Imagine waking up one morning, ready to dive into your startup’s latest project, only to find that your computer screen is locked with a message demanding a ransom. This scenario, once the stuff of dystopian fiction, is an all-too-real threat in today’s digital landscape.

Ransomware attacks have become a pervasive menace, affecting businesses and individuals alike, with startups being particularly vulnerable.

Let’s explore how ransomware can disrupt the day-to-day workings of a startup and discuss some practical strategies for keeping your team and data safe.

The startup grind meets cyber threats

Startups thrive on innovation, agility, and the tireless efforts of their teams. However, this dynamic environment often involves a heavy reliance on technology, making startups prime targets for ransomware attacks. Here’s how such an attack can turn a bustling startup into a scene of chaos:

• Productivity paralysis: Picture this: your team is on the brink of launching a groundbreaking app, deadlines are tight, and everyone is pulling late nights. Suddenly, a ransomware attack locks you out of all critical files. Projects are halted, productivity plummets and the ripple effect can derail your entire timeline.
• Financial stress: The startup world is tough, and financial resources are often limited. The costs associated with a ransomware attack—including potential ransom payments, recovery expenses, and lost revenue—can be devastating. This unexpected financial burden can hinder growth, delay new hires, or even threaten the startup’s survival.
• Emotional toll: The startup environment is inherently high-pressure, with long hours and high stakes. A ransomware attack adds another layer of stress and anxiety, as employees worry about job security, data loss, and the company’s future. This emotional strain can affect morale and productivity, creating a tense and less productive workplace.
• Reputation risks: Trust is crucial for startups, especially those building their brand and customer base. A ransomware attack can damage your company’s reputation, eroding customer trust and confidence. Rebuilding this trust takes time and effort, diverting focus from core business activities.

Real-life ransomware stories

To understand the true impact of ransomware, let’s look at some real-life stories:

• Tech startups: A small tech startup specialising in app development was hit by a ransomware attack that encrypted all their project files. With no recent backups, they faced the grim choice of paying the ransom or starting from scratch. The incident delayed their product launch by several months, costing them potential investors and clients.

Also Read: Phishing remains top cybersecurity concern, but AI will drive it to next level: Zscaler CSO Deepen Desai

• E-commerce ventures: An emerging e-commerce startup experienced a ransomware attack that targeted its customer database. The breach compromised sensitive customer information, leading to legal ramifications and a significant loss of customer trust. The startup had to invest heavily in cybersecurity upgrades and public relations efforts to mitigate the fallout.

Simple strategies for cyber resilience

Given the potential impact of ransomware, adopting proactive strategies is essential. Here are some straightforward tips to enhance cyber resilience:

• Regular backups: Make regular data backups a part of your routine. Store backups securely offline to ensure you can recover data without paying a ransom. Consider setting calendar reminders or using automated backup solutions to keep this practice consistent.
• Stay informed: Keep yourself updated on the latest cybersecurity trends and threats. Follow reputable cybersecurity blogs, attend webinars, and participate in industry forums. Knowledge is power, and staying informed helps you anticipate and counter potential risks.
• Cyber hygiene habits: Cultivate good cyber hygiene habits. Use strong, unique passwords for different accounts and change them regularly. Enable two-factor authentication (2FA) wherever possible. Be cautious with email attachments and links, especially from unknown sources.
• Security culture: Foster a security-conscious culture within your startup. Encourage open discussions about cybersecurity, share best practices, and ensure everyone understands their role in protecting company data. Regular training sessions and simulated phishing exercises can help reinforce this culture.
• Incident response plan: Develop a clear incident response plan. Know who to contact, what steps to take, and how to communicate during a ransomware attack. Having a plan in place can reduce panic and streamline the response process.
• Work-life balance: Maintain a healthy work-life balance to manage stress and stay focused. Cybersecurity threats are stressful, but a well-rested and mentally healthy team is better equipped to handle crises. Encourage breaks, exercise, and time off to recharge.

Ransomware is a significant threat that can disrupt the startup environment, but with proactive measures, you can minimise the risk and impact. By integrating good cybersecurity practices into your daily routine and fostering a culture of awareness and preparedness, you can protect your startup and maintain the dynamic, innovative spirit that drives your success.

In the fast-paced world of startups, staying one step ahead of cyber threats is essential. Protect your data, safeguard your team’s well-being, and continue to pursue your entrepreneurial dreams with confidence. Remember, it’s all about being prepared and staying resilient in the face of digital adversity.

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Malaysia-based Accendo Technologies, a company operating in the area of talent intelligence, selection, development and upskilling, has signed a Memorandum of Understanding (MoU) with Dublin-headquartered employee experience and activation technology firm Welliba to expand its global footprint.

This MoU also positions Accendo to “significantly” enhance its AI models with globally sourced, verified, and secure data. The AI capabilities will enable Accendo to offer “superior” talent intelligence solutions, facilitating its expansion into new markets.

Also Read: Future-proofing talent management: The impact of AI on retention in Southeast Asia

“Access to our combined globally anonymised yet highly rich data will significantly enhance our AI models, enabling us to offer more precise and effective talent intelligence and talent experience solutions. This is a critical step in our global expansion strategy,” Sharma Lachu, CEO of Accendo Technologies, said.

The MOU outlines several key areas of collaboration:

Collaborative research: Engaging in joint research initiatives to explore cutting-edge approaches to talent intelligence and employee experience.

Knowledge sharing: Facilitating regular knowledge exchange sessions, workshops, and seminars to disseminate research findings and best practices.

Development of advanced solutions: Co-developing AI-driven solutions and tools to refine and improve talent selection, development, and upskilling processes.

Driving innovation: Encouraging collaborative projects that drive the creation of new technologies and methodologies in talent management.

David Barrett, CEO of Welliba, added, “We have known Accendo Technologies for over 15 years now and our combined efforts have already yielded significant innovations in talent and people experiences across ASEAN and globally, contributing to the global digital economy and professional export revenue from both our countries.”

Also Read: ‘Bringing world-class AI talent into Singapore can substantially enrich the industry’

Achim Preuss, CIO of Welliba, added, “By leveraging our combined data sets, we will be able to further enhance our AI models, offering superior talent intelligence and talent experience solutions that promote sustainable workforce development and employee well-being.”

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Image Credit: Accendo.

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Startup funding in Southeast Asia faced a substantial 65 per cent decline in H1 (January 01-June 10) 2024, according to a report by global SaaS-based market intelligence platform Tracxn.

The funding stood at US$1.6 billion in H1 this year compared to US$4.5 billion in H1 2023 and US$2.5 billion in H2 2023.

Southeast Asia ranked ninth globally in terms of tech startup funding in H1 2024.

