The business scaleup model is one that has proved effective countless times. The goals of the Malaysian government’s Founders Centre of Excellence (FOX) programme are similar to those of a private sector investment body but have as their core ethos the improved performance of a national economy, and specifically, in this case, the digital and technology space.

At Tech Wire Asia, we have been lucky enough to speak with two of Malaysia’s booming businesses in the programme. The companies received help, guidance, and resources offered through the Malaysia Digital Economy Corporation (MDEC) and are thriving today.

MDEC is an agency operating under the purview of the Ministry of Digital, charged with leading Malaysia’s digital economy forward. With the Malaysia Digital (MD) national strategic initiative and its catalytic programmes, also known as PeMangkinMD, MDEC seeks to transform the nation’s digital capabilities, fostering the growth of local tech companies and driving digital adoption.

Sophic Automation, (a subsidiary of 3REN Berhad) was founded as a partnership between Lee Chee Hoo and Koh Dim Kuan, AKA ‘DK’. DK took time out to share with us how the company has grown since its inception in 2007 and the ways in which MDEC’s Malaysia Digital (MD) initiative and Founders Center of Excellence (FOX) have paved the way for the business to effectively establish itself as a provider of integrated automation, digitalisation solutions and engineering services.

“Thanks to MDEC and the positive outlook in the semiconductor market, we’re now strategically positioned to benefit from the more widespread adoption of emerging technology such as AI, IoT, 5G and EV [artificial intelligence, the internet of things, 5G wireless and electric vehicles]. We’re aiming for [BURSA Stock Exchange] listing by this year to grow and capitalise these market opportunities,” DK said. ”MDEC is very eager to help and assist.”

That, too, has been the experience of Datuk Alan See, the co-founder of Firmus, whose early challenges included attracting talent to the growing cybersecurity company. As the business gained a reputation in the country and across the region, he found that instead of losing staff to the ‘big four’ and multinational corporations (MNCs), he retained them. That was reflected in Firmus winning the Human Resource Development Corporation’s Best Employer Award in 2023 in the Small Medium Enterprise (SME) Employers category.

The help available from MDEC is designed to facilitate changes specifically required by the growing business, whether or not those requirements are technological. Often, what the entrepreneur needs might seem mundane but is actually crucial for business growth, such as improving human resource (HR) processes, getting financial filing advice, or developing a robust export strategy.

“They provided great assistance in facilitating our pioneer status applications in the early years. We also secured some development grants. It is a great agency that has helped and guided us in our research processes,” DK said.

Firmus approached MDEC without needing specific financial support. In its 16-year history, the cybersecurity business has been entirely funded by its existing shareholders. “Thanks to MDEC’s FOX programme, we’ve gained access to a wealth of regional business expansion opportunities, business matching services and valuable business coaching. Our vision is to grow into a MYR 100 million revenue company within the next two years. We are considering options such as going public through an initial public offering (IPO) or exploring potential mergers and acquisitions.”

MDEC’s FOX programme methods reflect a community-based approach to improvements that benefit all and thereby bring positives to the larger economy. “The government is also interested in assisting with an innovation-based approach, and it knew where Sophic wanted to develop. MDEC’s strategy is create wins for the entire ecosystem. I believe that is the perspective that comes strongly from the government.” DK said.

If we consider the financial sector’s well-being the bedrock of the local economy, it’s in the Malaysian government’s interest to ensure that the sector’s systems are run securely and with proper oversight of statutory governance. Sixty per cent of Firmus’ income comes from financial service institutions, protecting them with technologies that enable data loss prevention, governance risk and compliance, endpoint protection, and PAM (privileged access management) facilities. It also offers cybersecurity services like penetration testing, compromise assessment, incident management, tabletop cyber-drill exercises, Bank Negara Malaysia Risk Management in Technology (BNM RMIT) compliance and ISO 27001 Information Security Management System (ISMS) consulting, to name a few elements of its portfolio.

Sophic, in turn, develops strategies for customers in different stages of their industrial automation journeys. Some are larger concerns that wish to extend existing systems, while others’ operations are still very much manual. Sophic works in all areas of industrial system design and automation, from back-office software to shop floor robots to equipping staff with wearable technology that makes the workplace safer and more efficient.

“Most of our customers have already established certain automation systems, for sure. They come to us with problems they want solutions for, particularly in enabling automation and digitalisation in their overall operations. Some customers come with specific needs, such as those in the medical devices sector, and we also have semiconductor customers. It’s still up to us to propose a sensible solution to solve their problems,” DK told us.

Both companies are achieving significant growth and have evolving strategies to keep that momentum. Adaptability and speed of change are keys to success, according to Datuk Alan See. “Entrepreneurship is a journey filled with ups and downs. Be prepared to pivot your idea, adapt to changing market conditions, and learn from failures,” he said. “Flexibility and the ability to iterate on your ideas based on feedback and new information are essential for long-term success.”

As is the case in many stories about the information technology (IT) sector at present, the growing role of AI will have more effect on every workplace. Working out how the technology will be best implemented in each case is not just complex, but there’s a sense of sudden forward momentum as companies vie for competitive advantage. DK says, “There are more digital solutions available now with AI implementation. In fact, AI will create more urgency for all companies’ operations to boost their efficiency and improve their overall business competitiveness.”

The potentially exponential changes that technologies like machine learning are going to bring mean that technology-first companies like Firmus and Sophic will be there to enable and support business growth in the foreseeable future. To ensure that business leaders remain adaptive and can progress in a rapidly changing world, it’s important to keep both minds and ears open, Datuk Alan See told us:

“Surround yourself with supportive mentors, advisors like MDEC and peers who can provide guidance, feedback, and support. Networking within your industry can open doors to new opportunities, partnerships, and resources. Don’t hesitate to seek advice from experienced entrepreneurs who have been through similar challenges.”

For these two companies, the support offered by MDEC’s FOX programme has been pivotal, helping them develop better business practices and drive growth as the region continues its digitalisation journey.