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Comment by Dokusō-tekina aidea on October 12, 2022 at 10:31am

Malaysia Textile Craft Industry: Innovation Inspired by Bamboo for Batik Block Contemporary Design

Block Batik in batik industry has been practised in Malaysia since 1920s. It also  known as “Batik Cop” or “Batik Terap”. The block for stamping or “Sarang Batik” normally made from steel with variety design on the surface of it. The beauty of the block batik pattern designs depend on the fineness and creativity of the motifs designed that engraved on the surface of the block by the expertise of the engraver. Therefore the objective of the study is to produce new design for block batik used from natural sources which is bamboo as a block to stamp the design for batik. The study emphasized on the uses of bamboo sticks cutted from bamboo tree sections as a block to create new geometric and spontaneous design for block batik design.

Bamboo is one of the tropical resources in Malaysia. The light weight of the bamboo sticks
alternatively can reduce the consequences towards the practitioners rather than using block made
from steel which is more heavy than bamboo. The structure on the bamboo vascular cross
sections scattered around the trunk create circular motif, dots and dotted lines. The uniqueness
of the motif and pattern using bamboo as a block depends on the creativity in manipulating the
structure of the bamboo with stamping techniques and the application of wax and the color
techniques.

A variety of designs such as overall repetition, vertical stripes and horizontal stripes
as well as color overlays and tones highlight the creativity of the batik design. Such designs can
be featured in the market especially for production of handicraft products, interior decoration and
clothing design. Therefore, this study significantly gives an ideas and inspiration for batik
entrepreneurs in producing block batik by using bamboo as new natural based batik design at a
lower-cost. （https://iopscience.iop.org/article/10.1088/1755-1315/549/1/012087）

Comment by Dokusō-tekina aidea on October 10, 2022 at 9:12pm

An Overview of the Book Printing and Publishing Industry in Malaysia

This paper focuses on the overview of the book printing and publishing industry in Malaysia. The book printing and publishing industry is facing challenges as the e-books are becoming increasingly significant to the young readers. Both e-books and digital printing have significant advantages in many aspects. The impacts of e-books and digital printing on the printing and publishing industry are also discussed. Issues which may encountered by book printers and publishers due to trend changes during the migration from print to electronic publishing are also addressed.

In book: International Colloquium of Art and Design Education Research (i-CADER 2014) (pp.551-557)

Comment by Dokusō-tekina aidea on October 10, 2022 at 7:34am

Malaysia Digital Economy Blueprint: MyDigital blueprint to drive Malaysia’s high-income nation aspirations

（Pathma Subramaniam / The Edge Malaysia / March 01, 2021 ）

BY the end of this decade, Malaysia will become a high-value-added economy and a net exporter of home-grown technologies and digital solutions, according to the road map set out in the Malaysia Digital Economy Blueprint.

“The role of digital technology is evident, especially since a year ago, following the outbreak of the Covid-19 pandemic, which has led to all countries facing difficult challenges to continue business as usual,” said Prime Minister Tan Sri Muhyiddin Yassin at the launch of the blueprint on Feb 19.

This is why mastery of digital technology is essential to elevating Malaysia’s economy, he said, emphasising its significance in driving new engines of economic growth.

 

The digital economy, which has been growing by leaps and bounds in recent months, is expected to make up 22.6% Malaysia’s gross domestic product (GDP) and create 500,000 jobs by 2025.

To achieve this, RM21 billion will be invested through the National Digital Network (Jendela) over the next five years; RM1.65 billion will be invested by telecommunications companies to strengthen connectivity to the international submarine cable network until 2023; RM15 billion will be invested to roll out 5G nationwide over a period of 10 years; and between RM12 billion and RM15 billion will be invested by cloud service provider (CSP) companies over the next five years.

Digital technology has been pivotal in overcoming the multitude of productivity restrictions during the coronavirus pandemic, said Muhyiddin.

 

The MyDIGITAL initiative sets out various measures and targets that will be implemented in three phases until 2030. The initiative, which includes the Malaysia Digital Economy Blueprint, complements national development policies such as the 12th Malaysia Plan (12MP) and the Vision for Shared Prosperity 2030 (WKB 2030), said the prime minister.

The digital economy is defined as economic activities that use digitised information and knowledge as key factors of production and connections among people, businesses, devices, data and processes.

“The digital wave continues to affect the global community, reaching a scale that has never been achieved before and has completely changed the lifestyles of communities all over the world.

 

“In the last five years alone, there have been endless changes in the way we interact with each other, the way we learn, the way business is run, and even the way we monitor our health — everything is very different and has changed because of technology,” Muhyiddin said.

Advanced technologies such as artificial intelligence (AI), the Internet of Things (IoT) or big data analytics and blockchain have changed the patterns of the world’s economy and the way of life of modern society, he added.

Apart from their sizeable contribution to GDP, the initiatives outlined in the blueprint are expected to propel 875,000 micro, small and medium enterprises to switch to e-commerce, attract two unicorns and catalyse the growth of 5,000 start-ups in the next five years.

 

“These initiatives will be the starting point to attract new investments worth RM70 billion in the digital sector, from within and outside the country. The government is also targeting for the level of productivity of the economic sector to increase by 30% more than what has been achieved today, by 2030.

“For the public sector, all agencies will provide cashless transaction facilities as the main option by 2022,” Muhyiddin said.

According to the Malaysia Digital Economy Corporation (MDEC), pure-play technology companies and digital services firms made RM5.99 billion worth of investments in the country last year.

 

New investments by pure-play technology companies stood at RM3.98 billion, while new investments by digital services companies amounted to RM2.01 billion. In total, these investments have created about 9,000 new jobs, said the agency.

So far, Malaysia has attracted some RM345 billion in digital investments, creating almost 185,000 jobs.

Amazon, Google, Microsoft and Telekom to build data centres

To accelerate innovation and create an effective digital ecosystem, however, four important types of digital infrastructure need to be built. The development efforts will be undertaken via a series of public-private partnerships, with the private sector contributing funds and expertise, said Muhyiddin.

“RM21 billion will be invested over the next five years through the Jendela project to strengthen the existing connectivity.

“This fixed-line fibre-optic network will cover almost 100% of populated areas in stages — from 7.5 million premises by end-2022 to nine million premises by end-2025. Based on this wider fibre-optic network coverage, this country will be better prepared to switch to fifth-generation cellular networking technology (5G) in the near future,” he said.

 

Jendela, which is part of the 12th Malaysia Plan (2021 to 2025), is aimed at improving the country’s digital infrastructure transition towards 5G technology and the timely delivery of ubiquitous high-quality broadband services at reasonable rates.

Moreover, telecommunications companies will be investing RM1.65 billion to improve connectivity to the international submarine cable network until 2023 to unlock more space for faster and more stable international data transfer, thus lowering internet costs, he said.

The RM15 billion investment — which will be carried out by a special-purpose vehicle under the government — for the nationwide rollout of 5G over 10 years is expected to generate 105,000 job opportunities.

 

This entity will then be given the appropriate spectrum to own, implement and manage the 5G infrastructure, the PM added.

He gave the assurance that all licensed telecommunications companies would have equal access to market their 5G services to customers.

“This infrastructure cost-sharing enables telecommunications companies to generate higher returns and, in turn, provide better and cheaper 5G services to consumers. This will boost the use of 5G and thus enhance economic capability in triggering more product and service innovations.

 

“So, by the end of this year, the people will start to enjoy 5G technology in stages. With this, Malaysia will emerge as one of the first countries in this region to build a 5G ecosystem using internet and cloud services in real time to enable instant sharing of information.

“5G technology not only promises better and faster internet access but, more importantly, enables various important applications to be in the hands of end-users, including health monitoring applications for chronic patients, smart emergency assistance, and special applications for senior citizens who are living alone,” said Muhyiddin.

As data centres will be at the heart of enabling 5G in all applications for the foreseeable future, hyperscale hybrid data centres will also be built to increase data storage, reduce operating costs and improve analytical efficiency.

 

Amazon, Google, Microsoft — which collectively account for more than half of the world’s largest data centres — and Telekom Malaysia have been selected to take the lead in building and managing the much-in-demand infrastructure for cloud services.

The government is also proposing the appointment of three local IT companies — Enfrasys Solution Sdn Bhd, Prestariang Systems Sdn Bhd and Cloud Connect Sdn Bhd — as managed service providers to work with CSPs to manage their services to public agencies.

“This is in line with our intentions to strengthen the capabilities of local companies,” said Muhyiddin.

Public data to move to hybrid cloud systems

As part of measures to strengthen the public sector’s cloud computing services, the PM said, the government through its “Cloud First” strategy aims to migrate 80% of public data to hybrid cloud systems by end-2022.

“In addition, for more effective and smooth data collection and management, this strategy helps reduce government costs in IT management in the long run. All these cloud services will allow big data, AI, IoT and other applications to be used to enhance and strengthen government services,” he said.

Muhyiddin emphasised that a robust digital infrastructure is the backbone for a sustainable digital ecosystem, which serves as the key engine of growth towards a sustainable economy.

 

The government will continue to strengthen the new ecosystem by creating a regulatory environment that is supportive of the digital economy while protecting the privacy of citizens; administering public data resources so that they can be jointly utilised by public and private organisations; and facilitating the evolution of labour market in potentially disruptive industries through automation and digital technology.

“We will ensure that digital companies involved with the government will work hard to help Malaysians improve on their digital skills. These companies, among others, will also collaborate with local universities to establish the Faculty of Artificial Intelligence, and to work with the government to carry out employees’ skills improvement programmes.

“Cyber and data security are the cornerstones in realising the vision for a digital technology nation. Therefore, public data will be handled with care based on security standards set by the government through the implementing agency, the National Cyber Security Agency,” he said.

 

The MyDIGITAL initiative through the Malaysia Digital Economy Blueprint is to be implemented throughout the nation and all stakeholders need to adapt as soon as possible to face the challenges, said Muhyiddin.

According to Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed, the digital economy’s contribution to the GDP increased from 13% in 2010 to 19.1% in 2019.

In his opening remarks, Mustapa said this correlated with the significant increase in the use of the internet by individuals from 57% in 2013 to 84.2% in 2019.

 

Mustapa said the low quality and coverage of broadband services, incomplete digital infrastructure and insufficient number of digitally skilled workers are challenges that need to be overcome to raise the country’s digital proposition.

The blueprint outlines 22 strategies, comprising 48 national initiatives and 28 sectoral initiatives. It will be implemented over 10 years — from 2021 to 2030 — and divided into three phases. The first phase, from 2021 to 2022, involves reinforcing the foundations and accelerating digitalisation.