Also Read: SEA startups raised US$371M across 42 rounds in March: Tracxn report

As per the Geo Semi-Annual Report: SEA Tech H1 2024, late-stage funding was the worst hit, which fell 69 per cent to US$421 million in H1 2024 from US$1.3 billion in H2 2023 and an 86 per cent plunge from US$3 billion raised in H1 2023.

Early-stage investments stood at US$946 million in H1 2024, a decline of 19 per cent from US$1.2 billion in H1 2023. However, this is an 8 per cent uptick over H2 2023.

Seed-stage financing dropped to US$234 million in H1 2024 from US$407 million in H1 2023 and US$323 million in H2 2023.

In Q2 (April 01 to June 10) 2024, startups raised US$477 million, an 85 per cent decrease from US$3.16 billion in Q2 2023 and 57 per cent lower than US$1.12 billion raised in Q1 2024. Notably, this period witnessed two major funding rounds exceeding US$100 million: ANEXT Bank (US$148 million Series D) and GuildFi (US$140 million in Series A).

No new unicorns were created in H1 2024, as against one in H1 2023.

However, acquisition activity increased, with 36 companies, compared with 30 in H1 2023 and 42 in H2 2023.

MaNaDr, RYDE, and Topindoku were the only three companies to go public in H1 2024. Only three IPOs took place, a decline from seven in H1 2023 and four in H2 2023.

The leading sectors in terms of performance in H1 2024 were fintech, hightech, and enterprise applications. Fintech firms attracted US$851 million in H1 2023, a 20 per cent drop from US$1.07 billion raised in H1 2023. Funding in the hightech segment stood at US$476 million, a 47 per cent jump from US$323 million in H1 2023.

The enterprise applications sector witnessed a 49 per cent decrease in funding, from US$775 million in the first half of 2023 to US$393 million in H1 2024.

Singapore led the region in terms of total funds raised in H1, followed by Jakarta and Bangkok. Tech startups based in Singapore raised US$1.1 billion in H1 2024, while those based in Jakarta and Bangkok raised US$185 million and US$150 million, respectively.

Also Read: Funding into SEA’s female-led startups falls 42% to US$480.8M in 2023: Tracxn

East Ventures, 500 Global, and Wavemaker Partners emerged as the overall top investors in the SEA ecosystem in H1 2024.

SEEDS Capital, Temasek, and Seventure Partners were the leading early-stage investors in H1 2024, while MUFG Innovation, NewView Capital, and Avataar Ventures topped the late-stage investment charts. Antler, 500 Global Ventures, and East Ventures topped seed-stage funding in H1 2024.

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Arbor, based in the UK, is an AI-powered news aggregation and summary platform. It generates personalised insights for any topic users care about and saves users from searching and reading hundreds of profession-specific news daily. The app utilises its innovative AI hallucination tool to identify and eliminate inaccuracies and provide users with credible information they can put their trust in.

Launched in March 2024, Arbor has partnered with major publishing houses like The New York Times and Hong Kong Economic Journal, allowing users to have access to paywall content from top-tier publishers. The app claims to have gained 140,000 users so far. The company also plans to expand its business into Southeast Asia and India.

In this interview, Arbor founder Cheney Cheng discusses Arbor, its Newspresso tool, partnerships, and the firm’s Southeast Asia expansion.

Edited excerpts:

How does your AI hallucination tool work?

The AI hallucination tool is designed to ensure AI doesn’t make up fake content due to the lack of accurate and relevant information. To prevent such hallucinations, the tool employs AI to compare generated answers with their original sources. This additional layer of verification ensures the accuracy and reliability of the information provided, effectively guarding against hallucinations.

What is Newspresso, and how is Arbor leveraging personalisation to curate news stories on users’ interests? How does Arbor ensure the accuracy and credibility of the news it curates?

Newspresso is the paid newsletter feature of Arbor. It leverages advanced AI technology to personalise news delivery based on users’ interests and roles.

Also Read: Why Asia provides exciting opportunities for Artificial Superintelligence Alliance to scale

An example of how this works is when the same news about Apple’s Worldwide Developers Conference (WWDC) can yield vastly different results when viewed from a consumer’s perspective versus an investor’s perspective.

Can you explain the technology behind Arbor’s AI model and how it continually refines the news curation process?

Based on a core large language model, Arbor has developed a proprietary set of deep learning models and algorithms to better control the relevancy and quality of the output.

Technical challenges faced by a generic large language model (LLM) include accurate news retrieval, cross-lingual content aggregation, and hallucination, among others.

What does the partnership with The New York Times and Hong Kong Economic Journal mean for Arbor, and what value does it provide for users? Are there any other notable partnerships or collaborations in the pipeline that you can share?

The partnership between Arbor, The New York Times and Hong Kong Economic Journal  enhances our mission to deliver high-quality journalism globally.

This collaboration offers Arbor users attractive bundled subscription packages, providing unique perspectives and insightful analyses from reputable sources.

Looking ahead, Arbor plans to continue forming strategic alliances with other high-quality publishers, further expanding its comprehensive news coverage and solidifying its position as a leader in AI-curated news.

What motivated Arbor to expand into Southeast Asian and India? What strategies will Arbor implement to adapt to the unique media landscapes of these countries? How do you plan to compete with existing news curation platforms in the region?

Arbor’s expansion into Southeast Asian markets, such as Singapore, Thailand, and Indonesia, in addition to India, is motivated by the region’s rapid digital adoption and growing demand for reliable news.

To adapt to these unique media landscapes, Arbor will localise content through partnerships with reputable local publishers and leverage advanced AI models to tailor news feeds to user preferences.

What challenges do you anticipate in entering these new markets, and how do you plan to address them? How do you plan to tailor Arbor’s offerings to meet the specific needs and preferences of users in Southeast Asia?

Entering new markets presents challenges such as cultural differences, market competition, and building trust. Arbor aims to address these by adapting its content sources to resonate with diverse cultures, ensuring the content is culturally relevant.

To remain competitive amongst established local news platforms, Arbor will emphasise its unique AI-driven personalisation and high-quality insights.

Also Read: Ethics and Artificial Intelligence: Is the technology only as good as the human behind it?

Building trust is crucial, so Arbor will focus on transparent practices and ensuring the accuracy and credibility of its content. This approach aims to establish Arbor as a trusted and valuable news resource in any new market.

Arbor claims to have achieved growth of 100,000+ users in three months of its launch. What do you attribute this rapid growth to? What are Arbor’s plans for growth in Southeast Asia in the near future?

Arbor’s rapid growth to over 100,000 users in three months is due to its advanced AI technology that delivers highly personalised news, saving users time and providing actionable insights. Moving forward, strategic partnerships with reputable publishers will also boost its credibility.

Arbor plans to grow in Southeast Asia by focusing on cultural adaptability, ensuring content resonates with local audiences, and leveraging partnerships to establish trust.

