Business Circle

That’s the only way to get the private sector to spearhead growth and lead the charge towards higher income.

One of the complaints that we regularly get about our economic transformation is that the Government is too heavily involved in business; it has too many Government linked companies and that these companies are being given preference over others.

Government must reduce its involvement in business and allow the private sector to take the lead.

We are repeatedly told that the Government must roll back on its involvement in business and it must allow the private sector its rightful role in business and the overall development of the economy.

The bottom line is that under the New Economic Model, we agree to deal with these issues. We agree that the Government must focus on its role as policy maker and/or regulator and that it should not get involved in ventures where it has no business to be in and which the private sector can undertake better.

In fact, it is a key part of our strategy towards becoming a developed country with a high income that the Government reduce its role in many areas and pass it on to the private sector.

The private sector will be the key driver of growth with an estimated 92% of investments up to 2020, our target year to achieve high income and developed country status, coming from there.

We are serious about reducing Government involvement, especially in business, but are often disappointed that people out there don’t realise that we are serious about it. That gives us a case of the blues sometimes but we will continue to do what we have to.

Having said that, we must simultaneously emphasise that we cannot have total non-involvement of Government in business. We need the Government to come in under a number of different circumstances. We have identified four. They are:

1.     Private investor needs co-investor. This is when the Government needs to provide some capital to get the project going. Examples include corridor development, land reclamation and large destination resorts. Operations can be run by the private sector.

2.     Businesses that need to be domestically owned. Examples are defence procurement and production of paddy to ensure food security. The Government will continue to own these projects.

3.     When large growth capital is required, catalytic and new technology required. Basically, these are long-gestation and capital-intensive projects which won’t take root without initial Government involvement. But we will exit when the time comes.

4.     National infrastructure such as roads, highways and mass rapid transit. There is no exit strategy for these – the Government will own them but the private sector can run them through concession agreements for instance.

It is worthwhile mentioning here that there is NO exit strategy for the national oil corporation, Petronas. It was set up under the Petroleum Development Act to own, secure and exploit oil and gas assets for the country to maximise revenue and encourage conservation. Petronas may in fact have to expand its role by expanding abroad to secure more oil assets.

In short, it is a very successful model of an energy holding company for the Government and provides much money to the Government to undertake its projects. And it has done its part to promote entrepreneurship by encouraging Malaysian and especially Bumiputera companies to get involved in the oil and gas sector, and quite successfully at that. We will leave well alone what is doing well.

There are some who will argue that the Government should remain in business. We partially agree for some of the projects as outlined just now. But there are strong reasons for reducing Government involvement.

The main one of course is economic growth which we want the private sector to spearhead. That will entail that the Government steps back, gives room for the private sector to expand and instead takes more of a regulatory role to see that all goes well without too much interference.

Government needs to step back and give room for the private sector to expand.

Such a move will have other attendant benefits. As is well known, Government-linked companies or GLCs account for some 30-40% of the market value of Bursa Malaysia. This over-concentration leads to liquidity problems. Based on one of the recommendations under the New Economic Model, we have identified 33GLCs (we can’t disclose their names for reasons of information integrity) for full (21) or partial divestment (5) or via public listing (7).  To underscore our seriousness, the Prime Minister chairs regular meetings to review progress. To date 13 companies have been already divested with 11 completed in 2011. Felda Global Ventures, IHH Healthcare, Pos Malaysia and EON Cap are some of the big names divested already.

Also, recommendations have been made for the divestment of companies held by the various states. We are further looking at companies being held by the various ministries to further reduce the Government role in business.

We hope to improve liquidity in Bursa Malaysia by selling down stakes or outright sale of large listed companies as well as encouraging the listing of Government-owned companies.

This and over time, the further sale of companies owned by the states and ministries will reduce the number of government companies which will compete with the private sector for contracts so that we do not crowd out the private sector. Meantime, we should not favour Government companies for contracts.

One key benefit that will accrue from this entire process is that the Government gets revenue for its development projects and if the private sector runs these businesses better than the Government itself, we can look forward to more tax income in future as well.

Our role in Government and particularly at the Performance Management and Delivery Unit (Pemandu) is to help set the conditions for the private sector to become the main engine of growth in future. We plan, we identify, we liaise with the private sector and encourage them.

The reduction of Government in business is an integral part of our aim to make us a high-income nation. At the heart of this transition is making Malaysia a much more market-oriented economy for that is the only way to ensure that we are in the long run competitive relative to the rest of the world.

At the heart of this transition is making Malaysia a much more market-oriented economy to ensure that we are in the long run competitive relative to the rest of the world.

Our transformation success requires that Government focus on its core functions and believe me, that’s what we are doing.(Dato' Sri Idris Jala is CEO of Pemandu and Minister in the Prime Minister’s Department.)-"Transformation Blues" 

Richard Branson's 5 Rules for Good Business

During a recent radio interview on the BBC, the host asked me what advice I would give to young people who want to start their own businesses. In the 46 years since I launched Student magazine, the world has certainly changed. The uncertain economic outlook and the relentless pace of technological advances make replicating Virgin’s success much more challenging for today’s young entrepreneur.

At Student magazine, we expressed our opposition to the Vietnam War and the Cold War; these days, governments now face the more nebulous threat of terrorism and instability in the Middle East and Africa. Back then, American and European markets were generally stable; today, the economic power of Western nations is being challenged by the fast-growing economies of Brazil, Russia, India and China, and growth opportunities and new markets can be found around the world.