The second phase, from 2023 to 2025, will focus on driving inclusive digital transformation. In the final phase, from 2026 to 2030, Malaysia is envisioned to become a regional market for digital products and digital solutions providers.

Comment by Dokusō-tekina aidea on October 9, 2022 at 9:34am

Budget 2023: Supports sustainability of tourism, arts, culture

KUALA LUMPUR: The RM1.16 billion allocation in the 2023 Budget for management and development of the tourism, art and culture sectors reflected the government's continuous post-pandemic efforts to restore and strengthen the country’s economy carried out since 2021.

The Ministry of Tourism, Arts and Culture (Motac), in a statement today, described the budget as a sign of the government's continued support and commitment to make the local tourism, arts and culture industry strong again.

“The government’s commitment is clear in ensuring that the national economic growth agenda continues to be given focus to empower the industry and businesses continue to be supported in this phase of recovery and growth.

“Motac will refine allocations that involve tourism and culture, and is ready to seize opportunities available to develop the sector which is closely related to the Shared Prosperity Vision 2030 and the Sustainable Development Goals,“ it said.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz , when tabling Budget 2023 yesterday, announced an allocation of RM200 million to strengthen the recovery of the tourism sector with incentives, promotion and marketing incentives, as well as RM90 million as matching grants, such as the Tourism Promotion Matching Grant (Gamelan), which involves promotion and marketing campaigns with the industry.

Apart from that, the government is allocating RM25 million to provide incentives to the people in the form of discounts, vouchers and rebates for accommodation, tourism packages, handicrafts, and works of arts up to RM100; RM25 million for programmes to popularise arts, culture and heritage and 100 per cent tax exemption on statutory income for foreign and local tourists.

Other funds proposed in the 2023 Budget involved are the RM500 million in Bank Negara Malaysia's Tourism Financing (PTF) with an increase of financing size from RM300,000 to RM500,000; tourism infrastructure financing fund amounting to RM1 billion to strengthen the momentum of the recovery of the tourism sector, as well as the allocation of RM10 million through ThinkCity to further transform Kuala Lumpur City centre into a creative and cultural hub.

Tourism, Arts and Culture Minister Datuk Seri Nancy Shukri, in the same statement, said Motac would continue to take appropriate measures to protect and prepare the country for the effects of global development.

“Motac welcomes and expresses its gratitude to the government under the leadership of Datuk Seri Ismail Sabri Yaakob for the announcement of a high-impact budget, l which is responsive, responsible and reformist,” she said. -Bernama (The Sun Daily, Sunday, 09 Oct 2022)

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Comment by Dokusō-tekina aidea on October 8, 2022 at 8:28pm

Budget 2023: Govt allocates over RM100 mln to drive local creative industry

KUALA LUMPUR, Oct 7 — The government has allocated over RM100 million to drive the local creative industry next year through the Nationhood Film Production Fund (Dekan) and the Digital Content Fund.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz when tabling the Supply Bill 2023 in the Dewan Rakyat today said the government had allocated RM50 million for DEKAN and RM102 million for the Digital Content Fund.

“The government provides a Digital Content Fund to market the products of artists and encourage the production of more creative and fresh works,” he said.

To support industry players producing creative content, he said contributions to the Film Community and Nationhood Film Development Fund under the National Film Development Corporation of Malaysia (Finas) would be given tax deductions.

“The government has also agreed to exempt import duty and sales tax on studio equipment and filming productions,” Tengku Zafrul said.

He added the government would step up efforts to promote and preserve art, culture and heritage at the grassroots level with an allocation of RM25 million.

In the meantime, Tengku Zafrul said the government would implement three initiatives to encourage the production and purchase of local goods and services next year.

The first initiative is to intensify digitalisation and automation efforts, including through the promotion of e-commerce activities under the Malaysia External Trade Development Corporation (Matrade), Majlis Amanah Rakyat (Mara) and the Malaysia Digital Economy Corporation (MDEC).

He said up to RM15 million would be allocated to empower franchise entrepreneurs under the vendor capacity development programme 2.0 as well as vendor research and commercialisation grants 2.0.

In addition, Tengku Zafrul said the government would provide RM10 million to encourage the purchase of locally made products through the Buy Malaysian Made Products Campaign. — Bernama

（October 7, 2022 https://www.thestar.com.my）

Comment by Dokusō-tekina aidea on October 8, 2022 at 10:24am

Further Reading > Dasar Industri Kreatif Negara

Govt Urged To Increase Fund For Creative Industry In Budget 2023

After two years of inactivity, the creative industry got a shot in the arm last year when a total of RM288 million was allocated for the industry under Budget 2022.

Government agencies such as the National Film Development Corp Malaysia, Cultural Economy Development Agency (Cendana) and MyCreative Ventures were tasked to further invigorate existing initiatives such as the digital content grant, multimedia digital content and film incentives.

According to a study conducted by Cendana in mid-2021, more than 90% of the arts and culture practitioners were negatively impacted, 77% having lost most or all of their income, 75% of the jobs dried up in the market and 8% of arts venues closed permanently.

 

Under the upcoming Budget 2023, industry players are hoping for the incentives to be maintained or strengthened to help arts and culture practitioners continue to improve their livelihoods.

One of the funding under Budget 2022 was the RM50 million Tourism, Arts and Culture Matching Grant. 

Menara Network Sdn Bhd COO Aman Ali said this was a boon to the industry, especially event organisers and venues, as it helps support the recovery of the players.

Menara Network is the organiser of the upcoming “Rock On 40: The Legends” concert.

He said the effects can be seen by the mushrooming of events this year, featuring both local and internationals artistes such as Aishah, Anuar Zain, Ziana Zain, Billie Eilish, Rain, Justin Bieber, LANY, Dewa 19 and more.

A few popular venues such as Istana Budaya and Zepp Kuala Lumpur are also said to be fully booked for the rest of this year and into the new year.

Aman said he would like to see the matching grant extended as the cut-off period under Budget 2022 is Oct 31, 2022.

“You can see there have been a lots of shows and events this year and November and December are usually even busier. However, if the grant is not extended, the year-end shows won’t be covered by the grant.

“I’m hoping that they will extend the matching grant for another year. In fact, the budget for the grant can be increased as events such as live concerts at stadiums would have multiplier effects beyond the concert itself.” 

The former head of talent at Maestro Talent and Management Sdn Bhd wants the government to think of a way to help support lesser-known or up and coming artistes and art practitioners such as textile weavers.

He said popular artistes with millions of fans don’t need much help as promoters and concert organisers will pick them to ensure brisk ticket sales.

“It’s the lesser-known creative players and behind-the-scene workers such as cameramen and script-writers that are lacking access or channels to earn a living that need government help.”

Aman said the government should also find ways to support social media influencers that help promote the local arts and culture industry. A programme for millennials, the next generation of artistes would be most welcomed.

Zhan Art | Space co-founder Desmond Tan would definitely love to see more of a push for contemporary art by the government and its related agencies.

The government and to some extent, the industry, the art gallery owner said, has been pushing the more traditional art setting, ie preserving heritage and boosting cultural traditions.

“(We) need to modernise and push art forward. Perhaps a more contemporary younger art scene, graffiti/collaborations/cross-industry arts.”

The future for the creative industry certainly seems bright going into 2023, with many shows planned.

Menara Network’s Aman said 2022 is the year that the industry started to breathe again, while 2023 would be when it steps up towards full recovery. While it would be nice to achieve pre-pandemic level of activities next year, he would be happy to be able to reach 80%.

Menara Network, the company is planning to extend its “Rock On 40: The Legends” concert on Dec 2-3 for another night. Due to encouraging response, it’s planning to hold “Rock On 40: Search” on Sunday, Dec 4.

“Currently, we’re doing a lot of planning for next year. We’re aiming to bring the ‘Rock on 40’ concert tour to Penang, Johor Baru, Langkawi, Kuching and Kota Kinabalu, among others.”

--THE MALAYSIAN RESERVE

Comment by Dokusō-tekina aidea on October 1, 2022 at 4:17pm

The Gap in the Creative Industry Ecosystem of Malaysia

Chapter 3 of Fuelling the Kreativ Malaysia

The very nature of a creative business is intangible. They have plenty of intangible assets called Intellectual Properties (IP). IPs can be valued. There are specialised valuers who can value IPs. However, the banks (in Malaysia) is still not confident in accepting the valuation done on IPs. It was said that the valuations are often too astronomical.

THE MALAYSIAN CREATIVE ECONOMY consists of many sub-sectors. The Malaysian Dasar Industri Kreatif Negara (DIKN), or in English, The Malaysian National Creative Industry Policies, had identified an exhaustive list of creative offerings, for which, if grouped into smaller groups, can be allocated into ten main categories. They are Visual Arts, Performing Arts, Music, Literature, Film/TV/Gaming Content, Fashion & Design, Traditional & Cultural Arts, Creative Education, Creative Technologies and Culinary Arts. Each one of these sectors has their own behaviours, issues, mechanisms and require tailored approach for its nurturing.

To begin with, the overarching philosophy for any sector to grow is “to embrace creativity in a sustainable manner that ensures both economic and societal benefits”. The key words here are Creativity, Sustainability and Benefits. Creativity is what we, Malaysians, have in abundance. What we ought to figure out is how do we make these sectors into sustainable economies. Sustainable must mean that whoever are the participants, they will get sufficient rewards, monetary rewards. Without monetary rewards, the word “Economy” becomes irrelevant to this discussion. As further extension to the quest to make money, we also have the duty to ensure that our creative offerings do not cause harm to the society as a whole. Therefore, ripping the rewards must be balanced with societal benefits, which may not necessarily be in monetary terms.

As previously announced by many parties, the size of our Creative Industry can be approximately measured at a contribution of 1.6% to the Gross Domestic Product of the country (Malaysia) – 2014 statistic. There is a lot to catch up when we see our neighbouring countries showing 5% to 7%. Surely there must be something that can be done to jump start that 1.6% into a more dignified number. So what does the Malaysian Creative Industry need? Through various discussions and research by various agencies, there are a few key aspects of the industry that have been identified as the core needs of the Creative Industry. These areas need attention in order to break free from a stagnant or worse, deteriorating state of the industry.

