The Importance of Startups to a Nation’s Economy

Before the global startup wave took off, most national economies were shaped by traditional trade activities, manufacturing-focused MSMEs, and inflows of foreign direct investment (FDI). These sectors largely determined the investment landscape and export contributions within a country’s GDP.

The 1990s marked a turning point. The rapid rise of the internet gave birth to a new type of enterprise—the modern startup. Unlike conventional corporations, startups are built on innovation, bold risk-taking, rapid experimentation, and agile organisational structures. While entrepreneurship itself is not new, this technology-driven startup ecosystem first gained prominence in global hubs such as Silicon Valley, reshaping how economies create value and compete internationally.

Against this global shift, investment promotion agencies have taken on an expanded role, moving beyond traditional facilitation to actively connecting innovation-driven enterprises with new growth markets. Through its overseas offices, MIDA assumes a key role in positioning Malaysia as a strategic base for startups seeking regional expansion, scale, and access to Southeast Asia’s digital economy.

Today, startups are more than just businesses, they are catalysts for national progress. They drive GDP growth through innovation, attract high-value investments, create new jobs, and push industries toward greater competitiveness. By introducing new technologies and business models, startups help build dynamic, future-ready economies and uplift overall living standards.

India exemplifies this transformation. Recognising the strategic importance of startups, the country launched the Startup India initiative in January 2016 through the Department for Promotion of Industry and Internal Trade (DPIIT). The programme simplified regulatory processes and expanded access to funding, helping to shift India from a job-seeking to a job-creating economy. Today, the initiative has recognised more than 159,000 startups and produced over 100 unicorns, with major hubs such as Bengaluru and Delhi-NCR positioning India as the world’s third-largest startup ecosystem.

In Malaysia, proactive measures, facilitated through MIDA’s international outreach, are underway to energise the nation’s innovation landscape. In February 2025, MIDA, as Malaysia’s lead investment promotion agency, signed a Memorandum of Understanding (MoU) with Beyond4 Sdn. Bhd., a homegrown startup accelerator. This collaboration is designed to propel high-growth SMEs, strengthen talent development, and align Malaysia with its aspiration to become a regional hub for digital innovation and entrepreneurship.

Through this partnership, local businesses will gain support in transitioning toward tech-driven models, scaling their operations, and equipping the workforce with future-ready skills. The initiative also strengthens Malaysia’s value proposition as a destination for innovation-led investments, particularly within Southeast Asia’s rapidly growing digital economy.

Building on this momentum, MIDA Mumbai has assumed an active role in strengthening startup linkages between Malaysia and India. In collaboration with Beyond4, multiple webinars were organised to introduce Indian startups to Malaysia’s growing startup ecosystem. The response was highly encouraging, with many Indian startups expressing strong interest in establishing operations in Malaysia.

This engagement was further strengthened through bilateral initiatives held from 17–18 November 2025 involving MIDA Mumbai, MITI Delhi, Beyond4, the Malaysia-India Business Council (MIBC), and the India ASEAN Tech Association (IATA). Over two days, the Malaysian delegation engaged with key Indian stakeholders, including major industry chambers, MeitY Startup Hub, Digital India, Startup India, Invest India, and the Foundation for Innovation and Technology Transfer (FITT) at IIT Delhi. MIDA Mumbai also facilitated industry-level discussions between the India Electronics & Semiconductor Association (IESA) and Beyond4.

These engagements mark an important step toward deeper, mutually beneficial startup collaboration between Malaysia and India. By enabling cross-border expansion, technology partnerships, and innovation-driven investments, MIDA’s overseas facilitation efforts continue to strengthen Malaysia’s position as a preferred destination for high-growth startups seeking regional and global scale.

MIDA Mumbai continues to facilitate Indian startups and companies interested in exploring Malaysia as a regional investment base. As both nations deepen their innovation partnerships, the opportunities for collaboration across technology, talent, and market access will only continue to expand. For further information, please contact [email protected].