How do you envision Arbor evolving over the next five years? Are there any plans to introduce Arbor in other regions or countries after Southeast Asia?

We envision the rise of Generative Media as the fourth wave of media transformation and we’re proud to be one of the earliest pioneers in the space.

Over the next five years, Arbor envisions becoming a global leader as a personalised information provider by continually enhancing its AI capabilities and expanding its partnerships with international and local publishers. The platform aims to integrate features like interactive news formats, multilingual support, and deeper user insights to improve the user experience.

After establishing a strong presence in Southeast Asia, Arbor plans to expand into regions like Latin America and Africa, adapting content to meet local needs, and solidifying its position as the go-to platform for personalised news worldwide.

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Image Credit: Arbor.

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Okapi Technologies, a solar financing startup based in Malaysia, has announced its official launch in Malaysia with the closure of a new funding round led by impact investor The Radical Fund.

Multiple angel investors, including Ninja Van co-founders Lai Chang Wen and Shaun Chong, also joined the round.

The details of the deal remain undisclosed.

Also Read: This startup aims to make rooftop solar accessible to smaller households with zero upfront cost

At present, the rooftop solar industry in Malaysia is booming, driven by supportive government policies such as the SolaRIS rebate introduced in April 2024 of up to RM4,000 per household to install solar energy systems on their rooftops.

However, high upfront costs remain a significant barrier to adoption for middle-income households. Industry insiders including those from Tenaga Nasional Berhad, Malaysia’s national utilities company, have attributed high upfront pricing as the main obstacle to greater adoption of rooftop solar among homeowners. Also, there is a lack of appropriate financing options for such a long-duration productive asset in the region.

Lai Zhern Yung and Christopher Kwong, both former bankers and engineers, founded Okapi to address this pain point.

The startup’s proprietary platform connects clean energy investors with solar dealers, installers and EPCs (engineering, procurement, and construction) companies nationwide via an embedded financing and project management solution.

With its instant credit decisioning engine, Okapi empowers solar stakeholders to offer cash flow-positive leasing plans of up to ten years to homeowners at the point of sale. According to the startup, this mechanism eliminates all logistical and psychological barriers for households to access lower utility costs, thereby “significantly” reducing their greenhouse gas emissions and carbon footprint, while contributing to Malaysia’s Net Zero goal.

Since its launch, Okapi has established commercial partnerships with dozens of solar companies in Malaysia and targets to fund the installation of 100 residential solar energy systems per month by the first quarter of 2025.

Malaysia’s National Energy Transition Roadmap (NETR) has estimated that up to RM1.85 trillion of financing is required to meet energy transition targets by 2050.

Also Read: How The Radical Fund discovers, backs, spearheads climate-resilient ventures in SEA

“By sourcing competitive capital and investing in quality solar assets, Okapi removes barriers to residential solar adoption. Each installation generates 800-1,000 kWh monthly, accelerating the region’s renewable energy transition, cutting GHG emissions, and empowering Southeast Asia’s middle-income households to reduce utility costs and secure energy price stability,” said Alina Truhina, CEO and Managing Partner of The Radical Fund.

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Southeast Asia’s (SEA) economic development is at odds with the necessary climate trajectory. With rapid urbanisation, over 100 million people are projected to migrate to cities by 2030. While these urban dwellers will be an important catalyst for economic expansion, they will also be contributors to an unprecedented surge in energy demand — projected at a staggering 42 per cent increase anticipated over the next decade. 

The twin challenges of the built environment sector in SEA

The built environment is one of the planet’s most pollutive sectors. It currently accounts for approximately 39 per cent of global CO2 emissions. Despite the urgency to address climate change, obstacles persist. Escalating energy price volatility and rising interest rates hinder investments in building decarbonisation efforts.

As a consequence, the sector is veering off course from its decarbonisation pathway and is unlikely to reach net zero by 2050 without immediate and decisive action, The gap between actual climate performance and the necessary trajectory for decarbonisation continues to widen.

SEA is also particularly vulnerable to climate change, facing rising temperatures and sea levels. While decarbonising buildings toward net-zero emissions remains a significant challenge, the accelerating impact of climate change on our cities and homes is deeply concerning, including rising mean and variance of temperature, increased precipitation, humidity, wind patterns, and solar radiation.

Globally, April 2024 sets a new record as the hottest month ever recorded, marking the 11th consecutive month of unprecedented global warmth. The region’s extensive coastlines and low-lying areas make us susceptible to extreme weather events such as typhoons, floods, and heatwaves. These events pose threats to environmental degradation, exacerbate greenhouse gas emissions, impact economic productivity, and endanger human health and safety. The escalating temperatures drive excessive air-conditioning use, further contributing to global warming.

In Jakarta,  excessive groundwater extraction is causing the city to sink, prompting the government to relocate its capital. In Singapore, the government has established a US$5 billion fund to mitigate coastal erosion and flooding risks. The Philippines government’s Department of Environment and Natural Resources has also completed resilience roadmaps for 16 vulnerable areas to guide disaster risk management and climate resilience efforts.

Regulations and certifications in built environment space

Given the significant challenges related to decarbonisation and climate resilience faced by the built environment sector, SEA lacks mandatory building regulations, contributing to slow progress in decarbonising the built environment. However, the situation is gradually changing.

Green building certifications, such as the Green Building Index, Green Real Estate, Leadership in Energy and Environmental Design (LEED), and BREEAM are gaining traction. These certifications evaluate the sustainability attributes of buildings and provide recognition for environmentally responsible practices.

Also Read: Balancing act: Carbon Balance’s quest to tackle climate crises with tech-driven sustainability

They assess various criteria, including energy consumption, greenhouse gas emissions, water usage, waste management, and occupant health and well-being. Although these certifications are primarily voluntary, the demand for them is increasing for several reasons:

• Sustainability policy of tenants: Companies and individuals are increasingly aware of the environmental impact of their actions, leading to a rising demand for sustainable practices, including green buildings. This trend is particularly driven by global Fortune 500 companies, where institutional shareholders demand greater sustainability practices that trickle down to procurement functions when in search of real estate offices. Moreover, leading regional enterprises are also adopting these practices to attract institutional investors and retain their best employees.
• Availability of green loans: Building construction is a competitive and capital-intensive industry where access to affordable labour, materials, and financing is essential for profitability and success. The availability of green loans with lower interest rates encourages developers to construct new green buildings. The Malaysian government actively promotes green building investment through policies and schemes, such as the Green Technology Financing Scheme, which incentivises sustainable practices.
• Lower operating expenses: Potential savings from efficient operations serve as an attractive incentive for tenants. Heating, ventilation and air-conditioning (HVAC) and lighting make up 60-70 per cent of energy costs. Hence, energy-efficient designs, renewable energy sources and smart technologies in these areas can reduce utility bills for occupants in the long term. In an economic environment marked by high cost of capital and cost cutting, lower operating expenditures could better retain tenants.

