this “MSC Malaysia for Startups” program. That enables foreign companies to easily set up shops in Malaysia. Visa benefits and incentives are given. Even foreign talent – you can bring them in a lot easier than if you would go through the normal process.

We use that to encourage foreign startups to come and set up in Malaysia. It’s also for Malaysian companies that want to attract foreign talent. So if they apply to be an “MSC for Startups” company, they can bring in x number of foreign talents with ease. That’s entry level when it comes to encouraging.