Southeast Asia’s Tech Ecosystem Enters Cross-Sector Expansion Phase
Malaysia’s Ministry of Science, Technology and Innovation (MOSTI) has positioned 2026 as a pivotal year for transitioning innovation “from lab to livelihood,” with technology commercialization and regional hub strengthening as core strategies. In a recent interview, Minister Chang Lih Kang revealed that as technology adoption accelerates across Southeast Asia, Malaysia is poised to establish itself as a regional innovation connector.
2025 Performance: Commercialization Value Exceeds MYR150M
Throughout 2025, MOSTI demonstrated the tangible economic impact of Science, Technology and Innovation (STI) investments under the principle of “Democratizing Science, Humanizing Technology, and Mainstreaming Innovation.” Through the National Technology and Innovation Sandbox and targeted commercialization programs, the ministry generated over MYR150 million (approximately $38 million) in commercialization value, while recording technology exports exceeding MYR200 million (approximately $50.7 million) across priority sectors including advanced manufacturing, health technology, agri-innovation, and digital solutions.
Malaysia maintained its position in the top tier of innovation-driven economies according to the Global Innovation Index (GII). Through ASEAN-level initiatives, more than 10,000 startups were onboarded onto regional platforms, expanding market accessibility and investor networks. Notably, over one million Malaysians participated in STI programs through Techlympics, innovation challenges, and digital skills initiatives, strengthening the national talent pipeline from education to industry.
2026 Strategy: ‘Raise the Ceiling, Raise the Floor’
Minister Chang outlined his 2026 vision with the motto “Raise the ceiling, Raise the floor,” emphasizing that every ringgit invested in STI must translate into job creation, industry strengthening, and improved quality of life. This aligns with Malaysia’s MADANI vision, embodying the philosophy that innovation should be inclusive, sustainable, and people-centric rather than exclusive.
The 2026 strategy centers on three key priorities. First, accelerating commercialization and deployment. To ensure that R&D progresses beyond publications and prototypes, enhanced commercialization funding, industry collaboration, and regulatory support will drive real-world technology adoption across healthcare, food security, energy transition, and smart manufacturing.
Second, strengthening talent and skills for an innovation-driven economy. Talent development programs will expand across AI, deep tech, data science, and future technologies, collaborating with universities, industry, and regional partners to ensure Malaysian talent remains competitive both domestically and globally.
Third, positioning Malaysia as a regional STI connector. Building on ASEAN-level platforms and cooperation, cross-border collaboration, market access, and investment flows will be supported to help Malaysian innovators overcome geographical limitations.
Southeast Asia Tech Outlook: Cautious Optimism
Minister Chang characterized the 2026 Southeast Asian tech ecosystem as “cautiously optimistic but full of opportunities.” Malaysia and Southeast Asia are entering a phase where technology adoption is accelerating across sectors including digital government, smart cities, green transition, and advanced manufacturing.
Malaysia holds a strong position within this regional ecosystem, supported by a growing pool of skilled talent, supportive policies, and an increasingly connected startup and innovation network across ASEAN. Through platforms that improve visibility, deal flow, and collaboration, Malaysian startups and technology companies are better positioned to scale regionally.
However, success in 2026 will depend on the ability to develop talent, build trust in emerging technologies, and ensure inclusive growth. MOSTI’s role is to ensure the tech ecosystem grows not only in size but in quality, impact, and sustainability, contributing to shared prosperity for Malaysia and the region.
