KUALA LUMPUR (June 13): The Securities Commission Malaysia (SC) has urged companies to adopt corporate venture capital (CVC) as an important strategic tool to keep pace with cutting-edge technology and stay ahead of competition in a dynamic world of corporate innovation.

Its chairman Datuk Seri Dr Awang Adek Hussin said the SC, via its affiliates, has conducted several CVC capacity-building programmes in the past two years, in addition to the government’s support of corporate ventures via attractive tax deductions for qualifying investments.

“While some companies that are already embracing this strategy have made progress in this area, we need to build a bridge for the majority that are just starting in the innovation journey, and those that have yet to obtain buy-in from their management and board to execute a CVC programme,” he said during the “Catalyst Series: Industry Dialogue on Corporate Innovation” event here on Thursday.

He noted that the SC received feedback, which highlighted the need to identify strategic partners to build a viable corporate innovation programme.

“Recognising this, today, we will take a step back and focus on the fundamentals of corporate innovation,” he said.

Awang Adek said corporates are crucial players in a vibrant startup ecosystem, and by investing in research and development or partnering with universities and startups, they can combine resources, market access, and established networks with the agility and fresh ideas of startups.

“Corporates can drive their innovation via the acquisition of startups, while facilitating exits for venture capital (VC) managers.

“This in turn enhances the vibrancy of our private markets and startup funding ecosystem,” he noted.

He said the SC’s efforts in promoting corporate innovation align with the broader strategy to develop a comprehensive market-based financing spectrum for corporates, and small and medium enterprises (SMEs).

“This supports the objectives of the KL20 Action Plan, which aims to position Kuala Lumpur as a top 20 global startup hubs,” he said.

In light of this, Awang Adek said that the SC conducted a corporate innovation survey as a “temperature check” on the state of corporate innovation among public-listed companies.

“The respondents of the survey represent approximately 36% of the FBM 100 Index’s market capitalisation. Among the key observations, 70% of the respondents believe [that] their company is reasonably well-prepared for innovation,” he added.

During the event, the SC launched its publication titled “Practical Guide on Venture Capital and Private Equity (PE) in Malaysia”, which aims to provide comprehensive practical knowledge to prospective VC and PE fund managers, service providers, and investors navigating Malaysia’s regulatory landscape for these sectors.