Promoting Business Incubation : Malaysia Experience

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Promoting Business Incubation Malaysia
Experience

• presented by
• Borhan Sidik
• Deputy CEO, SME Corporation Malaysia

7th INTERNATIONAL CEO FORUM FOR CHIEF EXECUTIVES
OF DEVELOPMENT FINANCE INSTITUTION (18th
November 2010)
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Outline of Presentation

• Malaysia in Brief
• Roles Functions of SME Corp. Malaysia
• Profile of SMEs
• Strategies Policies on SME Development
• General Information on Business Incubator
• Business Incubator in Malaysia
• SIRIM Berhad
• MTDC Technology Centres
• Technology Park Malaysia (TPM)
• SME Bank Factory Complex
• Success Story of Incubator
• Closing Remark

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Malaysia Basic Statistic

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Role Function of SME Corp. Malaysia
Development of competitive and resilient SMEs in
all sectors
Vision Mission
The premier organisation for the development of
progressive SMEs to enhance wealth creation and
social well-being of the nation
Promote the development of competitive,
innovative and resilient SMEs through effective
coordination and provision of business support
ROLES FUNCTIONS OF SME CORP. MALAYSIA
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Profile of SMEs

• Total establishments 552,804
• No. of SMEs 548,267 (99.2)

Establishment of Enterprises
SME Distribution by Sector
4,537 (0.8)
Agriculture(6.2 )
Manufacturing(7.2 )
12,610 (2.3)
100,333 (18.2)
Services(86.6 )
435,324 (78.7)
Source 2005 Census by Department of Statistics
Malaysia
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Strategies Policies on SME Development
5 strategic thrusts for development of SMEs under
IMP3 (2006-2020)

• MEASURES
• Adoption and application of leading technologies,
  including effective utilization of ICT
• Closer collaboration with specialized Government
  research institutes and universities
• Enhancement of human capital of SMEs
• Nurturing innovative and resilient SMEs
• Acculturation of entrepreneurship innovation
• Creation of more conducive business environment,
  which stimulates vibrant and innovative
  entrepreneurial activities

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What is Incubator?
BUSINESS INCUBATION Business incubation is an
organization that helps entrepreneurs to develop
their ideas in a framework that has been
established to help them. It takes them
systematically from inception through to launch
and beyond. Incubators nurture young firms,
helping them to survive and grow during the
start-up period when they are most
vulnerable. TECHNOLOGY INCUBATION A
technology-incubating program is an innovative
system designed to assist entrepreneurs in the
development of new technology-based firms, both
start-ups and fledglings. It seeks to effectively
link talent, technology, capital and know-how to
leverage entrepreneurial talent in order to
accelerate development of new companies, and thus
speed the commercialization of technology Source
Ministry of Science, Technology and Innovation,
Malaysia
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Incubator Background
Source National Incubation Network Association
(NINA)
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Incubator in Malaysia
Source National Incubation Network Association
(NINA)
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EXAMPLE 1 SIRIM TECHNOLOGY INCUBATION
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SIRIM Berhad
Established in 1975 under Ministry of Science,
Technology Innovation
16th November 1995 Corporatized as a
government-owned company under the Ministry of
Finance Inc.
Broad range of services

• Research Technology
• RD
• Product Development
• Process Engineering
• Training Consultancy

• Design Engineering
• Product Development
• Engineering Services
• Plant Engineering
• Machinery Equipment

• Technology Transfer Hub
• Intellectual Property Centre
• Commercialization and Business Incubation Centre

• Standards Quality
• Measurement Calibration
• Legal Metrology Services
• Standards Management
• Standards Development

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SIRIM Incubator Model
Phase I Entrepreneur
Development Phase
Phase II Enterprise Creation
Phase
Phase III Market Development Phase
SIRIM Technology Incubator Program

• Skills Development

• Networking Linkages

• Facilities Services

• After-Care Service

• Technology Transfer Consultancy Services

• Advisory Services

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EXAMPLE 2 MTDC TECHNOLOGY CENTER
Malaysian Technology Development Corporation
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MTDC Technology Centre

• Initiative by Malaysian Technology Development
  Corporation (MTDC)
• Embodied under Governments Technology
  Development Cluster (TDC) program
• Formal and operational links (collaborations)
  with universities or research institutions.

• Main function
• Strengthen linkages between universities/research
  institutions and industries.
• Activate and promote the acceleration of the
  commercialisation activities of both the local
  universities and research institutions.

• Approached method
• Develop technology incubation centres via JV
  collaboration with Universities

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MTDC Technology Incubation Centres
Centres are developed based on strength of
respective universities through JV collaboration
UPM (Universiti Putra Malaysia)-MTDC Technology
Centre

• ICT, multimedia, agri-bio
• Located at UPM - central of Malaysia

UKM (Universiti Kebangsaan Malaysia)-MTDC
Technology Centre

• Biotechnology
• Located at UKM - central of Malaysia

UTM (Universiti Teknologi Malaysia)-MTDC
Technology Centre

• Advanced engineering, life sciences
• Located at UTM - southern Malaysia

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UPM-MTDC Technology Centre project

