Malaysian Technology Development Corporation (MTDC) talks about a trait that it is good at – forging business partnership for companies under their wings. Here Dr Zainul Fadziruddin Zainuddin, Director, Office of CEO shares his thoughts with The Petri Dish’s Shamira Shamsuddin.
Define partnership in business.
Business operation between two or more individuals who share management responsibilities, risks and profits is called business partnership. But there is no single model for partnerships. It could be a collaboration between different entities to work towards a common goal e.g, providing a solution to a client. Business partnership is a traditional practice.
For example, a large building construction will require several entities of different skill sets and services to work together to complete the construction of a building orchestrated by the architect. Similarly, no single entity may have expertise in all the 9 pillars of I4.0 and therefore may need to work together orchestrated by a systems integrator.
Are there changing landscape in the way partnership are formed in today’s business world, especially in the era of Industry 4.0 (I4.0)?
In a sense no, but perhaps in another sense yes, especially involving small technology companies that cluster together into “communities” and assist each other to execute a job.
There are challenges in forging partnership as it entails sharing of profit, IP and developing a viable business model. How does MTDC support companies in these areas?
Firstly, MTDC assist companies in its ecosystem to strengthen their knowledge and skills through training and advisory/mentoring programmes run by the MTDC Technopreneur Training Academy (TENTRA). There are mandatory courses (e.g. governance, financial, business model canvas etc) and optional courses that are crafted for different stages of a company’s growth as well as general upskilling courses. In addition, we also follow up with bespoke advisory/ mentoring sessions that address specific problems.
For example, one of the companies under our wing, entered into partnership with a university to commercialise their IP. The licensing fee and royalty was negotiated between the two partners, but the final agreement did not reflect what the company agreed. Upon MTDC’s intervention, the partnership was negotiated amicably and the final agreement that favoured both parties were derived at.
Newer companies typically needs other assistance in design and purchase of processing equipment. This is where MTDC can assist by using the expertise from our external partners. More matured companies are able to manage these issues themselves with minimal assistance from MTDC. However, they may require assistance in other aspects of business such as meeting regulatory bodies or other government agencies
How do you make sure the partnership functions in a synergist fashion?
Usually the companies themselves work this out as they know the best ways to complement each other’s strengths; otherwise they wouldn’t form the partnership in the first place. MTDC monitors the progress and offers help and services when needed.
What are the common challenges to develop a great partnership? What makes and breaks a partnership?
The first thing is that partners must truly share a common goal right from the very beginning. The second is that the parties must each pull their own weight in trying to reach that goal. Third, I think is to have a good communication channel between all parties. A common problem is when one partner suddenly loses interest and starts chasing something else leaving the other partner to carry all the weight of the work. Having a good communication channel might help identify problems from the start and address them. In cases like this MTDC tries to settle the issues between the partners. However, often time the best we can do is to help find alternative pathways to resolve the issues such as finding a more compatible partner.
How does foreign partnership benefit local business?
Foreign partnerships are best at bringing new technologies not available in Malaysia or vice versa. Foreign partnerships will help open up international markets for our local companies and in particular, help negotiate with the local business regulatory agencies and other entities such as financial institutions that play important roles in supporting the business in the host country.
What does MTDC do to engage foreign partners for our local companies?
We do that through a number of ways. MTDC is engaged by other agencies such as the Ministry of Foreign Affairs under its Malaysian Technical Cooperation Programme (MTCP) to train other developing countries from many parts of the world in commercialisation of research. Very often we bring our companies as speakers so that they can network and create potential business leads. There are many such platforms for local companies, such as local business events and also events that take place abroad.
MTDC also has strong networks with foreign business organisations or embassies of foreign countries and is involved with business matching activities. For example, MTDC co-sponsored the Malaysian Robotics and Automation Society’s (MyRAS) business matching event for several Korean robotics companies when they were in Kuala Lumpur recently. We also attend dialogues in various countries and we are on constant lookout for opportunities for companies in our ecosystem.
Give some examples of MTDC’s success stories in matching partners in business.
There are numerous examples of this. We have matched Symbiosis companies with technology providers and this has resulted in a number of start-up companies; a company making biodegradable solvent has signed up a distribution agreement with a Turkish company that we introduced; we introduced a small fund recipient company whose expertise is in IOT devices and other electronics to a much larger fund recipient companies providing integrated automation and IOT solutions and these two companies are now in discussions; and a F&B company needed to ramp up their production by acquiring a retort technology, an area they did not have expertise and MTDC matched with a suitable partner that has led to R&D collaboration.
Another example that we are proud about is a small fund recipient company involved in machine vision that we introduced to a public listed investee company some years ago. Upon mentoring by the public listed company, the small company is now in the process of getting itself listed.