Green buildings, certified by third parties, represent valuable assets and attractive business opportunities. They have the potential to generate higher revenue by attracting and retaining high-quality multinational clients.

Additionally, their lower operating costs, thanks to more efficient use of energy, and reduced cost of financing, drive further demand and innovation for building decarbonisation and climate resilience.

Therefore, it is no secret that such coveted certifications are highly sought after by real estate owners like Capitaland, Ayala Land and IJM Land. A portfolio of green buildings is now considered a compelling and fast-growing business segment. 

To be clear, they are not perfect either. According to a report “Seeing is Believing, Unlocking the Low-Carbon Real Estate Market” by Systemiq released in June 2024, it identifies two major issues with 3rd-party certifications and ratings:

• Inconsistency with decarbonisation pathways: Analysis showed that there is no clear correlation between certified assets and better energy performance, indicating potential gaps in these independent assessments. Many of these tools do not have a target that is consistent with 1.5 degrees Celsius pathways. 
• Lack of transparency on carbon and energy performance: Major certification bodies offer limited insights into how their building portfolio performs against energy use and carbon emissions. 

The implication is that such factors might be muting demand signals for low-carbon buildings, resulting in a lack of confidence to invest in truly sustainable buildings. However, this is changing and major certification bodies like LEED and BREEAM are updating their schemes to be more transparent and ambitious. While the progress is highly encouraging, there is still more to be done to be on track for the 1.5 degrees Celsius pathway. 

Decarbonising our building infrastructure

One critical area for achieving green building status involves reducing GHG emissions. These emissions from buildings can be categorised into two main aspects. 

Embodied carbon emissions

These are emissions resulting from the raw material extraction, production, supply chain and installation of building materials such as cement, glass and steel structures. New building projects are estimated to generate approximately half of their emissions from embodied sources. Strategies for decarbonising embodied carbon emissions include offering substitutes for raw materials and adopting green building products such as green cement and steel.

Notably, this opportunity is massive at some US$20-30 billion in Southeast Asia, requiring significant capital expenditure and working capital. Therefore, venture capital investments alone will not suffice; debt and infrastructure funds will be necessary.

Some startups innovating in this space include:

• Neocrete, a New Zealand startup, uses a proprietary additive to enhance concrete properties while reducing carbon footprint.
• CarbonCure injects recycled CO2 into concrete during the mixing process and repurposes buildings as carbon storage.
• H2 Green Steel is a Swedish startup that produces steel using hydrogen made from renewable energy instead of coal.

Despite their potential, these innovations currently come at a higher cost compared to conventional materials, necessitating further engineering and economies of scale to reduce costs for mass adoption.

Operating carbon emissions

These are emissions from building operations like energy consumption such as HVAC and lighting which collectively contribute to c.70 per cent of operating emissions. These operations contribute to the other half of emissions from the built environment. Decarbonising building operations presents a combination of asset-intensive and asset-light opportunities and represents a US$10-20 billion addressable market.

Also Read: On the sustainability of AI: Why measuring digital carbon emissions is key to a greener future

New HVAC systems such as district cooling require a significant upfront investment but there are also automation and optimisation software which can enhance the efficiency of traditional HVAC systems. Artificial intelligence and automation play enabling roles in enhancing real-time human comfort, optimisation and energy consumption efficiency.

Additionally, there is potential for creating carbon-negative operations such as the installation of solar panels on building surfaces using innovative photovoltaic technology to generate excess energy beyond immediate needs.

Notable homegrown startups in the region include:

• uHoo specialises in indoor air quality and temperature monitoring to measure various air quality parameters ensuring a healthy and comfortable environment.
• SensorFlow measures the energy consumption of boilers and chillers and correlates the measured consumption with heating and cooling demand.
• Solano Energy deploys new energy assets forming a distributed energy resource management system enabling every building owner to produce and store renewable energy.

Despite these innovative solutions, challenges related to incentives and financing remain during implementation.

Building for a new climate norm

As temperatures rise and extreme weather events become more frequent, we must rethink and enable the design of our built environment. Unlike decarbonisation, strategies to defend against climate catastrophes require a comprehensive approach involving a broader range of stakeholders and public-private partnerships.

• Policymakers: City officials, particularly in areas prone to climate disasters, must prioritise upgrading early warning and communication systems using digital infrastructure. Additionally, urban vegetation and improved water management strategies can help manage heat waves while enhancing coastal defences against rising sea levels. These measures not only protect communities but also improve urban liveability.
• Building Managers: Given prolonged heat waves in Southeast Asia, building managers will face increased cooling demands and peak loads. The implementation of energy-efficient cooling systems and the adoption of smart building technologies will be crucial in reducing energy consumption and maintaining occupant comfort.
• Construction companies and real estate developers: Architects and civil engineers should scrutinise new building designs and review existing material selection to withstand harsher environmental conditions. Project managers must also account for delays caused by extreme weather events, adjusting timelines and budgets accordingly.
• Insurers and Financiers: They need to prepare for more frequent natural catastrophes by incorporating new longitudinal climate data into their underwriting frameworks. National grants may also be made available for disaster management and relief support for affected communities

These are a new set of challenges that come with climate change. Fortunately, there are already startup founders with long-term vision who have been already working on these problem statements to tackle such opportunities.

• Komunidad harnesses the power of data and analytics to help enterprises and governments tackle the risks of climate change.
• Nafas provides businesses with a flexible & data-driven way to provide healthy air quality to their employees and customers against low air quality.
• IBISA’s parametric insurance offers end-to-end resilience to protect businesses and communities against climate change-induced natural catastrophes.

It is essential to recognise that not all climate adaptation opportunities in the built environment are suitable for venture capital investments. Nature-based projects, such as urban vegetation and mangroves, play a crucial role in defending against extreme heat and coastal erosion. Infrastructure developments, like coastal walls and drainage systems, are equally important.

Professional services, such as innovative building designs and material selections by architects and civil engineers, contribute to the total solution universe but may not align with climate venture capital investments.

How VCs are catalysing innovation

The increasing prevalence of green buildings and challenges of climate change are opening up vast opportunities for sustainable innovation within the built environment sector across all areas like, 

• Embodied carbon emission
• Operating carbon emission
• Re-thinking building in a new climate norm

Also Read: Meet the 4 SEA startups of PepsiCo’s climate tech accelerator programme

Consequently, this sector is drawing substantial venture capital investments to capitalise on this trend. For example:

• Proptech and real estate VC fund Fifth Wall had closed US$500m for its 1st climate fund in 2022, underscoring the sector’s potential impact on climate solutions.
• Australia’s proptech manager, Taronga Ventures, had closed US$170m to focus on the ESG space, far exceeding its original target of US$50m. Their commitment highlights the growing interest in sustainable real estate solutions. 