• Established 1996
• JV project between Universiti Putra
  Malaysia(UPM) - MTDC
• The first MTDC technology incubation centres
  established within Malaysian universities' campus
• Second area awarded with Cybercity status after
  Cyberjaya
• FACILITIES
• Covering total acreage of 167 acres
• Equipped with high speed bandwidth communication
  network
• Other facilities
• Server Farm (15 acres)
• International Technology Centre (50 acres)
• MTDC Technology Centre (15 acres)
• Data Centre
• Computer Recovery Centre

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UKM-MTDC Technology Centre project

• JV project between Universiti Kebangsaan
  Malaysia (UKM) - MTDC.
• Planned to attract companies mainly involved in
  biotechnology.
•  
• FACILITIES
• Covering total acreage of 6 acres
• Able to accommodate 12-15 tenants
• Conceptualized as Pusat Teknologi Pintar -
• Formal and operational links with university or
  research institutes
• To encourage growth of technology-based
  businesses that reside on site
• Management functions which actively engaged in
  transfer of technology and business skills to
  industries

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UTM-MTDC Technology Centre project

• Established in 2001
• JV project between Universiti Teknologi Malaysia
  (UTM) MTDC
• OBJECTIVE
• Mainly for companies involved in life sciences.
• Develop strong science and technology-based
• Increase capability to adopt, adapt and improve
  technologies through RD
• Develop pool of skilled researchers capable of
  handling new and emerging applied technologies.
• FACILITIES
• Covering total acreage of 4.3 acre
• Located within university (UTM) vicinity

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EXAMPLE 3 TECHNOLOGY PARK MALAYSIA
(TECHNOLOGY INNOVATION BUSINESS INCUBATION
PROGRAM)
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Technology Park Malaysia (TPM) TECHNOLOGY
INNOVATION BUSINESS INCUBATION PROGRAM

• Main function
• To spur development of innovative and
  knowledge-based companies

• Incubation program
• Caters specifically to fledgling technology and
  innovation-based enterprises.
• Prospects vary from graduates, researchers,
  start-up SMEs, professional employees
  subsidiary of MNCs GLCs.

• Incubation model

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Spectrum of Services 

• Network - Market linkages through incubation
  associations membership
• National Incubation Network Association (NINA)
• Asian Association of Business Incubation (AABI)
• Asia Pacific Incubation Network (APIN)
• Association of University Research Parks (AURP)

• Facilities - Support from TPM and subsidiaries
• TPM Engineering
• TPM IT
• TPM Biotech

Technology Experts - Advisory from researchers
and expert panel
Financial Assistance Access to funds by
Government/commercial banks, venture capital and
angels.
Handholding Integrated coaching, consultancy
and training by panel of coaches, consultants
trainers.
Land/ building lease
Cubicles
Office units
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EXAMPLE 4 SME BANK FACTORY COMPLEX
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SME BANK FACTORY COMPLEX

• Started in 1985
• Full support from Government
• Fund to build factories in each state in
  Malaysia.
• Initiated to encourage entrepreneurship in
  manufacturing and service sector
• Facilties
• 24 factories with 419 lots nationwide

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SME BANK INCUBATION MODEL
Integrated entrepreneurship development approach

• Participant selection by a Panel
• Project and concept development with advisory and
  approval from SME Bank
• Project is fulltime owned and run by participant
• Integrated financial assistance
• Incubation period 9 years

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SUCCESS INCUBATEES STORY

• REDtone International Berhad
• Incubatee of TPM
• Listed on MESDAQ (now known as ACE Market) in
  2004.
• MSC status company
• Products
• High speed Internet services
• Data solutions
• VoIP services
• Operating in Malaysia and China

• Green Packet Berhad
• Incubatee of TPM
• Listed on ACE Market in 2005
• Transfered to Main Board in 2007
• Products
• Personal Handy-Phone System
• 3G, WiFi and WiMAX space
• Operating in USA, Malaysia, Singapore, Taiwan,
  China, Bahrain and Thailand.

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SUCCESS INCUBATEES STORY (Contd)

• IRIS Corporation Berhad
• Incubatee of TPM
• Establsihed in 1994
• Listed on ACE Market in 2002
• Products
• Digital conference system
• Radio frequency identity system (RFID)
• Automated electronic ticketing and fare
  collection
• Payment cards
• Loyalty management program solution

• Tricubes Berhad
• Incubatee of TPM
• Established in 1998
• ICT company focusing in identity authentication
  and mobility solution
• Listed on Ace Market in 2004
• Products
• Smartcard
• Biometrics verification devices

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CLOSING REMARK
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RECOMMENDATION FOR SUCCESS OF INCUBATOR

• University involvement
• Success of incubator depends on availability of
  graduates, access to RD facilities, and
  environment of intellectual creativity
• 2. Collaboration networking
• Networking between industries, universities,
  research institutions and incubators provide
  mutual support encouragement
• Experienced incubator management
• To render continuous support, coaching,
  mentoring and motivation to start-up companies
• Conducive business environment
• Incubators to function not as landlord but to
  create conducive business environment to
  incubatees
• Linking business technology
• Constitute important channels for distribution
  of knowledge and tools for business success

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T
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SME Corporation Malaysia Level 20, West Wing,
Menara MATRADE Jalan Khidmat Usaha, Off Jalan
Duta 50480 Kuala Lumpur 03 6207 6000
03 6201 6564 www.smecorp.gov.my
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