The critical areas are: 1. Capital injection for economic growth; 2. Wide spreading of sales and marketing channels; and 3. Infrastructure enhancement for development, production and distribution activities. At this juncture, it is wise to contain the discussion at No. 1, which is the capital required. Once we have produced enough entrepreneurs, items 2 and 3 will be considered quite naturally as an organic growth to the industry (hopefully). So, the main gap is “Financing”.

Capital injection requires a pool of financial sources. It is the fuel to the economy. The main sources of funds are typically Government grants, private money, banks and equity investors. As we all know, not many creative practitioners have their own private money to fund their creative operations. Only a few like David Teoh or Dato’ Yusuf Haslam, who have accumulated enough wealth to fund their own movies. Others do not have such wealth. Just like many other entrepreneurs such as restaurant owners, plantation owners, retail shop owners and many more, entrepreneurs in the Creative Industry also want to depend on loans from the banks. Sadly, given the uncertainty in the revenue potential for Creative Industry, the banks shy away. The banks are allergic to high risks. Creative Industry is the epitome high risk industry.

If the banks are not willing to take such risk, surely there are other investors who have bigger risk appetite. The Venture Capitalists (VC) and the Private Equity (PE) investors generally take higher risk than the bankers. They go for green field businesses exploring new technologies. They have an expectation of 20% or more Return on Investment (ROI) per annum. Can the Creative Industry entrepreneurs promise that? With such high expectation, no wonder the Creative entrepreneurs discounted seeing those investors. For the same reason, the investors shy away (as well) joining their banker counterpart. It will take a while before those VCs and PEs can match their cousins in Hollywood who have for decades funded not only individual movies, but slate of movies on a portfolio basis.

In the end, everybody in the industry put their utmost reliance on the Government. Everybody wants grants. They want free money. They want subsidies. If not subsidised funds, at least subsidised interest rates. Many grants have been made available for the Creative Industry which includes, but not limited to agencies such as Filem Nasional (FINAS), Malaysian Communications and Multimedia Commission (MCMC), Cradle Funds (Cradle), Malaysian Digital Economy Corporation (MDeC or formerly known as Multimedia Development Corporation) and Matrade. Under the DIKN, the Malaysian Government allocated RM200 million funds to Bank Simpanan Nasional (BSN) as a means to provide loans with subsidised interest rates to the Creative Industry entrepreneurs. For a few years the industry enjoyed loans at interest rates as low as 2% to 4%. This was a great help to the industry. Loads of submissions from the entrepreneurs of the Creative Industry had flooded in. Who wouldn’t? It’s cheap financing!

Whilst the administrator of those loans was BSN, the decision making process was pretty much under the DIKN Committee led by the Secretary General for the then Ministry of Communications and Culture. Subsequent to the General Elections in 2013, the Ministry was split into two. They are the Ministry of Communication and Multimedia (KKMM) and the Ministry of Tourism and Culture (MOTAC). As a result, the industry was split into two whereby fine arts, performing arts and crafts were parked under MOTAC and the remaining which has digital inclination such as TV, filming, music and publication were parked under KKMM.

Such split had eliminated the nucleus of decision making and had led to the demise of the DIKN movement. Consequently, BSN, who has now inherited the loan portfolio of RM200 million has reverted to the banking procedures of recovering those funds. When this happened, many non-performing loans (NPLs) were triggered. Meanwhile, under the 2012 Federal Government budget, another RM200 million was allocated for the Creative Industry under a VC named, MyCreative Ventures (MyCreative).

A study was done to learn and unlearn from the BSN/DIKN experience. A few important salient points were noted and were addressed in the DNA of the new entity, MyCreative. Firstly, it was decided that there were already enough Government agencies providing grants, and hence, MyCreative is to avoid such practice.

Secondly, the Federal Budget has taken a new direction (as apparent in the budgets for 2013, 2014, 2015, 2016 and 2017 as well) where Government subsidies are to be curtailed. Oil subsidy was cut. Sugar subsidy was cut. Many other subsidies were cut. So was interest rates subsidy for the Creative Industry loans. No more 2% to 4% is made available. Instead, as benchmarked to the Base Lending Rate (BLR) in 2012/2013, MyCreative provides loans at the range of 6% to 8% interest rate determinable by the risk assessment of individual applicants.

Thirdly, a more robust approach was needed to filter out those who are not serious in doing business. This is a very sensitive matter to begin with. How do you accuse someone of not being serious in his or her business? There was a joke that circulated the industry in respect of this. The term “Grantreprenuer” was introduced amongst the Government agencies to categorise those whose cash flow is heavily dependent on Government financial aid such as grants and cheap loans, or worse, loans with zero repayments.

A more tactical approach was required. After so many studies and deliberation, it was concluded that MyCreative was not to fund projects but instead, it is to fund businesses as a whole with a horizon of 5 years cash flow projection to frame an entirety approach to a business. In short, they wanted a 5 years business plan.

Effectively, instead of project basis, it became slates of project basis. A truly VC or PE approach has now taken place whereby, like many asset managers, the business performance is now a composite of the result of many projects. This reduces risk and uncertainty. – hence, eliminates “Grantrepreneurs”

Those three points form the basic principles to which MyCreative was to shape the new breed of entrepreneurs in the Creative Industry. Is it the right model? Nobody knew (at that time), but now, 5 years later, MyCreative reported an NPL rate of only 0.7% for its financial year ended 31 December 2016. Something must have been right. No one claimed that the model is the best model but so far, it is a model worth working on and to be refined further. There has been many talks between the Government agencies where all the different funding formats ranging from grants to cheap loans, commercial loans and equity financing should be arranged accordingly to match the different phases of the Creative Industry businesses. This is on-going.

It is also worth mentioning what it meant by VC approach as taken by MyCreative. To avoid any confusion, MyCreative is not a pure VC. Although it was intended to be one as initially suggested by the Government, it has since evolved to be a Debt Venture (DV) with a view to recover the principal loan amount in 5 years and with interest rates of 6% to 8% per annum. The recovered funds are to be made available to the industry – a revolving fund per se. Why has it evolved into a DV instead of a VC injecting equity funding into the creative companies? Well, the answer is simple – nobody wanted new shareholders to encroach into their ownership structure. They just wanted a loan, a simple loan from the banks.

Whilst the financing format was a DV, MyCreative continues to behave like a VC where they monitor their clients as if those companies are their investees rather than just borrowers. This is also why a business financing approach was taken rather than project financing. Another point worth mentioning is the collateral required. The Banks will require some sort of tangible asset collateral that is flanked by debentures and guarantees. Realising that the Creative Industry is heavily backed by intangible assets, i.e. Intellectual Properties (IP), MyCreative has discarded collateral to be a compulsory requirement and has instead only limited minimum security requirements to include guarantees and debentures, and if appropriate, assignment of accounts or assignment of sales proceeds. This certainly helped many companies to receive loans when they were denied previously by the banks solely because there weren’t any physical tangible assets to be collateralised.

Going back to the different phases of the state of the companies in the Creative Industry, there were also a lot of confusion on which Government agency provides which offerings. Some came to MyCreative to apply for grants – clearly the case of ordering a Big Mac at KFC, I must say. For startups, the best method of Government aid should be grants. As mentioned earlier, FINAS, MCMC, MDeC and Cradle are the main agencies that disburse grants to the Creative Industry. Once the companies are seeded by those grants, they should approach VCs to commercialise their offerings further. A Government VC that is known to have invested in the Creative Industry is Malaysian Venture Capital Corporation (MAVCAP). Then there were loans to be procured by the more matured companies. For this, they should approach MyCreative or Malaysian Debt Venture (MDV) or SME bank.

The ultimate source of funding is from the public, either from an initial public listing (IPO) or issuance of bonds. This status, not many creative companies have reached or can reach. To name a few that has: Astro, Media Prima and the newspaper companies. Many aspire to be listed companies but many also realise the complication of being a publicly listed company. They prefer to remain as proprietary limited companies.

The investing fraternity refers to the risk of dying ideas as the Valley of Death. Companies that have great ideas but are unable to raise funds will see those ideas die away – hence, the Valley of Death. This is very morbid. A more positive and entrepreneurial approach was taken by MyCreative. When you flip a valley upside down, you will get a dome shape – the Dome of Hope.

On the right curve of the dome (representing the right brain of the creative people), the entrepreneurs go through a series of process that move initial ideas to drawing board. Then those ideas are translated into creative offerings. That offerings are wrapped with some brand establishment with the end game of creating wealth. On the left curve of the dome (representing the structured business acumen requirement of a business) the funders/investors are supposed to guide the entrepreneurs through a series of serious considerations that include market assessment, business modelling, funding structure, business continuity and finally economic value creation. This Dome of Hope provides the basic structure for the entrepreneurial spirit that was applied when nurturing the creative companies.

Let us now talk about the ROI. We have earlier established that the creative business must behave like any other industry where it must be financially rewarded. What is the quantum of that reward that is acceptable? If your creative business only gives you an ROI of 3% per annum or lower, you are basically plain stupid. Why? Well, you could have earned the same ROI by putting your money into a fixed deposit at the banks without any effort. If you are facing this, you might as well earn salary and work with other companies that are having fantastic ROI. If you can earn ROI of 7% per annum from your business, again, you may be wasting your time. Why? Well, you can earn 7% per annum by investing in unit trusts. Perhaps an ROI of higher than 10% per annum would be justifiable for a business? If benchmarked to the expectations of the VCs and the PEs, the minimum should be 20% per annum. As you can see, the output must always be significantly bigger than the input.

Having said all that, it is unfair to have an expectation of an ROI that is higher than 10% per annum for a start up company. This is understandable. However, the entrepreneurs must demonstrate the potential of achieving a “hockey stick” effect moving the company from a loss making one to that envisioned ROI of higher than 10% per annum within an acceptable limit. What is an acceptable limit? Many investors like to see their targets being reached within a period of 5 years. Many are not sure why 5 and not 6 or 7 or 8. What we do know is that merchant bankers, accountants and valuers have always been using 5 years as the fair period for a company to turn around into an acceptable level of profit generation. Nowadays, the VCs and PEs have adjusted their expectation from 5 years to 7 years to 10 years before they start exiting to close any particular fund for profit distribution.

When an investor assess a particular business, they associate their expectations to the risks of the businesses. The higher the risks involved, the higher will the ROI expectation be. The risk of putting money into a fixed deposit is so much lower than investing in a creative business. Therefore, the ROI for fixed deposit should be lower than investing in a creative business. So if you propose an ROI of 3% for your business, your proposal will naturally get thrown out of the window. An investor can earn that 3% by putting his or her money in a fixed deposit. Similar conclusion can be arrived at when considering 7% ROI from Unit Trusts versus investing into a creative business.