There is also no lack of successful startup stories:

• Brimstone was selected by US DOE for an up to US$189m award to build a commercial-scale facility that will demonstrate the start-up’s novel technology at scale for the very first time.
• Closer to home, Accacia, an India-based decarbonisation platform for real estate and infrastructure, has closed a US$6.5m Pre-Series A round from Illuminate Finance, Accel and B Capital.

These opportunities coupled with strong macro and ESG tailwinds in Southeast Asia meant that the built environment will be one of the focus areas for our fund. Some of the key themes that are explored (non-exhaustive) may include:

• Digitalisation: Deploying next-generation software to supplant outdated systems like building management systems.
• AI-led optimisation and analytics: Empowering building managers to leverage AI for heightened energy efficiency, minimised waste, and optimised resource utilisation.
• Material innovation: Introducing novel sustainable materials, including cooling-effect paints, transparent solar panels as glass substitutes, and carbon-negative cement.
• Resource management: Covering critical areas such as energy storage, waste stream processing, indoor air quality and water conservation.
• Hardtech: Investing in hardware advancements, including sophisticated sensors, IoT devices and solar panels to revolutionise the built environment. 

Challenges in adopting innovative solutions

While clear problem statements, compelling business cases, and available solutions are essential, they do not always guarantee swift adoption in the built environment sector. This industry is notorious for its slow-moving momentum, which can be frustrating for startups and investors.

Some of the challenges include:

• Legacy challenges: Many existing buildings and infrastructure operate on legacy systems. Integrating these systems seamlessly with new technology can be challenging. Retrofitting old buildings often proves to be more expensive than constructing new ones, especially in high-cost markets like Singapore—even after accounting for carbon emissions.
• Lack of/inconsistent regulation: Inconsistent and unclear policies across the region hinder the creation of a robust incentive or penalty framework. Such a framework is crucial for accelerating the adoption of new technologies. Without regulatory alignment, stakeholders may hesitate to invest in innovative solutions.
• Lengthy adoption cycles: Building materials like concrete and steel are critical for structural integrity. Replacing these conventional materials requires extensive testing to ensure strength, workability, and durability. Consequently, implementation cycles can become lengthy, delaying the adoption of alternative materials.
• Economic challenges: Many new solutions haven’t achieved the economies of scale necessary to compete with conventional materials in terms of cost. HVAC upgrades, for instance, are typically planned well in advance, leaving little room in the budget for exploring alternatives beyond fixed-asset schedules.
• Lack of awareness: Stakeholders, ranging from building owners to occupants, may not fully grasp the benefits of green solutions or be aware of the available options. Some sustainable solutions are perceived as risky or unproven. Demonstrating their reliability and effectiveness is crucial for overcoming this perception.

In navigating these challenges, collaboration among industry players, policymakers, and investors is essential. By addressing these roadblocks collectively, we have a better chance to accelerate the adoption of innovative solutions and create a more sustainable built environment.

Partnership for win-win with Keppel

Given the aforementioned challenges and the nascency of the sector, The Radical Fund has partnered with Keppel Real Estate Group to tackle decarbonising the built environment sector. A division of Keppel Corporation, Keppel Real Estate is a global asset manager and operator with expertise in sustainability-related solutions across infrastructure, real estate, and connectivity.

It has been recognised for delivering innovative urban space solutions that leverage technology to create sustainable and customer-centric developments. Their commitment to building responsibly and sustainably is evident in their approach to creating real estate solutions that mitigate climate change and enhance lifestyles and businesses.

The firm recently closed a US$1.7 billion sustainability fund to upgrade existing assets and invest in value-add platforms that create greener cities and work to reduce the negative impact of climate change. 

Keppel Real Estate’s strong capabilities and deep experience in the area of real estate, its sharp focus on sustainability and its captive portfolio of commercial and industrial real estate assets offer a compelling green lane to test bed and pilot the solutions of our startups.

Together, we aim to accelerate the adoption of cutting-edge technologies that address climate-related challenges while establishing a foundational proof-of-concept to scale promising solutions relevant to the real estate development and built environment sectors. We are also actively partnering with co-investors and debt providers to catalyse climate innovation in SEA. 

The Radical Fund is seeking business models that are capital-light while delivering a twin strategy of scaled commercial and climate impact. Please reach out to us for feedback or comments regarding the built environment industry in Southeast Asia or share your startup here.

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The humanoid robot sector is at a transformative juncture, driven by rapid advancements in artificial intelligence and robotics. This dynamic field is not only growing in size but also in complexity and influence across various industries.

Humanoid robots: A new era of industry integration

Humanoid robots, characterised by their human-like form and advanced capabilities, are becoming indispensable tools in industries ranging from healthcare to manufacturing. Their ability to perform tasks with high precision and autonomy is reshaping traditional workflows and opening new avenues for innovation.

This is particularly evident in sectors where human-like interaction and adaptability are crucial, such as healthcare and education. For instance, robots like PEPPER and NAO are enhancing patient care and educational outcomes by providing emotional support and interactive learning experiences.

Technological advancements driving the sector

The integration of AI into humanoid robots has been a game-changer, enabling these machines to perform complex tasks that require cognitive abilities and decision-making skills. The use of Large Language Models (LLMs) and Visual-Language Models (VLMs) has significantly enhanced the cognitive and interactive capabilities of these robots.

Also Read: How to revolutionise the banking and finance industry with Robotic Process Automation

Our research indicates that advancements in AI and sensor technology are pivotal in making humanoid robots more autonomous and versatile, allowing them to adapt to and learn from their environments.

Market dynamics and investment opportunities

From a venture capitalist’s perspective, the humanoid robot market presents a compelling investment opportunity. The sector is witnessing substantial growth, with Asia leading the way in adoption and development.

Significant investments from countries like Japan, South Korea, and China are driving innovation and setting the stage for global market leadership. According to our research, the humanoid robot market is estimated to be worth approximately US$3-5 billion as of 2024, with projections indicating even greater expansion in the coming years.

The humanoid robotics sector has already attracted significant investment, demonstrating strong confidence from both strategic and venture capital investors.

