Malaysia's electrical and electronics (E&E) industry has indeed been a cornerstone of Malaysia's economy for several decades, contributing significantly to the nation's economic growth. It is noted that the E&E industry is producing 13% of global back-end semiconductors, driving 40% of the nation’s export output and contributing about 5.8% to the GDP in 2023, higher than in 2022.

“Last year, E&E exports were RM456 billion, 37% of Malaysia’s total exports. The growth from 1972 to 2022 is a compounded annual growth rate of 16%.” said the International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali.

With ambitious targets set at RM120 billion by 2025 in GDP growth and RM495 billion in export earnings, the industry is a catalyst for Malaysia’s economic progress.

A Spectrum of Innovation: Subsectors of the E&E Industry

Among Malaysia's E&E subsectors, there is a diverse range of industries with unique opportunities for technopreneurs. Here's a glimpse into some key areas:

1. Semiconductors

A semiconductor is a substance that has specific electrical properties that enable it to serve as a foundation for computers and other electronic devices. Malaysia is a prominent player in the global semiconductor supply chain, which controls 13 percent of the global market for packaging, assembly, and testing services for semiconductors and is the world’s sixth-largest exporter of semiconductors. Innovation in this sector focuses on efficiency, miniaturisation, and resilience, as highlighted by the national call for a "Malaysia needs a resilient semiconductor supply chain" strategy.

MIMOS Bhd president and CEO Dr Iskandar Samad points to four domains in this industry that are seeing a surge of tech innovations: chip design, advanced packaging technology, automated test equipment, and wide bandgap semiconductors.

2. Electronics Manufacturing Services (EMS)

Electronics Manufacturing Services (EMS) providers are specialists in electronic manufacturing. This means that they have in-depth knowledge of the latest technologies, materials, and manufacturing processes. If you outsource your electronic manufacturing to an EMS you will probably benefit from more cost-efficiency than establishing and maintaining in-house facilities. Local technopreneurs can leverage their expertise to cater to emerging trends in areas like wearable technology and the Internet of Things (IoT).

3. Industrial Automation

This subsector deals with automating processes in manufacturing facilities. Industrial automation is the use of control systems, such as computers or robots, and information technologies for handling different processes and machinery in an industry to replace a human being. It has recently found more acceptance from various industries because of its huge benefits, such as increased productivity, quality, and safety at low costs.

Challenges and Opportunities: The Technopreneur's Landscape

Behind the glamour and potential rewards lie numerous challenges that Malaysian E&E SMEs must overcome on their journey to building a successful technology product company. Attracting and retaining skilled talent is a major hurdle. Additionally, technology changes in the blink of an eye. It experienced significant growth in a short period of time. Typically, technopreneurs often have to bear with setbacks or losses that are excessive, but with the right strategies and a relentless pursuit of excellence, technopreneurs can overcome these obstacles that can reshape the business landscape.

Success Stories: Malaysian Technopreneurs Leading the Charge

Several Malaysian E&E SMEs have overcome these challenges and emerged as successful innovators. Although trailing the success of major tech companies in the United States, Malaysia is home to several local apps and online commerce sites that are gaining momentum in the region. Recently listed in Malaysia’s 50 Richest by Forbes Magazine at 39th place, Patrick Grove is the co-founder and CEO of Catcha Group and his latest business venture, iFlix, is a strong competitor to the video streaming service provider, Netflix. He is also the master developer of Kuala Lumpur Internet City, site of the private-public Digital Free Trade Zone. It is undeniable that Malaysia in particular, has tremendous potential to be the leader of the digital revolution in ASEAN.

Government Support: Empowering Innovation

The Malaysian government actively supports technology SMEs through various initiatives. Design, Develop, Test, and Manufacture—Multimedia Capability Advancement Division (DDTM-MCAD) is a programme that offers SMES in the electrical and electronics as well as the machine and equipment industries, a Solidworks CAD software licence and training on how to use it, for free.

It is an initiative by MIMOS Bhd and the Science, Technology, and Innovation Ministry (MOSTI) under the 12th Malaysia Plan, in collaboration with North Corridor Economic Region (NCER) Malaysia, Malaysia Productivity Corporation, Electrical and Electronics Productivity Nexus (EEPN), and Machinery and Equipment Productivity Nexus.

Market trends shaping the future

Continuous innovation is essential for the E&E sector to create new products and services, improve productivity, and enhance customer satisfaction. With an 18% growth in 2021 and a 30% growth in 2022, the E&E segment has been expanding significantly in recent years as Malaysia has successfully fostered an active ecosystem for E&E manufacturing, attracting substantial investments.

Malaysia’s vision for the E&E sector also emphasises the importance of fostering collaboration. Through strategies such as promoting R&D and supporting local startups and SMEs, technopreneurs can create an ecosystem that encourages developing and adopting cutting-edge technologies, inspires entrepreneurship, and strengthens global collaborations.

“The focus on accelerating the adoption and adaptation of advanced factory automation and digitalisation to transition existing operations into ‘smart factories’ has enhanced the flexibility of the industry to adapt to unforeseen challenges like the US-China trade tensions,” said the Malaysian Investment Development Authority (MIDA) deputy chief executive officer S. Sivasuriyamoorthy.

Taking the First Step: A Guide for Aspiring Technopreneurs

A technopreneur starts with nothing but a concept. They challenge ongoing practices and systems and think of doing things creatively. But how do you become a technopreneur? While there’s no exact blueprint for success, there are some telltale signs of a successful tech entrepreneur.

1. Full tech stack knowledge: While this can vary moderately based on the requirements of the startup, it usually means everything from a strong understanding of how the internet runs, to server technologies, scale factors, website knowledge, analytics, and code container administration — to name the primary points.

2. Intuition: A technopreneur should be able to intuitively imagine and harvest unseen opportunities in such situations where the rest of the world only sees obstacles.

3. Belief: Firmly believe in your product. Be very clear about what unmet need you are striving to address. And be ready to step into uncharted areas to bring your product to life.

4.Mentorship and support: Leverage government initiatives and collaborate with experienced professionals for guidance.

5. Decide and implement: If you implement your decision after a few months, it may be a wrong decision. Understand that when you decide, you have to implement it immediately.

Becoming a technopreneur demands constant dedication and hard work. Despite their qualities and abilities, what many ambitious technopreneurs hardly realise is that becoming a technopreneur is not an end. It is the beginning of an experience and a journey to savour and relish. With the right support and a relentless drive, you too can be a part of this exciting journey. Partner with OCBC Business Banking today and power up your E&E entrepreneurial dream.

Empowering Growth: OCBC Business Banking as Your Partner

In conclusion, as you consider the diverse and promising business landscape in Malaysia for 2024, OCBC Bank’s Business Banking solutions can support your entrepreneurial journey. Whether you're exploring business ideas, setting up the right entity, or securing your finances, OCBC Bank is your trusted partner for success in the dynamic Malaysian market. Explore the advantages of establishing a business account with OCBC Bank, ensuring not just transactions but a seamless and efficient approach to financial management. Get in touch with us so we can connect you with professionals who are ready to provide insights, advice, and support tailored to your specific business goals.