As you can see, this is not rocket science. You do not need a Bachelors Degree in Banking and Finance. You just have to use logic and put yourself in the investors’ shoes. Perhaps talking to a friend with financial background is a good idea before you present to a panel of potential investors. In a nut shell, there is a formula that can be used to anticipate what the investors are looking for. The analysts at MyCreative uses a model called The 5C representing the 5 components of their risk assessment consisting Character, Cash Flows, Collateral, Condition and Capital.

The “Character” of the potential investees or the Promotees has many aspects. The most important one is the Credit Strength. If you have issues with your existing loans, many banks will shy away. The infamous CCRISS Report and CTOS Report that have details of a person’s credit background is a powerful tool to both give confidence to the investors as well as destroy that confidence depending on what your existing loan repayment behaviour is. The banks will generally reject anyone who has missed their loan repayments. What the banks fail to understand is that the creative entrepreneurs do not have stable income. The nature of creative offerings is often project based and as such, income generation follows the timing of those projects. A more sympathetic approach is required. As long as there is effort to close the gap of overdue amounts from time to time, credit should be given to the character of the entrepreneurs. This is what MyCreative has done – acknowledging the inherent characteristics of the players of the Creative Industry.

What else can be said about the “Character”. The curriculum vitae of the entrepreneurs play an important role. There are two perspectives: Technical ability and Management skills. The Technical component is the ability to produce the intended level of quality for the creative offerings. Even if the entrepreneurs themselves do not have that ability, his or her ability to procure resources that ensures the production of the intended level of quality for the creative offerings will suffice. The Management skills is basically the entrepreneurs ability to run the business from crucial aspects such as marketing, financial, legal, secretarial and innovation to change in tandem with the dynamic surroundings.

Many VCs and PEs confess that when they invest, it is mostly because of the entrepreneurs rather than the product. Whilst the product saleability and innovation is key, it may not give a success story when the management is hopeless. On the other hand, if the management is strong, an average product can be made into cash cows that bring in profits. This is why “Character” has always been the first assessment component – a first impression per se.

The second C is the “Cash Flows”. As mentioned earlier, an investor likes to see a future horizon at least as far as 5 years. They want to know critical cash flow assumptions. For example, how are you going to earn revenues? Is it by subscription charges? Is it by advertising expenditure (Adex)? Is it by outright sale? Is it by consignment sale? Is it a commission fee? Is it a revenue sharing arrangement? There can be dozens of questions on this. Once they have established the methods of revenue generation, they will ask what is the pricing strategy. Are you pricing your products higher than your competitors? If your price is higher than your competitors’, what value added aspects can support that extra premium?

From the cost perspective, cash out flows are also important for its excessiveness above the cash inflow will paralyse the business operation. One must always ensure that its cash inflow is more than adequate to cover cash outflow. For example, if you give a credit term of 4 months to your customers and then accepts a credit term of 3 months from your suppliers, you are putting a gun on your head. Logically that will not put you in a position to pay your suppliers given the longer timing to collect from your customers. Again this is not rocket science or requiring a Bachelors Degree. It is merely the street smart of an entrepreneur.
Whilst minimising costs is favourable, your financial projection must always be logical to reflect what the reality would be. You must assume all possible cash out flows. Items such as rental, staff, utilities, marketing, insurance, accounting, transportation, commission fees and costs of production, must all be identified, quantified and accounted for. These costs do not stay stagnant. They increase overtime. If not at the minimum 3% inflation per Consumer Price Index (CPI), it can be specified such as 15% rental increase at the renewal of a tenancy agreement.

What a cash flow projection will say to the investors are the answers to many of their questions. They would like to know how much revenue can you generate. Will that revenue be enough to cover all the costs with the remaining excess as profits? Will the excess be enough to repay the initial capital injected as well as pay the intended ROI be it interest rates or dividends? Will there be enough excess to be reinvested into the operations to grow the company further? All these questions are within certain parameters such as a time period of 5 years and a benchmarked ROI as discussed earlier.

The third C is “Collateral”. The banks like to use this as a basis to determine the loan amount. First they will ask whether you have a physical asset, preferably properties. Then they will ask you to get a professional valuer to determine the value of the property. Then they will apply a certain percentage of that value, say 80%, of which, the loan amount shall be. The problem for this is that the creative businesses do not always have hard tangible assets. The very nature of a creative business is intangible. They have plenty of intangible assets called Intellectual Properties (IP). IPs can be valued. There are specialised valuers who can value IPs. However, the banks (in Malaysia) is still not confident in accepting the valuation done on IPs. It was said that the valuations are often too astronomical.

So how do you address this issue? In the end, the bankers will rely on the earlier C, i.e. “Cash Flows”. They will ignore the collateral and revert back to the adequacy of future cash flows to repay back the loans as well as the cumulative interests. What we do not realise is that the absence of a physical asset (for collateral) is the main reason why the banks will now offer the loan at a very high interest rate such as 12% to 18% per annum. This is an interest rate typically given for a personal loan or for a credit card or overdraft. If that is the case, then why bother understanding “Collateral”? The answer is, this is the main determinant for a bank to shy away.

A bank will always aim for security. This is the basis of their credit assessment. “Collateral” is not the only form of security. They will ask for a debenture, that is an undertaking by the borrower to pledge liquidation of the companies’ assets to be dedicated to pay the amounts outstanding to the banks first. They will also ask for personal guarantees from the shareholders (or a corporate guarantee if the shareholder is a corporation). They can also ask for any cash in the bank account or cash proceeds to be received from customers to be assigned. What this means is that those cash inflows or balances are also pledged to be dedicated to pay the amounts outstanding to the banks.

Finally, if the entrepreneurs have pumped in money into the company by way of advances to the company, that balance will be required to be kept unpaid so long as the amounts owing to the banks is outstanding. This is what we call subordination. As we can see, the Creative Industry is ranked as high risk because of “Collateral”.

Realising how disadvantageous the creative companies can be in the eyes of the banks, MyCreative has taken a more developmental approach. They have used the “Cash Flow” as a basis to determine how much loans a particular creative company needs in order to grow in the next 5 years whilst IP is taken as collateral alongside debenture, guarantees, assignment of accounts/proceeds as well as subordination; but maintaining the interest rates at a low range of 6% to 8% per annum on amount outstanding and not on flat rate basis.

Many entrepreneurs fail to understand the term flat rate versus chargeable on outstanding basis. A flat rate is a rate used on the amount dedicated as loans. For example, if you have a loan facility of RM3 million and you have so far only used up only RM1 million of that facility, the flat rate will be applied on the RM3 million. Let’s say the flat rate is 4% per annum. The interest charge will be 4% on RM3 million instead of 4% on RM1 million. So effectively, it is 12% on RM1 million. This distinction was not understood by the entrepreneurs resulting in them paying interests at effective rates of 12% to 18% when they thought they have been paying at 4%.

The fourth C is “Condition”. This is the state of affair of the company. Basic questions regarding the operation is crucial. This is the artery of whether there is a business to run in the first place. Some of the more important questions are: Do you have enough staff with the required skills? Do you have enough inventory to fill in the stores to meet demand? Do you have reliable suppliers that can supply the right quality and quantity? Are you over relying on a few suppliers? Do you have long over due payables that will interrupt the cash flow of the operation? Do you have a pending legal suit against you? Do you have all the necessary licenses?

To continue further, have you registered all your IPs to avoid IP theft? Are there any detrimental laws and regulations being passed by the Government that affects your operations? How loose or tight is the barriers to entry by potential competitors? Is your product susceptible to technological or commercial obsolescence earlier than expected? Do you have enough distribution channels to reach out to customers? Do you have a strong market share of the customers? Are you pricing your products appropriately? The list is never ending, really.

The fifth and final C is “Capital”. The more capital the entrepreneurs inject into the company, the more commitment the entrepreneurs will put into the business. This sense of ownership is always absent in the local entrepreneurship movement. It seems that the industry has developed a new breed of entrepreneurs who do not want to invest their money at all, even RM20,000. They’d rather use 100% of other people’s money, especially grants or angels. This is indeed a worrying state. Investors now are facing numerous RM2 companies making their way into the pipeline inviting funders to place their bets. Another reason why investors shy away.

About The Author：Johan Ishak，Chief Executive Officer of My Creative, Born in the year of Wooden Rabbit in Penang. Art is at Heart but Numbers keep me going,.. and I think Led Zeppelin rocks!

Comment by Dokusō-tekina aidea on October 1, 2022 at 10:59am

Creativity Needs Soul

Chapter 2 of Fueling The Kreativ Malaysia

THE ECOSYSTEM of the Creative Industry needs to be analysed critically. If not, we will forever prescribe the wrong medicine that will never heal the disease. It would be a shame if all of our efforts are channelled to address the symptoms rather than the causes of the problems. Earlier we have had some discussions on ‘Grants’ and whether it is the right approach to assist entrepreneurs (of the Creative Industry). Perhaps we should park this question aside first as it is still premature to conclude without understanding the components of our Creative Industry’s ecosystem.

So what can we say about our (Malaysian) Creative Industry’s ecosystem? There are many components to an ecosystem. The first is the source of creativity. True that everybody kept on saying that education is the key. However, we must remember that creativity, or art, for that matter, is not a structured deal. It is the right brain – the chaotic and abstract interchange of pulses between the neurons that occupy the right side of the brain. Therefore creativity comes from experience as well as collective memory of what the soul accepts as beauty. Each individual defines his or her own beauty. It is a unique deal from each one of us. As they say, “Beauty is in the Eye of the Beholder.”

In the earlier Chapter we made some comparisons to Korea. Now we should look at our neighbour, Indonesia. We (Malaysia and Indonesia) share the same genetic origin, hence the common reference to the Nusantara region. The Nusantara is a term often used to group the Malay race be it from the Peninsula, Borneo, Sumatra, Jawa, Sulawesi or any islands from the Indonesian borders as well as the Southern Philippines. When extended to include our slightly non-Malay neighbours such as Thailand and Vietnam and such, a Chinese reference of Nanyang is used – that means, South East Asia. So how are we in comparison to our Malay neighbours?

Indonesia has a very liberal openness to their creative acceptance. They seem to have been able to absorb many parts of foreign culture but morphed it into something very much their own. If we listen to Indonesian Jazz and R&B, it is miles ahead, quality-wise. Malaysia on the other hand, is dampened by the concerns over Islamic values being tarnished. We (Malaysians) have caused our creative evolution to be stagnated by ceasing to infuse new elements into the art. As quoted by the Chief Executive Officer of Cradle, Mr Nazrin, “To remain truly local in only one mould would hurt the appreciation of local arts and culture.”