Notable funding highlights include:

• Figure: Raised US$675 million in a Series B round from prominent investors including OpenAI, Nvidia, Microsoft, Bezos Expeditions, and Samsung Ventures. This funding underscores the market’s potential and the confidence major tech players have in the sector’s growth.
• Sanctuary AI: Secured investment led by Accenture Ventures, contributing to its approximate valuation of US$300 million. Sanctuary AI’s focus on creating versatile, autonomous humanoid robots is driving significant interest.
• UBTECH: Achieved a valuation of US$10 billion following its IPO on the Hong Kong Stock Exchange. UBTECH’s focus on integrating advanced AI and robotics for consumer and industrial applications is a key driver of its market valuation.
• 1X: Raised US$100 million in a Series B round led by EQT Ventures, highlighting the ongoing investment in innovative robotics companies aiming to enhance efficiency and safety in various environments.
• Boston Dynamics: Known for its advanced mobility and balance capabilities, Boston Dynamics was acquired by Hyundai for approximately US$1.1 billion, demonstrating the strategic importance of robotics in industrial applications.
• Agility Robotics: Raised US$170 million in a Series B round to further develop its Digit robot, which is designed for package delivery and logistics.

These investments highlight the strong momentum within the humanoid robotics sector and the substantial financial backing that key players are receiving to drive innovation and market growth.

Opportunities for startups and industries in Southeast Asia and Taiwan

The wave of humanoid robotics and the influx of investments present a unique and timely opportunity for startups and industries in Southeast Asia and Taiwan. These regions are rapidly becoming hotbeds for technological innovation and entrepreneurship, supported by strong governmental policies, a thriving startup ecosystem, and significant investments in tech infrastructure.

Also Read: AI revolution: Balancing human empathy and robotic efficiency in customer service

For Southeast Asia, the adoption of humanoid robots can drive productivity and efficiency across various industries, from manufacturing to service sectors. Countries like Singapore, Malaysia, and Thailand are well-positioned to leverage these technologies to enhance their industrial capabilities and competitiveness on a global scale.

Additionally, the region’s young, tech-savvy population and growing consumer market make it an attractive ground for developing and deploying humanoid robotic solutions. Looking over to Taiwan, with its robust semiconductor industry and strong technological base, plays a crucial role in the development and manufacturing of advanced robotics components.

Synergies and collaborative potential

The collaborative potential between Southeast Asia and Taiwan is immense.

By combining Taiwan’s technological expertise with Southeast Asia’s diverse market needs and dynamic startup environment, there is a significant opportunity to drive innovation and create scalable solutions. Joint ventures, research partnerships, and cross-border investments can catalyse the development of humanoid robots, making the region a global leader in this transformative field.

At Hive Ventures, we are committed to supporting these synergies and fostering collaborations that leverage the strengths of both regions. By bridging the gap between technology and market application, we can accelerate the adoption of humanoid robots and unlock new opportunities for startups and industries across Southeast Asia and Taiwan.

Future outlook: A vision for 2035

Looking ahead, the next decade will be crucial for the humanoid robot industry. Achieving economies of scale and reducing prices to the US$20,000 – 150,000 level will be key to driving mass adoption.

At Hive Ventures, we believe that by 2035, the humanoid robot market could generate substantial revenue, with applications expanding into consumer markets and beyond.

The integration of generative AI technologies will further enhance the cognitive capabilities of these robots, making them indispensable companions and helpers in various settings.

Final thoughts

The humanoid robot sector holds immense promise, with the potential to revolutionise industries and enhance human-machine collaboration. As venture capitalists and industry observers, we are excited about the opportunities and advancements in this space.

Our research at Hive Ventures underscores the transformative potential of humanoid robots and the critical role they will play in shaping the future of technology and industry. We are committed to supporting and investing in this innovative sector, anticipating a future where humanoid robots become a ubiquitous part of our daily lives.

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Indonesia has emerged as a significant force in the global business scene in recent times, establishing itself as a prominent player not only within ASEAN but also on a broader scale, driven by a population exceeding 270 million and a rapidly expanding middle class. Supported by a government committed to fostering entrepreneurial endeavours, the region’s business environment is undergoing notable changes. Programmes like the 1000 Startup Digital Initiative and Indonesia Investment Fund demonstrate this commitment by setting ambitious goals to stimulate the establishment of new digital ventures.

Aligning with this growth trajectory witnessed by the regional tech startup landscape, Echelon X was recently held last May 15-16 at the Singapore EXPO, offering attendees access to a wide array of benefits. This includes access to valuable market insights, growth initiatives, a marketplace for digital solutions, programs facilitating market entry, enhanced brand reputation and visibility, and an opportunity for dynamic innovators from the region to come together, interact, and foster collaboration.

Also read: Uncovering the secret behind Fonos’s unprecedented growth

Joining the many up-and-coming and established companies from across the global tech ecosystem in Echelon X is Telkomsel Ventures. Most notably, Telkomsel Ventures spearheaded a roundtable discussion on “Collaborative Innovation Models: Strategies for Effective Corporate-Startup Partnerships” which was attended by over 100 companies and organisations including WeWork, Invest Hong Kong, Vinova, TAPPI Global, and ArmourZero, among many others. Additionally, Mia Melinda, Telkomsel Ventures’ CEO, delivered a talk entitled, “Driving Impact: Corporate Venture Capital and the Future of Tech Innovation in Indonesia,” during a fireside chat moderated by Devina Mardiputri of e27.

Being the corporate venture arm of Telkomsel, Telkomsel Ventures invests in promising startups, helping them grow by leveraging Telkomsel’s extensive ecosystem, resources, and expertise. Complimenting their forecast on future trends, Telkomsel Ventures relies on visionary founders to reveal what lies ahead. Through the productive discussions, Telkomsel shared key insights regarding the important emerging trends in the region.

Indonesia’s burgeoning venture capital landscape

The financing landscape in Indonesia is diverse, mirroring the country’s rich diversity. Venture capital plays a prominent role, offering not just financial support but also strategic guidance and access to valuable networks essential for business expansion.

Both global giants like Sequoia Capital and local players such as East Ventures have made significant investments in promising Indonesian startups, covering a wide range of sectors from fintech to eCommerce.

Despite facing recent challenges following a boom in global venture capital funding in 2021 – 2022, Indonesia remains a beacon of hope in the regional venture capital scene. Favourable market conditions helped sustain VC deal values in Indonesia in 2022, holding steady compared to global markets which experienced declines of 20% to 40%. Moreover, there was a notable increase in deal volumes, particularly in early-stage opportunities, indicating growing investor interest. Another positive aspect is the diverse mix of international and local investors participating in the Indonesian VC market, with locally focused investors gaining a stronger foothold in recent years.

Exciting innovations in and out of Indonesia that venture builders are looking to support

Venture builders, also known as venture studios, company builders, or startup studios, are specialised entities that transform disruptive ideas into groundbreaking startups with commercial potential. While the concept of a venture builder is relatively novel, the idea of corporate spin-offs and the commercialisation of industry intellectual properties has been practised for a long time. For young start-ups, venture builders are seen as having lower risk and requiring less commitment. They are more adaptable and willing to pivot and reallocate resources among various projects, attracting entrepreneurs who wish to gain broader exposure to entrepreneurship rather than dedicating themselves to a single venture.

