How Malaysia’s co-working spaces can become more than just ‘spaces’

How Malaysia’s co-working spaces can become more than just ‘spaces’

In the face of changing user needs, co-working spaces will need to play a bigger role in the country’s startup ecosystem

When a startup begins seeking out an office of their own, their first port of call nowadays is often a co-working space. Known for the flexibility, convenience, and resources that they provide to businesses, co-working spaces are on the rise all over the world – especially in Malaysia.

According to real estate consultancy firm Knight Frank Malaysia, the number of co-working spaces in the Klang Valley alone has doubled from 2017, with 66 co-working operators across 160 spaces as of 2020.

It’s certainly an exciting time to be a player in the industry. The Covid-19 pandemic has led to a reimagining of what the modern workplace looks like, and even larger corporations are considering co-working spaces for the flexibility they offer.

However, the pandemic has put operators in a precarious position, as movement restrictions and shifts toward more hybrid working arrangements mean that it won’t be enough for co-working spaces to just be physical offices.

“Co-working spaces cannot remain as purely property projects,” says Yong Kai Ping, CEO of the Selangor Information Technology & Digital Economy Corporation (Sidec). “They need to offer a full package of ecosystem and community support [to attract startups].”

Many co-working spaces have begun branching out to different areas beyond their primary offering. Some organize community events, while others strike up deals with tech partners and vendors to benefit their members.

And for co-working spaces in Malaysia, they can also enhance their offerings through a program launched by the Malaysia Digital Economy Corporation (MDEC): the Malaysia Digital Hub (MDH) initiative.

Bringing together the elements for startup success

Launched in 2017, the MDH initiative aims to bring together all the key components and players required for startup growth in one place, with co-working spaces serving as the physical meeting point.

While co-working spaces are usually the focus of this program, the MDH initiative is open to any organization that provides physical amenities such as office space and internet connectivity, as well as more support and community-focused elements such as access to funding opportunities and tech partners.

Sidec, for one, has been certified as an MDH, running a co-working space along with its flagship incubator program. Forward School, an edtech firm based in Penang that offers founders a co-working space alongside its engineering and developer training programs, has received the certification as well.

“It has always been our mission to bridge the local tech talent gap, and we also work with key players in the tech industry and startups to help grow the ecosystem as a whole,” shares Howie Chang, Forward School’s co-founder and CEO. For him, getting an MDH certification felt like a natural step, as MDEC’s goals for the program aligned with Forward School’s own ambitions to foster Malaysian startup talent.

This was the case as well for Kuala Lumpur-based co-working space Common Ground. According to co-founder Juhn Teo, the co-working space was already certified as an MDH when it opened its first location in 2017.

“We built Common Ground with a vision of a digitized, dynamic community,” shares Teo. “We knew that we could not just provide a desk and Wi-Fi, and our true value would come in how we support businesses to do their best work – through providing access, networks, and the right environment.”

As such, acquiring MDH certification made sense for Common Ground. The co-working space has had several venture capital firms working out of its premises, providing founders in their spaces with access to funding opportunities literally next door. It also frequently organizes community events such as pitching sessions, fireside chats, and hackathons.

Being part of the ecosystem

Getting certified as an MDH is no easy endeavor, given the ecosystem of facilities and support that firms need to have in place to receive the certification. However, it appears to be worth the effort: being an MDH has proven to be a MDEC often features MDHs as part of the resources it offers to entrepreneurs, which means that having the certification allows these businesses to get greater exposure and reach out to more startups. Additionally, being an MDH enables these co-working spaces to work closely with MDEC on the different programs it offers.

For example, MDHs are a key part of the appeal behind MDEC’s Malaysia Tech Entrepreneur Programme (MTEP), which seeks to attract foreign tech talent and aspiring entrepreneurs to come to Malaysia.

The differentiating factor for these businesses

When an entrepreneur arrives in Malaysia as part of MTEP, they are often introduced to MDHs as a way for them to connect with relevant ecosystem players and build up their networks.

“What we offer to these foreign startups [and entrepreneurs] is fast access and quick connections to the local business community,” says Teo. “Once they join us as members, they in turn add fresh opportunities and spark technological pursuits within the existing community. This helps us become a magnet for startup and tech events and activities.”

Getting bigger and better

Being an MDH also offers businesses the opportunity to enhance the services they already provide, in collaboration with other partners in the MDEC ecosystem. The organization works closely with the MDHs in its network, putting together monthly programs to help them develop and grow further.

“[The MDH initiative] helps us to be better connected and in touch with the many programs coming out of MDEC, and to tap into a wider network of players in the sector and encourage collaboration,” says Chang.

For example, Sidec has been able to strike up partnerships with corporations such as Agrobank and Bank Islam to offer mentorship to startups that participate in its incubator program. Meanwhile, Common Ground has worked with Microsoft and HP to give its members special rates, and it is currently in talks with Microsoft to provide upskilling programs for its community.

And it’s not just co-working spaces that stand to gain from the MDH initiative. Plenty of startups have benefited from the way that MDHs have pooled together different resources, ideas, and people into one space.

Teo shares the example of OoGyaa, an e-scooter startup that operates out of one of Common Ground’s co-working spaces. The firm was able to connect with another Common Ground member whose services helped address its business needs. OoGyaa was also able to leverage Common Ground’s connections with tech partners, established via MDEC, to set up its payment processes efficiently and affordably.

More than just spaces

As MDEC doubles down on its ecosystem of support for startups in Malaysia, MDHs will continue to play a key role in driving the industry’s growth.

Currently, there are 10 co-working space operators that have received MDH certifications. These MDHs have over 22 locations throughout Malaysia. According to Gopi Ganesalingam, chief digital industry officer of MDEC’s tech ecosystems and globalization division, the MDH program has supported the growth of over 600 startup entrepreneurs to date. The program is also looking to expand its reach to co-working spaces in places like Sabah, Sarawak, Johor, and Malacca.

“What the pandemic has made abundantly clear is that the needs of the ecosystem continue to shift, and agility is key to success,” shares Ganesalingam. “MDEC’s MDH program reflects our dynamism in that it is no longer simply offering a physical space but one that enables exchange of ideas, learning, support and access – a holistic solution to grow and catalyze our ecosystem.”

Aside from bringing together the ingredients that will help a startup succeed into one location, MDHs also help build up and strengthen Malaysia’s startup community. They bring together like-minded individuals to spark new conversations and new ideas – and a new generation of Malaysian startups that can compete on the global stage.

MDEC is an agency under the Malaysian administration that aims to lead Malaysia’s digital economy forward.

Source:  Stefanie Yeo, TechinAsia. Photo credit: Common Ground


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