The society (Malaysia) has evolved so much differently from those in Indonesia when it comes to creativity and culture. Perhaps God has a plan for Malaysia but we cannot help to notice that Indonesians have reached a far higher level of culture evolution from all aspects such as diversity, inclusivity, societal appreciation, education, pride, globalisation, talent pool and of course, economically. Have we (Malaysians) destroyed our potential to evolve (culturally) simply because we want to be purists? Our interpretation of what are acceptable forms of art and culture may have hindered us from infusing external ideas and hence, shrunk our openness for new things. In other words, we simply refuse to go against what we perceive to be cultural norms. We continue to follow traditions passed down by previous generations and that saga continues without avenues to blossom but instead, crumpled within.

Why is this observation true? Let us go back to Indonesia. In 2016, a team of observers from a Government agency called MyCreative Ventures was sent to Jakarta. Their task was simple. Observe and compare to Malaysia. To their astonishment, their observations did nothing other than to confirm that Indonesia has evolved tremendously when it comes to their creative industry. When in Jakarta, drop by any night clubs with live bands and you will see a local Indonesian band performing. Do that in Malaysia, half of the time you will either end up getting Indonesian or Philippino bands. Whatever happened to our local bands? The local bands are struggling to express their creativity because the market is limited. They are forced to go underground. Somehow the underground culture is preferred by our youth. They (Malaysian musicians) are lucky that they have Jennifer Thompson to bring them around on live band circuits.

A few years ago, Tan Sri Rais Yatim encouraged Malaysians to wear Malaysian Batik on Thursdays. Many citizens (of Malaysia) made fun of this. They are not proud of the Malaysian Batik. The move was viewed as a protectionism measure rather than an appreciation undertaking. Why is that so? Guess what the MyCreative Ventures’ observers noticed? On Fridays, the entire Jakarta was in their Indonesia Batik. Both male and female, old and young, across all ethnic groups, not matter whether you are working or you are just a Pecal seller by the road side. It is a fantastic feeling to see the citizens of a nation expressing their pride and joy of their local culture. This astonishment reaches its zenith when the team entered into a huge mall called Thamrin City Mall in Jakarta. Thamrin City Mall is a gigantic multilevel Indonesian Batik retail store that showcases diverse and contemporarised Indonesian batik.

Next was the culinary arts. How many times have you tasted Nasi Lemak that tastes like normal white rice (in Kuala Lumpur)? You would probably score eight out of ten. Let us take traditional cakes for a test. Anyone from Penang would curse the ‘kuehs’ (traditional Malay cakes) in Kuala Lumpur. For example, the Cucur Badak, that originated from the Northern Malaysia, is supposed to have its filling made of grated juicy coconut. Only then will the Cucur Badak tastes divinely delicious. Somehow, the urge to cut cost has resulted in the Cucur Badak (in Kuala Lumpur) tasting very dry with no juice. The hawkers had extracted the juice for other purposes. This never happen in Indonesia. Go to any food stall or hawkers in Jakarta and you will be promised a delicious treat no matter what the price is. A simple ‘ayam kampung’ (free range chicken) with rice flanked by five different types of Indonesia ‘sambals’ (chili sauce) will epitomise food from the heavens. Enough said.

Let us talk about performing arts and content creation. We are indeed proud of Tuan Haji Burhanuddin’s Upin and Ipin that had gone viral amongst Indonesian kids. The nation is very much gratified with this success. Then we have Boboiboy that is emulating such success. So we are not always faced with negativity. Somehow we do have success stories to shout about. That is great. However, we need a more pervasive success. An achievement that creeps deep into the society and survives the change of era and progressively adapting to the changing environment.

It is interesting that more than half a century later, P. Ramlee’s work is still a benchmark. If we look at P. Ramlee’s stories ranging from Ibu Mertuaku to Bujang Lapok, he had always infused in foreign elements that made it international. With him making fun of whatever is in our lives (social commentaries), it immortalises his work beyond 2 generations, at least. In 1960’s, P. Ramlee’s work was showing on the national television of Egypt. Now that is a pervasive success. The old folks in Cairo who sits and drink that sweet black coffee on the streets of Khan Al-Khalilee still mention P. Ramlee to shoppers who they can identify as Malaysians. This is a fact. Not a made up story. But why? Well, don’t we all ever wondered that perhaps the Egyptians are entertained by the fact that Abdul Wahub from Tiga Abdul wears a tarbush? What about the adaptation of Ali Baba and the Forty Thieves into Ali Baba Bujang Lapok? This is what we need to revive our creative society. Not necessarily the dark red tarbush, but the soul that creativity needs.

In any progressive society, at least the urbanites celebrate local arts, culture and music. That is lacking in Malaysia. We have rich Dato’s and Tan Sri’s buying art in Bali instead of from Malaysian artists. When asked, they will say, “It is cheaper.” Art is not about expensive or cheap. Art is about appreciating creativity, although we all like that to be extended to be ‘economically appreciated’. These people (not all) are proud that they spent thousands of Ringgit on their Italian chairs but boast that they bought cheap art from Bali. Would it not be more meaningful if the money is spent on great Malaysian art but small budget provided for Ikea furniture instead?

The students of the Faculty of Film, Theatre and Animation (FiTA) of Universiti Teknologi Mara (UiTM) attend a course in their final semester that exposes them to what is out there in the real world of Creative Industry. Many of them expressed their surprise when they had learnt that Malaysians have increased their contribution to cinema collections over the years but when dissected, the contribution from local movies has declined. This means that we (Malaysians) prefer Hollywood movies rather than local. This conclusion is also confirmed by a study done by the Film Directors Association of Malaysia (FDAM).
We should not blame the Malaysian society alone. We should blame both, the Malaysian society, as well as the film makers. The former is guilty for arrogance and the latter for ignorance. We if give a fair chance to the local movies, we will find that there are really good ones. Some examples worth mentioning are Songlap, Bunohan, Setem, Sepet, Talentime, Ola Bola and many more. Let us not have the attitude of “Filem Malaysia kampung” (Malaysian films are low class). Let us not be arrogant. For the film makers, they ought to strike a balance. A balance between making money as well as producing quality films. It seems that achieving this balance is a big issue and has resulted in two different types of movie makers in Malaysia. They are the ‘Hantus and Gangsters’ group (reference to mass market taste) and the ‘Artsy Fartsy Nobody Can Understand’ group.

What is this balance we ought to achieve? The Hantus and Gangsters actually makes a lot of money. People love a simple minded movie. They like comedy like Anak Mami. They like love stories like Ombak Rindu. They like action movies like KL Gangster. They like horror movies such as Khurafat. These types of movies can make money. On the other hand, we have the artistic work of the late Yasmin Ahmad that achieved so many awards but did not make money. It is either something is not right with the production or something is not right with the people. Either or, we need to balance this. This is a balancing act that requires sacrifices. The production houses may have to sacrifice from being a purist in order to make money. Then, from that money, produce the award winning ones.
Independent movie makers may not have the stamina to do both. The ones who want to remain artistically purists, will get the awards but not the money. The ones who wants to make a living, practically, will forego the awards but get the profits. Big studios like Astro’s Tayangan Unggul and Media Prima’s Primework Studios can afford to do both. They do a few of the ‘Hantus and Gangsters’ to make money, and then they take part of that money to produce the award winning movies. This is the balance that will ensure both the development of quality movies as well as sustaining the industry economically. Somehow, the independent producers must emulate this method. If the stamina is a concern, then perhaps it is best to produce the money making movies first before going for the awards. As you can see, it is quite tough to assimilate business acumen into Creativity.

Earlier we made reference to how the right brain works – the chaotic and abstract interchange of pulses between the neurons that occupy the right side of the brain. Well, the left brain behaves differently - the structured and calculated interchange of pulses between the neurons that occupy the left side of the brain. We have now instantly explained why it is tough to assimilate business acumen into the creative mind. However, we must not blame biology forever for such blaming action would mean we are blaming God for who we are. There is a way to contain chaos and abstract thinking within the boundaries of structured framework. This can be done. This has been done.

We shall remind ourselves the term ‘grantrepreneurs’. It is the Malaysian way of describing entrepreneurs who rely heavily on grants. The idea of grants is a noble one. It is to kick start a business. Naturally, it relates to the stage where research and development is conducted and study is done to address technical aspects of a particular product or service in order for it to be suitable for commercialisation stage. Even at commercialisation stage, a grant is logical for items such as marketing, distribution and promotional costs. However, grants are only meant to kick start the business. Once the products hit the market and it is accepted by the market, you are meant to ‘graduate’ from the grant seeking stage and start looking for investors who can push the business to the next level. Sadly, many Malaysian companies continue to apply for grants even when they have operated their businesses for more than a decade and many with profits accumulated. What is worse, some companies survived all these years not because of profits from commercialisation, but from being fuelled by grants continuously. Is this efficient and effective?

A briefing done by the Malaysian Venture Capital and Private Equity Association (MVCA) in their training courses for the investment fraternity revealed that the capital framework for entrepreneurship is akin to a valley. They call it the Valley of Death. Whilst this may be elementary to those who are educated with investment analytical knowledge, this is not what most of the entrepreneurs (in Malaysia) understand. The deepest part of the Valley of Death is when grants are given. With the grant money, they develop prototypes. Then they are supposed to find Early Investors, or Angels, who can pull them out of the valley and climb upwards. If they cannot achieve this, they will slide into the valley and the idea will just die away. Hence, the Valley of Death.

Subsequent to the Angels phase, the business should be ready to embark on commercialisation. That is when a Venture Capitalist comes in. They pump in money with the view of the product achieving significant growth in its market share. At this stage, the business may not even start making profits yet. The Venture Capitalists will work with the entrepreneurs to grow the business into a promising one. This ‘promise’ is what the Venture Capitalists will sell to subsequent investors.

We have to be fair when linking the types of funding to the stage of the businesses. Many citizens are upset when the Government spend millions of Ringgit channelling funds in the form of grants to entrepreneurs. What they do not understand is that grants have the same function as other infrastructure. When the Government builds the roads, or railways, they do not generate profits (or at least not in the initial years). It is the ripple effect of those infrastructure has to the economy is what matters. Similarly, when grants are invested in many entrepreneurs, it is with the intention of creating growth to the economy. Entrepreneurs make up majority portion of what we termed as Small and Medium Enterprises (SME’s). SME’s make up more than half of the source of the nation’s GDP. Fuelling entrepreneurs will therefore fuel the economy. Of course, not all will succeed. Just like the gang of sperms swimming up the stream. Only one will make it (or two if they are meant to be non-identical twins).