Also read: Leveraging technology to create uniquely human experiences

Within Indonesia and the neighbouring regions, exciting opportunities have arisen from budding new ventures born out of new innovations. Southeast Asia’s technology startups are projected to achieve an impressive valuation of $1 trillion by 2025, a significant increase from $340 billion in 2020. Indonesia, the region’s largest e-commerce market, holds nearly half of the market share. 

Sharing about the hottest industry trends and development initiatives within Indonesia supported by Telkomsel Ventures, Mia Melinda emphasised, “For Telkomsel Ventures, we focus on aligning with our corporate needs through three pillars: digital lifestyles, digital enablement, and emerging technology. Although Telkomsel is a telecommunications company, we aim to provide more than just connectivity by offering additional value to our customers.”

Melinda added, “According to a global consultant’s recent survey, post-COVID, executives now prioritise building new businesses, with artificial intelligence being the top focus, followed by sustainability, and direct-to-consumer (D2C) strategies. While D2C saw a peak during the pandemic due to the need to maintain customer connections, it now ranks third in priority after AI and sustainability.”

Upcoming opportunities and challenges for Indonesia’s tech ecosystem

Foreseeing a captivating outlook for the region and Indonesia’s tech ecosystem, global tech giants have flocked to the region in search of new business opportunities. For instance, Microsoft has recently unveiled plans to invest US$1.7 billion over the next four years to enhance cloud and AI infrastructure in Indonesia. This investment will also include AI training opportunities for 840,000 individuals and support for the expanding developer community in the country. Nevertheless, there are also challenges that should be considered further to develop the technology-driven industries and venture capital community.

Sharing her thoughts on these topics, Mia Melinda expressed, “In terms of challenges, investing in innovations comes with a high degree of uncertainty, requiring thorough risk assessments and mitigations. Traditional methods, which rely on predicting the probability of risks in various criteria, often fall short when dealing with the unpredictable nature of new ventures. We need to embrace plural scenarios and conditional situations, acknowledging our limited knowledge and the inherent uncertainty in investment decisions.

Also read: Fostering inclusion: AI’s role in SEA’s education sector

Furthermore, the governance process in corporate venture capital can be lengthy and complex. However, founders who seek strategic synergy with corporations are often willing to navigate this process, understanding the long-term benefits of having robust governance in place as their businesses grow and scale.  To help bolster our impacts in the tech landscape in the country, we also aim to foster better cultural integration between corporations and startups, promoting collaboration and positive cultural assimilation within the company.”

To learn more about Telkomsel Ventures and its projects, please visit its website: www.telkomsel.vc

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This article is produced by the e27 team, sponsored by Telkomsel Ventures

We can share your story at e27, too. Engage the Southeast Asian tech ecosystem by bringing your story to the world. Visit us at e27.co/advertise to get started.

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Direct market access (DMA) is a highly effective tool for institutional investors because it removes areas of friction caused by using needless middlemen and brokers. Instead, embracing DMA means exchanges can be directly accessed and orders placed in a fraction of the time. 

The beauty of DMA is that the approach can facilitate trading for any stock exchange or security that’s tradeable on exchanges. This means that institutions can find efficiency across a number of equities, fixed-income securities, derivatives, or just about any other financial asset. 

Time is of the essence when it comes to frictionless trading, and it’s only through DMA that institutions can execute the right trades at the right time to capture opportunities ahead of their rivals.

So, how can institutional investors create an efficient and sustainable DMA strategy? Let’s take a deeper look at five essential steps to take in order to achieve direct market access success:

Uniting DMA with algorithmic trading

Because direct market access excels in removing the barriers to trading for institutional investors, it offers the best level of efficiency when coupled with high-quality, fast-paced algorithmic trading tools. 

This means that ambitious institutions should seek out a functional DMA portal provider that offers quick instrument requests, corporate action management, and downloadable configuration files to help optimise efficiency throughout trading strategies. 

In choosing prime services that feature globally positioned trading servers and locally connected pricing structures with data vendors for real-time quotes, it’s possible for institutions to unite their DMA with high-frequency trading (HFT) and functional algorithmic trading platforms to capitalise on opportunities faster without the threat of losing valuable time against competitors. 

Also Read: Southeast Asia’s marketing renaissance: How up-and-coming marketers are leading the charge

Lower latency pricing can be a great asset when connecting DMA and Expert Advisors (EA) without having to worry about slippage or other factors that could hinder the effectiveness of results.

Utilise the transparency of order books to shape decisions

Order books are invaluable tools when it comes to gaining insights into market dynamics. However, the analysis of data can often make it difficult for institutional investors to extract clear insights in a landscape where time is literally money. 

When using order books, institutional investors can learn an asset’s liquidity by exploring its bid-ask spread. It’s also possible to explore the depth of the order book to understand the level of buying and selling interest regarding a specific asset. 

Traders are capable of using the data within order books to identify trends and explore possible trading signals. For instance, if an asset is receiving a higher volume of bids at a specific price level, it’s reasonable to expect it to climb higher. Likewise, if the ask side is heavily populated at a price level, investors can interpret it as a sell signal. 

Order books are becoming more accessible through integrated trading platforms and even smartphone apps today, making it easier than ever for institutions to access essential market insights. 

Conforming to compliance

Direct market access poses its own set of compliance requirements for institutional investors, and their adherence will be essential in building a functional and efficient trading strategy. 

When using DMA, it’s important that supervisory controls and procedures are continually tested in order to obtain the necessary CEO certification from FINRA. This certification is audited annually and pertains directly to risk management and compliance with the safety of the markets. 

It’s the responsibility of broker-dealers to ensure that their DMA services are well-tested and possess the required certification. 

With this in mind, it’s essential that any DMA used is fully compliant at all times to keep on top of regulatory scrutiny from the likes of FINRA and the Securities and Exchange Commission (SEC). It’s with this in mind that choosing the right DMA requires necessary due diligence, and low-cost options can come with both regulatory risks and possible security threats.

Following the direct market access rule

Any institutions engaging in DMA should also be aware of the direct market access rule set out by the SEC. This rule requires broker-dealers to implement the necessary risk controls for market access. 

The Direct Market Access rule means that any broker or dealer that has market access or any entity that offers a customer or other party access to an exchange through the use of its MPID is required to comply with the rule. 

This rule applies to trading in all securities, exchanges, or ATS, including equities, options, exchange-traded funds (ETFs), debt securities, and security-based swaps. 

While much of the rule focuses on provisions made by broker-dealers to offer compliant market access, it also makes stipulations that can be vital for institutional investors and securing efficient market practices. 

For instance, the rule states that it’s entirely possible to incorporate risk management tools or technology provided by a third party that’s independent of the customer, provided that it has direct and exclusive control over those tools or technology and is fully compliant. 