So, what has all this got to do with the Creative Industry? It has everything to do with the Creative Industry. That is why many grants are channelled to Creative entrepreneurs via agencies such as Cradle, FINAS, MDeC, MCMC and many more. The entrepreneurs must have a road map where they should plan for ‘graduating’ the ‘grant’ stage and grow into the ‘investors’ stage. An interview by My Intellectual Property Organisation (MyIPO) with Vision Animation’s CEO, Mr Low HuoiSeong, revealed that he used such plan. Vision Animation had already incorporated plans for investors to come in for more than one season of their animation series inspired by Gwen Stefani,Kuu Kuu Harajuku, when they were applying for their first investor, MyCreative Ventures, to come in.

Today, they have investors from Malaysia, Philippines and Australia. They have/are producing three seasons of the show and the first season is already showing on Nickelodeon in America and on other channels across the globe. They secured a licensing and merchandising deal early with Mattel, the maker of Barbie dolls, who is making this a major product launch in 2017. All this did not happen by chance. It was planned, well ahead of time. This is what the entrepreneurs should do. By the time the business has investors who are willing to put the chips on the Roulette table, grants will become irrelevant.
In this case, a few key points ought to be extracted. First, the plan to progress (funding wise or product progression wise) must be in place. Second, avoid being trapped in a limited market by going beyond borders. Third, capitalise on unique selling propositions. Fourth, convince the investors. Fifth, perhaps pray for a bit of luck. In most cases, the entrepreneurs in Malaysia do not do this. They pursue grants for a season but no consideration for continuous development for future content – i.e. project based rather than business based. They just produce what will be consumed by the thirty million Malaysian population (at most) and do not produce what the market is craving for (‘syiok sendiri’). They certainly refuse to educate investors and behave as if the investors' generosity is their right.

Many entrepreneurs will say that it is a chicken and egg situation. If we do not pump in money, we can never develop. If we do not develop (content), we will never know whether the market will accept it. In order to know whether monies can be invested, monies need to be invested in the first place. Therefore, investors should trust that it will succeed instead of being calculative for profits. This do not go well with the investors. In an investor’s mind, he is saying that he will achieve certainty in a Nasi Lemak restaurant rather than investing in the movie. So the investor will do just that – i.e. invest in a Nasi Lemak restaurant. This is why the Creative Industry is lacking the funding from traditional sources of funds. This is why grants are important to build the entrepreneurs to a level where they are on par, or slightly below the comfort level given by the Nasi Lemak entrepreneurs.

Climbing out from the Valley of Death is a tall order for Creative businesses. The traditional Bankers work in a myopic manner. They start their Chapter 1 with assets. Their first question would be, “What is the value of the assets?” This is different from a Venture Capitalist who asks, “What is the product?”, or “Is there a market?”, or “Who is in the management team?” A Banker would first establish a value in accordance with their acceptable methods such as discounted cash flows or comparable market price model. Then they would apply a limit, say, eighty per cent of the value of the assets. This is the figure they are willing to give out as loans. This is on the back of that asset being collateralised. No asset means no loan.

Everything about that concept is not working well with the Creative Industry. First of all, the Bankers will not accept the type of assets a Creative business can offer, i.e. intangible asset called Intellectual Properties (IP). Second, the value of IP’s, as determined by the discounting of future potential net profits to be generated by the IP’s are often astronomical. Third, even if the Bankers accept the IP’s, there is no systematic market to liquidate those IP’s (in Malaysia). For this, the Bankers are reluctant to fund Creative businesses. For this as well, the Government, via MyIPO and the Ministry of Finance (MoF), are developing a local acceptable IP valuation methods, training a pool of valuation professionals as well as establishing a market place for those IP’s. Efforts are still on-going but far from perfection.
We started the thinking process in this article with the word ‘Ecosystem’. This article alone is not sufficient to address all of the ecosystem components. We have so far only touched two important areas. They are: Source of Creativity and source of funds - but merely on the surface. A more in-depth discussion will happen in the future articles but what we have so far will suffice to build the momentum of our thought process. Just to give the readers a flavour of what more could be lacking, reference is made to a study group that was sent to Hollywood in 2013 to observe the matured film financing industry. The group consists of representatives from MDeC, FINAS, PEMANDU, MoF, BSN, MCMC, MAVCAP and MyCreative Ventures. Their observation uncovered how primitive our film financing ecosystem is.

First of all, a film producer in Hollywood will not commence the production activity until seventy per cent of the funds for the movie have been secured. They may start their pre-production activities but, even that is subject to the seeding funds from the early investors. What is more compelling is that, most of the time, the investors include the distribution players. In other words, they already have parties who will be distributing the content and this often comes with a minimum guarantee – a sale if you may – prior to the commencement of the production. The seventy per cent investors are normally made up of the original producers, perhaps some of the directors or actors, Venture Capitalists or Private Equity funds, Angels, distributors and rebates from various Governments. To close the thirty per cent gap, Hollywood has two industry players called the Bankers and the Bond dealers.

The Banks in Hollywood have dedicated divisions that only deal with film financing. Given that the Banks come in late into the deal, and they demand to be the earlier ones to recover their investments, they naturally charge the lower Return on Investments (ROI), or interests. This is generally around 12% per annum. The Distributor Financiers may take a cut from the sales value because it is akin to sales commission. This will definitely be higher than 12%. In most markets, sales commission range between 15% to 30%.

The Bond holders get paid next. This is because they fill up whatever last gaps remaining. Hence the name ‘Completion Bond’. They are like an insurance to ensure that the movie gets completed whether or not full funding requirements have been met. Completion Bonds cost higher than what the bankers charge but may be lower than what the Distributor Financiers take. After satisfying the Bankers, the Completion Bonds as well as the Distributor Financiers, the sales collection flows down the water fall to start filling up the cups for the Limited Partners such as Venture Capitalists and Private Equity funds. Finally, the early investors get paid. After all that, whatever remains get accumulated into a lake and is divided to all those parties again based on a predetermined ratio.

The financing mechanism in Hollywood does sound complicated. But who cares? As long as it brings money into the equation, let it be as complicated as hell. This method do not exist in Malaysia. We do not practice such water fall regime. Why? Because we do not have Completion Bonds. We do not have Venture Capitalists and Private Equity funds who are willing to take the risk of film production. We do not have production houses who can invest their own money as they have been relying on grants all this while. We do not have film financing divisions in our banks. We do not have enough distributors who are willing to invest in the content. We do not have lawyers and accountants who can manage the entire process. What we do have is the Film in Malaysia Incentive (FIMI) that is a film rebate system for those who produce in Malaysia. However, only RM50 million has been identified for FIMI in the 2017 Malaysia Budget. Most importantly, our creativity needs soul.

About The Author：Johan Ishak，Chief Executive Officer of My Creative, Born in the year of Wooden Rabbit in Penang. Art is at Heart but Numbers keep me going,.. and I think Led Zeppelin rocks!

Comment by Dokusō-tekina aidea on September 30, 2022 at 8:52am

TO BEGIN WITH

Chapter 1 of Fuelling the Kreativ Malaysia

TO BEGIN WITH, Malaysia was neither there nor here when it comes to its Creative Industry. Of course, this observation was made earlier in 2011 when the Creative Industry had only contributed 1.27% to Malaysia’s Gross Domestic Product (GDP). This may not be a positive statement to start an article such as this, but it is that bitter truth that needed to be dealt with that had led us to a realisation. A realisation that ignited thinking. A catalyst so to speak. A take stock of a condition that would later bring changes. Changes that matter.

To begin with, we must analyse the profile of our country. Malaysia is relatively a young country when compared to some other nations that we often compare with when it comes to Creative Industry. In 2011, some of our neighbours, such as Singapore, Thailand and Indonesia, have already recorded GDP contribution of 5% to 7% when it comes to their Creative Industry. No use comparing to Japan or Canada or the United States of America (USA) for that matter. You would already guessed the results. Korea however, would be a very interesting country to compare with.

To begin with, Korea was not that great anyway in their Creative Industry three decades ago. With a lot of realisation and a lot of changes, Korea transformed its nation from agriculture based to knowledge based economy particularly the Creative Industry. Thirty years ago they (Koreans) had already formulated a framework that provided the progressive blueprint for its Creative Industry. Today, they are a great nation. Their electronics have overtaken the Japanese, if not on par, and the automobile industry is just following closely behind Japanese waiting for that sweet moment to kick Honda, Toyota and Nissan.

To begin with, the Korean Government, via its KOCCA initiative, did provide the necessary seed for the Korean Creative Industry to bloom and take a progressive direction. Rain (the singer), wasn’t born that way. Rain was identified at an early stage and undergone many transformation. They trained him. They groomed him. From vocal classes to fashion. From dancing steps to charismatic appearance. He is the product of KOCCA. Korean private sector also played an instrumental role in this transformation. Samsung had certainly invested a lot. This is what Malaysia needs.

Malaysia needs some changes like the Koreans. Do we blame ourselves for not changing earlier? Probably not. As mentioned earlier, Malaysia is a young nation. Perhaps our current realisation (to change) came at the right time when it is supposed to be and when Malaysia is ready to make changes. In 1997/1998 we (Malaysians) have already realised the need to embrace technology. We initiated the Malaysian Multimedia Super Corridor (MSC) and along with it came Malaysia Digital Economy Corporation, or MDeC (previously known as Multimedia Development Corporation). This had certainly shaped how our nation had progressed in the past two decades. Thanks to that realisation, we are now a savvy nation – being the number one ranking social media freak in the World.

The point here (linking back to the Koreans) is that, we can make changes. We have done so in the past. We are doing it as we speak. We can certainly replicate success and change further. Like many nations, we need to have that realisation first before any meaningful actions can happen. Do we have that realisation now? Are we too late in fixing the Creative Industry? Luckily, the answer to that is, no, we are not too late and we certainly have what it takes to make the necessary changes. The Government has pumped in so much money to fuel the economy and the Creative Industry is not forgotten (perhaps slightly when ranked against the other industries).

How have we Malaysians progressed since independence in 1957? When we try to answer this question, we will forgive ourselves more (from the context of making necessary changes to our Creative Industry). Our great leader, Tunku Abdul Rahman Putra Al-Haj, had his special role, and he executed it well. Of course achieving independence is one, but what Tunku had to prioritise is our nation’s sovereignty in the eyes of the World. There were so many ‘fill in the blanks’ required in order for the World to recognise Semenanjung Tanah Melayu (prior to the inclusion of Singapore, Sabah and Sarawak). We were faced with communism threats and hence, we were also pressured to take a position in declaring war against the communists. Tunku had to also convince the nation that we are against Apartheid in South Africa. There were many aspects that required Tunku’s attention and what had been mentioned are just the tip of an iceberg.

The fact that Creative Industry was no where in Tunku’s brain shows that our nation had many other matters to deal with. Meanwhile, the Creative Industry was just nicely brewing in Malaysia with names such as P. Ramlee and Saloma. In any way, we can forgive Tunku. Next is Tun Razak, our second Prime Minister. Tun Razak is a visionary man. He had great visions for Malaysia. He was an epitome leader of the region (Nusantara – the Malay Archipelago). He knew that we needed so many changes in order to move forward as a significant nation in the eyes of the World. He was brave in his policies and he meant business.

However, Tun Razak had one issue he cannot ignore, that is, poverty. To fix poverty, he needed to fix the income disparity amongst the citizens. That was (still is), a sensitive matter as it was (still is) very much linked to the different significant ethnic groups we have in Malaysia. The ethnic disharmony situation towards the end of Tunku Abdul Rahman’s reign needed to be addressed. Tun Razak was the man for it.

Thanks to Tun Razak, his methods to tackle the disparity in income distribution is a fixed policy that forms the foundation of Malaysian economic framework for years to come until now as evident in Malaysia Plan 1 to 11. At that point, Creative Industry was still not in any priority list. To be honest, perhaps it was never in our neighbours’ list either. In any case, we now move further in the history continuum of era. Tun Hussein was a transition Prime Minister and everybody knows this. He was a good administrator of course. What we needed was the third phase after Tunku’s Sovereignty Era and Tun Razak’s Economic Adjustment Era. And there was Tun Dr. Mahathir.

The third phase was the transformation of Malaysia from a primarily agriculture based nation to a neo-industrialised country (NIC). We were to move away from being the largest tin mining country in the World. We were to move away from being the largest rubber exporter nation in the World. We were to emulate the Japanese (post war). We were to emulate the Koreans. We were to emulate the Germans (post war). We were dipping our toes in so many modernisation initiatives. Fortunately for us, we had the money from our petroleum revenues. This was the Modernisation phase. This is when we started exporting semiconductors from Penang, cars from Shah Alam, petrochemicals from Kerteh and many more factory based products.

Tun further started the ball rolling on K-economy (Knowledge Economy). It was the era of universities growing like mushrooms. It was when the earlier mentioned MSC was made into existence. Along with this the Creative Industry started to see the light at the end of the tunnel for Creative Industry is very much a subset of K-economy. A significant portion of the Creative Industry is the Content Industry. The Content Industry was and still is, very much human capital intensive in its nature. A lot of investments needed to train people as they are the sole largest and most important asset in the Content Industry. Later in this thesis we will touch base with Fashion, Performing Arts, Visual Arts, Music and Literature, but for now, the Content Industry takes a front seat.

So there it was, the beginning of an era where Creative Industry starts appearing in Governmental policies. Tun Mahathir left shortly after the commencement of the MSC and after a short governance by Tun Abdullah, Dato’ Sri Najib Razak became the Prime Minister. Unlike his father (Tun Razak), Dato’ Sri Najib inherited a country with relatively more stabilised income disparity condition, a well established country that is accepted by the World and a country that has the ripe platform for a transformation from a Developing Nation to a Developed Nation status. This is when Creative Industry will emerge as a significant force to be reckoned with when politicians are talking about national economy and the employment market.

At this stage, it is still nothing to shout about. What we need to understand is what it means to be a Developed Nation? A Developed Nation no longer struggle to make statements for World sovereignty security. A Developed Nation no longer struggle to address poverty. A Developed Nation no longer does soul searching on what the sources of economy should be. A Developed Nation starts talking about identity.

What is an identity? That is the question. This is where the Creative Industry will be noticed. When we ask about Malaysia’s identity, we will think about our culture for culture is the one variable that differentiates us from the other countries. Culture is the umbrella for many creativity elements. Under culture we embrace art. Under culture we embrace our traditional music and plays. Under culture we identify our culinary uniqueness. Under culture we say who we are to the rest of the World. This is what the fourth phase should be, that is, the age of Identity. We are to shout to the World that we are beautiful just like how the Japanese did with their animation. Just like how the Americans did with their Hollywood. Just like how the French did with their culinary arts. Just like how the British did with their theatres. Just like how the Koreans did with their K-Pop.

This is what the Najib (Dato’ Sri) administration should be about. It is an era of identity. It is an era of culture. It is an era of knowledge. It is an era of human capital. It is an era of the Creative Industry. We have thousands of years of evolved culture and along with it we inherited immense creativity. Our youth no longer talks about being accountants, lawyers, engineers, doctors and the like. Our youth is talking about information technology, gaming industry, digital content, social media, internet of things, virtual reality, augmented reality, sustainable development and many more phenomenon that only suggest that creativity is a necessity rather than complementary.

Looking back at the Malaysian budget for the past decade, we can identify billions of money being invested for the Creative Industry. The preparation of the infrastructure to open Malaysia to the internet world itself is already a huge thing. MDeC had, on many levels, facilitated this by partnering with many international companies who opened their offices in Cyberjaya. The telecommunication industry saw a paradigm shift when its consumers switched from fixed lines to mobile lines and started to consume data rather than voice. And there was the huge investment in High Speed Broadband by Telekom Malaysia.

There were also many funds being made available to help grow the Creative Industry. Grants were transmitted from agencies like MDeC, FINAS, MCMC and Cradle providing the financial means for Research and Development and product design. We started to see more technology companies mushrooming and many of them were/are indeed fuelling the Creative Industry. From the basic Keluang Man cartoons, we now have the more complicated BoboiBoy and the infamous Upin & Ipin that had spread their wings into the Indonesian market.

The gaming industry now praise the awesome new games such as Street Fighter V and Final Fantasy XV. Guess where were these games developed? Here (Malaysia) in Bangsar South by a company called Streamline that employs eighty percent of their workforce from the Malaysian youth. Who did most of the computer generated images (CGI) for the movies Snow White and the Huntsman and Life of Pi? As you may have guessed, Malaysians who formed majority of the work force at Rhythm & Hues in Cyberjaya back in 2011. The point here is that, we (Malaysians), have what it takes. We just need to launch it off into the sky. But, why have we not done so yet? Sure we have some successes. Great. What we really need is pervasive success.

What is pervasive success? Pervasive success is a state of affair where all initiatives, whether structured or unstructured, are based on a dedicated foundation with the view of sustainable existence, provided that that particular existence, is indeed a success that is acknowledged. For example, teaching students is an initiative. Teaching comes in many forms. It can be class room based. It can be practical exercises like what an intern experience. It can be training sessions like in the boxing ring. When we take all of these initiatives and arrange it into agendas, we will get a syllabus, an educational syllabus.

Syllabus are then cascaded into an institutionalised system that we all love so much, i.e. schools. The establishment of schools survived decades of generation until such point where more than one generations can find common grounds. This is true because the kids in school today learn the same thing that we learn one hundred years ago – i.e. mathematics, geography, history, science, biology, physics, chemistry and language. True that the content and methods may differ from one generation to another but the basic premise of those subjects remains the same.

For the Creative Industry to achieve this pervasive success, we must first define what is success. Earlier it was mentioned that in 2011, the Creative Industry only contributed 1.27% of the Malaysian GDP. In 2013 this figure increased to 1.34% and the latest statistics (Source: MDeC) revealed that 2015 achieved 1.60%. This is a fantastic improvement. A lot of this was contributed by Government initiatives to boost the Creative Industry.

With the continued grant financing via agencies mentioned earlier and business loans being made available through Bank Simpanan Nasional and MyCreative Ventures (a Government investment arm), the last half decade has shown a more than gradual increment. Is this the success we are talking about? It can be, but it need not be the only one or the most important one. There are other indicators worth pursuing such as employment in the Creative Industry, number of entrepreneurs in the Creative Industry and recognitions achieved.

We can define success all we want but we have not yet established the parameters of what we can agree as a pervasive nature of the success. Let us take employment in the Creative Industry as an example. Success is defined as jobs being created for youth in the Creative Industry. However, when we take a ’pervasive’ view on this, not only should we have jobs being made available, we must ensure that the youth is educated to match the job requirement.

Do we have enough academic institutions to give our youth the qualification required? Are the qualification too philosophical instead of practical? Perhaps students for the Creative Industry need not go through the usual university myopia and instead, a more vocational and technical approach taken? If we have a system that matches our youth’s skills to the jobs being generated by the industry, and that system is maintained, then we have indeed achieved pervasive success. For now, Malaysia is still taking baby steps. So, when we struggle to fuel the Creative Industry and hope that it can blossom, we must ask the right questions. Are we doing it the correct way? The typical “Give a Man a Fish versus Teach a Man How to Fish” thing.

Which of our initiatives are ‘Fish’ and which ones are ‘Teach How to Fish’? Millions of money have been injected into the Creative Industry in the form of grants. This is to help reduce the financial burden of film makers, game developers and animation studios. Grants are great. It certainly help new entrepreneurs to kick start their businesses. However, those companies must grow. They must graduate onto the next level. Instead of talking about “How do I fund this project?’”, they should be asking “How do I fund my Company for the next five years?”. When grants have become their ‘Ganja’, then that is when grants are ‘Fish’ instead of ‘Teach How to Fish’. At this juncture, we shall stop talking about this as there will be plenty of opportunities in future articles where such matter can be deliberated on.

What about our society? Is our (Malaysian) society susceptible to embracing culture the way it is supposed to be embraced if we are to grow the Creative Industry? How many times have you heard your friends asking for free tickets for theatre or musical shows? How many times have you seen your friends buying pirated DVDs or surfed on a pirate site instead of buying the legal content? How many times have you seen your friends reading junk on the social media rather than reading proper novel written by professional writers? How many times have you seen your friends buying cheap art from Bali instead of supporting local artists? How many times have you seen your friends wearing Indonesian Batik rather than Malaysian Batik? You can bet your bottom Dollars that the answers for those questions are not favourable (to the local industry) and what is worse, you apply those questions to yourself instead of your friends.