Also Read: Unlocking email marketing success: 5 foolproof tips every startup must embrace

This means that it’s entirely possible for DMAs to vary from different broker-dealers, and their proposition can have different ramifications for efficiency and compliance. With this in mind, it’s worth researching the available DMA options to see whether one tool offers a greater range of compliant integrations to improve access and latency.

Learn the intricacies of DMA and OTC trades

No, direct market access isn’t like over-the-counter (OTC) trading. The intricacies of the two approaches are important for institutional investors to take on board. 

Crucially, DMA places trades directly on an exchange, while OTC trading occurs outside of exchanges and directly between the appropriate parties. 

Because it focuses on trading via exchanges, DMA offers considerably more transparency, liquidity, compliance, and more competitive pricing than OTC trading, but it’s worth taking the time to research the relevant perks of each approach. 

For instance, some institutions prefer OTC trades because commission is instantly factored in and it can be easier to track profit and loss due to operating through a single party. 

However, a major issue with OTC trading stems from counterparty risk and reliance on chosen parties to fulfil their commitments when trades are placed. 

Building a sustainable DMA strategy

As institutional trading becomes ever-competitive, more traders are looking to DMA as an option to secure frictionless market access in a low-latency environment that’s fully compliant with necessary regulatory requirements to leverage a sustainable strategy. 

With the technology entering the industry becoming increasingly effective, incorporating these innovations into DMA strategies without slowing execution times down will be essential. 

As the market continues to grow, the range of powerful options at the disposal of institutions will only grow, so it’s worth conducting the appropriate research and utilising prime services that can offer meaningful direct market access that meets the ambitions of the institutions looking to achieve their potential.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.

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Malaysia’s economy has witnessed steady growth in recent years, yet the challenge of stagnant unemployment rates persists, posing a critical concern for policymakers and businesses alike. As the country strives for economic prosperity and workforce stability, Malaysian companies play a pivotal role in addressing this issue.

Despite Malaysia’s unemployment rate remaining at 3.3 per cent, Malaysian companies and the government have taken the first steps to reduce the number of unemployed by introducing initiatives in the business and gig economy. Initiatives such as JaminKerja, are created to increase job opportunities for the unemployed, targeted towards local workers.

The gig economy has emerged as a prominent force and solution, offering both opportunities and challenges for companies and workers alike. Based on a study by the Employees Provident Fund (EPF), it is estimated that gig workers will account for 40 per cent of employed workers in Malaysia within five years, twice the global average.

Additionally, the widespread use of smartphones and the availability of high-speed internet has made it easier for individuals to access gig platforms leading to a boom in the gig economy, with the local gig economy being valued at RM1.33 billion (approximately US$281.54 million).

The gig economy also offers flexibility during work, not normalising the usual business hours but providing workers with the ability to choose when, where, and how much they work, allowing them to balance work with personal commitments or to pursue multiple gigs simultaneously.

Also Read: Malaysian golf course booking platform Deemples nets US$2M from V Ventures

Despite the gig economy thriving, there are still several challenges that the gig economy poses that need to be addressed. In this article, we will delve into the current limitations of the gig economy and how Malaysian companies aim to solve these challenges.

The downsides of working in the gig economy

There are around 2.2 million documented migrant workers in Malaysia, with the majority of them being in the gig economy as it is difficult for unskilled workers of foreign nationality to obtain a full-time working job. Most migrant workers are satisfied with the minimum working conditions in Malaysia. In contrast to their country of origin, Malaysia is considered to be hospitable with a decent standard of living. 

Malaysia also relies heavily on foreign workers, with the labour industry having the highest demand for them. The reliance on foreign workers causes a lack of job opportunities for Malaysian workers as foreign workers are viewed as a cheaper option compared to their domestic counterparts. Therefore, companies in Malaysia prioritise hiring foreign workers for gig economy work.

The gig economy also has its limitations, affecting both foreign and domestic workers which include:

Lack of job security

Gig workers often face uncertainty and instability in terms of job security. They may experience periods of inconsistent income, limited access to benefits such as health insurance and retirement plans, and vulnerability to changes in demand or market conditions.

Gig workers are vulnerable to market changes, shifts in demand and economic downturns. Changes in consumer behaviour, technological advancements, or industry disruptions can directly impact gig workers’ ability to secure work opportunities and maintain a steady income.

Limited access to benefits

Gig workers often do not have access to the same benefits as traditional employees, such as health insurance, paid leave, retirement plans, and worker’s compensation. This lack of benefits can significantly impact gig workers’ financial security, well-being, and quality of life.

The absence of benefits and protections can contribute to income instability for gig workers. Without benefits such as unemployment insurance or worker’s compensation, gig workers may face financial challenges during periods of unemployment, injury, or unforeseen circumstances.

Skill underutilisation

Gig workers may not always have the opportunity to fully utilise their skills and expertise in gig assignments. They may be assigned to repetitive or low-skilled tasks, limiting their potential for career advancement and skill development.

Furthermore, the lack of proper certification for gig jobs in the plantation sector prevents workers from earning a higher pay rate. Without recognised certifications, gig workers in plantations struggle to demonstrate their skills and value, leading to lower compensation and fewer opportunities for professional growth.

Local workers who work in the gig economy will then miss out on the opportunity to learn the necessary skills to adapt to other gigs that may require different skills, limiting the workers to only work in gigs that require common skills.

The future of the gig economy leverages employment opportunities 

A crucial aspect of the gig economy’s growth is the correlation of supply and demand dynamics, streamlined by the advent of online platforms and digital recruitment agencies. These platforms diminish the barriers typically encountered in traditional job markets, facilitating efficient connections between gig workers and employers. 

Also Read: Can co-working spaces change Malaysia’s work habits?

The gig economy is reshaping the traditional business hiring model. Employers are increasingly drawn to gig workers for their ability to offer specialised skills not readily available in-house. In a job market increasingly shaped by technological advancements and global connectivity, soft skills have emerged as a critical differentiator for both job seekers and employers. The emphasis on soft skills has never been greater as it is an essential skill that sets candidates apart and contributes significantly to workplace goals. 

The Malaysian government themselves are also taking a proactive approach to nurturing the gig economy, exemplified through various initiatives, ranging from building digital skills and improving the regulatory framework to expanding social protection. For example, Malaysia Digital Economy Corporation’s (MDEC) Global Online Workforce is to equip Malaysians with the necessary skills to excel in the digital freelance marketplace.

The gig economy can prove to be the solution to reduce the stagnant unemployment rate that the country has been plagued by. Through various channels such as job portals, digital recruitment agencies, and government initiatives, it is imperative that candidates are provided with upskilling aid by corporate bodies to boost the development of the country’s employment sector.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.

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