Many of us (the so called consumers of our Creative Industry) do not realise how we have forsaken our culture, and along with it, forgotten our creative offerings. Our lives are somewhat influenced by civilisation, historical or contemporary, both with significant impact. No doubt ancient civilisations extinct, but they leave behind elements of culture, a legacy that survives throughout time. One important element of culture is Creativity. Creativity and human evolution is inseparable. Unfortunately, many people do take things for granted by ignoring the importance of Creativity. Why do we accept arrogance and ignorance that led Creativity to a forgotten phenomenon in our very life? Even the God and prophets of human civilisation shone through art. Will it not appear awkward if we deny Creativity as part of our existence?

By now, most of us would have already concluded that we need to do a lot more. Some of us may have also forgiven ourselves and reassured ourselves that we did not start late given the natural progression of our nation establishing itself in this World. Now is the time when we strive to convert Malaysia from a Developing Nation to a Developed Nation and with this, we ought to pull the Creative Industry into the projection. Many efforts need to be put in place. The Government has an important role to play when setting policies and budgets. The players in the industry certainly have crucial roles to be carried out for they are the building blocks of the Creative Industry. The general society (assuming the society as a whole is the universe of consumers relevant for the Creative Industry) must embrace the Creative Industry. Or else, how else can the Creative Industry ensure its going concern?

About The Author：Johan Ishak，Chief Executive Officer of My Creative, Born in the year of Wooden Rabbit in Penang. Art is at Heart but Numbers keep me going,.. and I think Led Zeppelin rocks!

Chapter 2

Chapter 3

Comment by Dokusō-tekina aidea on September 19, 2022 at 12:34pm

Cindy Yeap·Harnessing the economic benefits of the creative content industry

MALAYSIA will be stepping up the promotion of its creative content industry as “one of the hard areas of economic growth”, Communications and Multimedia Minister Datuk Saifuddin Abdullah told participants at an online forum on Oct 26 to mark the country’s adoption of the United Nations International Year of Creative Economy for Sustainable Development 2021.

He revealed that he and Tourism, Arts and Culture Minister Datuk Seri Nancy Shukri had just co-chaired the National Creative Economy Council a fortnight ago and discussed funding issues for the creative industry and even having something like “a road [map] to the Oscars”. 

Presumably, he was using the Oscars merely as a symbol of the government’s desire to support the creation of more great Malaysian content for a global audience. After all, insiders familiar with awards politics say winning an Oscar has more to do with [the potentially very expensive affair of] selling the movie well to Academy voters in Hollywood rather than making an outstanding movie or supporting the idealistic souls in the creative arts.

Malaysian companies forging sustainability-driven practices 

For companies with sizeable environmental footprint, could financial incentives be offered in exchange for less emissions, consumption and waste?

It is also in line with the renewed hope of Asian content and narrative garnering greater acceptance among a global audience, after South Korean director Bong Joon-ho’s Parasite made history in February as the first non-English language film to win the Oscar for Best Picture. Parasite was also the first South Korean film to receive the Palme d’Or at the 2019 Cannes Film Festival.

 

Optimism aside, industry insiders say the win was decades in the making. Behind Parasite’s big win is 61-year-old Miky Lee Mie-kyung, vice-chair of Korean conglomerate CJ Group, who is seen as the “godmother” of South Korea’s film industry and credited with playing a crucial role in promoting the Hallyu (Korean cultural) wave. A regular consumer of South Korean exports may recognise the CJ brand of consumer goods as well as CJ E&M Co’s TV channels TVN, TVN Movies and OCN, and the annual Korean wave convention (KCON) that it has organised in Los Angeles and multiple locations across the globe since 2012. CJ’s bakery franchise Tous Les Jours shuttered its Malaysian outlets in 2017 and recently sold its 50% stake in home shopping venture CJ Wow Shop, to make it wholly-owned by Media Prima Bhd.

A granddaughter of Samsung Group founder Lee Byung-chul (Miky is cousin to Samsung Electronics heir apparent Lee Jae-yong), Miky was an early investor in DreamWorks SKG (whose founders include Steven Spielberg) in 1995. The US$300 million deal reportedly gave CJ the film studio’s Asian distribution rights as well as access for her Korean filmmakers to study under DreamWorks.

Industry stimulus 

In his opening address at the Creative Economy 2021 Forum held in early October in conjunction with Budget 2021, Finance Minister Tengku Zafrul Tengku Abdul Aziz cited the success of South Korea’s film and music industry in boosting tourism as well as the country’s exports of consumer goods and services. He said players in the creative arts scene “should not see themselves in isolation” but position themselves to become “substantial and sustainable contributors” to the nation’s economy and high-growth sectors like science and innovation. After all, part of what makes Apple or Samsung phones a worldwide success is their design. 

There’s certainly ample room to grow the industry’s contribution to Malaysia’s economic growth. As it is, the creative industry contributes around 2% of Malaysia GDP, makes up 0.2% of exports and employs about one million people, chief statistician Datuk Seri Mohd Uzir Mahidin told participants at the Creative Economy 2021 Forum. 

Noting that the promotion of the creative industry and entrepreneurs was mentioned in the 11th Malaysia Plan (2016 to 2020), Saifuddin said efforts to leverage the country’s rich cultural heritage in promoting sustainable development would continue to feature in the 12th Malaysia Plan to be tabled in January 2021. “We’re committed to building a better ecosystem … the models can be borrowed from countries like South Korea, the ideas are there ... it is about working together and getting things done, putting everyone on the same platform.”

 

It remains to be seen if the creative economy will feature prominently in Budget 2021, which is set to be tabled in parliament this Friday (Nov 6). To help the industry amid the Covid-19 pandemic, the government allocated RM225 million for the arts, culture, entertainment and events industry under the RM35 billion Penjana (Short-term Economic Recovery Plan) announced on June 5. That includes RM100 million in soft loans and RM30 million in grants under MyCreative Ventures and RM10 million under the Cultural Economy Development Agency (Cendana). 

In March, Singapore — which in 2002 introduced a Media 2021 blueprint to increase the sector’s GDP contribution and transform itself into a global media city — allocated another S$55 million in aid for the arts and culture sector in its supplementary budget to counter Covid-19. 

In July, South Korea pledged KRW156.9 billion (US$131 million) to support its arts sector, including KRW23.2 billion in grants for financially strapped artists and KRW31.9 billion in wage support for people in the performing arts such as theatre, musicals and classical concerts. South Korea’s Ministry of Culture, Sports and Tourism received KRW6.48 trillion (US$4.9 billion) in Budget 2019, with KRW1.1 trillion to be invested in the virtual reality content sector and KRW40 billion on a new VR content exhibition space in Seoul. Some KRW113 billion was allocated to content creators while KRW32.3 billion was earmarked to support local filmmakers, cartoonists and fashion designers looking to expand overseas, according to Korean news reports.

 

According to the Hyundai Research Institute (HRI), the annual economic impact from South Korean popular global idol group BTS alone was about US$5.6 billion as at June 2020 and is set to reach KRW56 trillion (US$49.8 billion) over 10 years from 2014 to 2023. BTS alone had helped sell over US$9 billion worth of clothing, cosmetics and food currently, says HRI, which in 2018 estimated that the boy band contributed some US$1.1 billion or 1.7% of total Korean consumer goods exports in 2017. Prior to the pandemic, local news reports had indicated around 1% boost each to the GDP for the cities of Seoul and Busan from just one BTS concert, owing to its army of global fans that are kept constantly engaged by a team of online professionals in different time zones. 

To be sure, the creative industries have not only become an increasingly important contributor to GDP growth but have proved to be transformative in terms of generating income, jobs and exports, United Nations resident coordinator Stefan Priesner said at the online forum, noting the tangible benefits of integrating the 2030 Agenda and Sustainable Development Goals related to the cultural and creative industries in national development plans and budgets.

What about the Oscars? 

CJ Entertainment is in charge of overseas sales and the marketing of The Garden of The Evening Mists, touted as Malaysia’s most well-funded film to date (said to be RM20 million), jointly produced by Astro Shaw and HBO Asia. Asked about Malaysia’s chances of securing an Oscar nomination with The Garden of The Evening Mists, Astro Malaysia Bhd group CEO Henry Tan would only say what is important is that the group continues to strive for excellence in content production. The movie received nine nominations (including for best film, best director and best screenplay, and best actress for Malaysian actress Angelica Lee) at the 56th Golden Horse Film Festival and won the award for Best Makeup and Costume Design.

Tan noted, though, that Taiwanese-American Oscar-winning film director and screenwriter Ang Lee said he “hopes to see more films like this” after watching the film in Taipei.

“Both the book and the film are high-quality works with a strong positive message. I do believe both the book and film will stand the test of time and leave a mark on both Malaysian literature and Malaysian cinema,” says Taiwanese Tom Lin Shu-Yu, who directed the film based on a screenplay by British screenwriter Richard Smith, adapted from Malaysian novelist Tan Twan Eng’s book.

 

Twan Eng reckons that the film is already a landmark for Malaysia “just based on the scale of the production alone”. “The cast and crew are highly talented and diverse, coming from all regions of the world. The production values are world-class. The film looks lush and gorgeous. It focuses on a turbulent period of our history, and Tom Lin has created a sensitive, nuanced, restrained film,” he tells The Edge. 

Why should policymakers pay attention to the rise in the Asian narrative on the global stage and how can they help people in the creative arts? 

“Artists need time to master their craft, and it’s important that policymakers protect the seedlings of creativity from global capitalism and consumerism. For example, Korea has policies protecting Korean Cinema by ordering that movie theatres play at least 50% local films in their theatres. If it was all up to the theatres, they would only play what sells most, but culturally and artistically, it may become hard for that nation to improve,” Lin tells The Edge, noting that education is also key in ensuring that youths are on the same page in terms of the value that the creative arts bring to the nation and society.

 

 “If we are to catch the attention of the West, we will need support from the entire country, and at the same time, the country itself needs to promote all the goods — whether it’s literature, cinema, food, music — that are local to the international scene. Like Parasite again, it’s getting the attention it has because it’s a good film, but also, because of how Koreans have risen their image in the hearts of minds of the West, and this takes an entire nation to achieve,” adds Lin. 

While one can argue that Parasite “may not be Boon Joon Ho’s strongest film”, Lin notes that “it has gotten him furthest into the mainstream in the west”. 

“If Parasite was made 10 to 15 years ago, it might not reach where it is now… this wouldn’t have been possible if not for the whole K-Pop culture getting into the West first,” Lin says. （The Edge Malaysia，November 10, 2020）

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