There is also marketers’ new ability to bypass traditional channels -- TV, radio and newspapers -- and build a strong following online for their companies via Twitter, Google+, Facebook and new applications such as Path and Klout. This means that most startups are able to launch with smaller marketing budgets, and that entrepreneurs can break into new markets fast. It also means that successful companies must defend their positions, because their products can go out of fashion just as quickly as they caught on.

But during the radio interview I found myself arguing that while the world may be changing quickly, the steps to building a good business have not. The five simple guidelines we followed when we started the magazine and then Virgin Music remain as valid and useful as they were in the late 1960s and early 1970s.

1. If you don’t enjoy it, don’t do it. You must love what you do.
2. Be innovative: Create something different that will stand out.
3. Your employees are your best asset. Happy employees make for happy customers.
4. Lead by listening: Get feedback from your staff and customers on a regular basis.
5. Be visible: Market the company and its offers by putting yourself or a senior person in front of the cameras.

Virgin Media founded its Pioneers program to promote aspiring business people and help them to network. One of our best known pioneers is Jamal Edwards, the founder of SB.TV, an online music and lifestyle channel, whose company and business model remind me of Virgin’s in our early days.

When Edwards started out, his company was just himself and his camera; he started posting videos of rap performances for his online followers. He was doing what he loved, and soon he developed a cult following for his passionate, innovative and authentic early videos of musical events.

Once he had established a brand and a following, Edwards and his team extended SB.TV’s reach into more areas, including music and lifestyle, merchandise, clothing and even a record label. Traditional brands like Puma and Nando’s (the fast-food chain) started calling, wanting to discuss deals and endorsements.

Edwards has also made his own luck by spotting talent. In 2010 a struggling singer-songwriter sent a video to SB.TV that was accepted and placed on the company’s YouTube channel. The views kept racking up, and eventually the rapper Example offered the unsigned young singer a chance to tour with him. This was none other than Ed Sheeran, whose career was effectively launched by SB.TV.

Edwards remains very busy and very visible, promoting SB.TV and himself wherever he can -- on his website, in partnership with Google Chrome and in the media, he tells the story of his company and their dreams and successes, getting the message out. And he knows that good business depends on backing your people and being a good listener. Despite his early successes, he remains down to earth, always willing to listen and constantly trying new ventures.

If you have the right idea and execute properly, your startup’s launch date does not matter. While the business environment has changed, the basic rules remain the same. Rather than getting nostalgic about how things used to be, embrace the new opportunities and challenges available to you now.

Best Job of 2012

With 20 jobs, the business industry has the strongest showing of any other on list of the Best Job of 2012. In the coming years, the U.S Department of Labor foresees this sector staying close behind healthcare and social service in adding jobs, potentially generating close to 3.8 million openings.

#1 Meeting, Convention & Event Planner-Do you fantasize about ensuring a conference hall is perfectly prepped for a politician’s town hall address? Why not consider a career in event planning? Without these strategists, the concert tours and award shows we love would never reach fruition.

#2 Sales Representative-Energetic people who enjoy generating excitement about a new brand or product often flourish in sales careers. Sales representatives travel extensively, introducing and selling products to various customers. The Bureau of Labor Statistics projects the sales-representative profession to grow 15.6 percent by 2020

#3 Accountant-Were you the kid who always made straight A’s in math? You might be a natural-born accountant. The Labor Department predicts that this profession will grow by 15.7 percent in the next few years.

#4 Receptionist-They are the men and women who greet you at your timeshare; the ones who put you at ease when you arrive at your local dentist or doctor’s office. Wherever you encounter them, receptionists effortlessly combine a friendly demeanor with superior multitasking skills

#5 Financial Adviser-Receiving sound financial advice is increasingly important in this unpredictable economy. When should you save? When should you spend? Financial advisers have the answers, and they round out our top five Best Business Jobs.

#6 Customer Service Representative-Plenty of us have ordered a product that fails to live up to its advertisement. And if you’re a customer service rep, it’s up to you to resolve these types of problems daily. The best-paid reps work in the pipeline transportation of natural gas, aerospace products, and parts or railroad rolling stock manufacturing industry, and their profession is expected to grow 15.5 percent by 2020

#7 HR Specialist-HR training specialists are like train conductors, overseeing all the moving components of a machine. If one piece stops working, the entire operation fails. Today’s HR specialists hire and train new employees, ensuring their companies or organizations maintain credibility by recruiting the best of the best.

#8 Insurance Agent-Your car, home, and health all require insurance coverage, and the market for selling commercial insurance to businesses and other organizations is in full bloom. Insurance agents are often extroverts with a positive attitude and excellent communications skills.

#9 Financial Analyst-Financial analyst positions are expected to grow 23 percent by 2020. Financial analysts often hold bachelor degrees in finance, economics, or other related fields. They are typically ambitious workers willing to grow at investment banks, security firms, or mutual fund companies

#10 Executive Assistant-Today’s executive assistants do so much more than answer phones and take messages. They might also conduct research or prepare business reports. This job should grow by 12.6 percent in the next few years.

#11 Management Analyst-A business is only as effective as the people who keep it running. Management analysts understand this and pass their days collecting and deciphering data or recommending specific game plans to solve the problems plaguing their organizations. The position is expected to grow 21.9 percent by 2020.

#12 Sales Manager-A great sales team can catapult a company from obscurity to center stage. For this to happen, its leaders have to be as comfortable meeting new people as they are hiring and supervising. It’s not uncommon for sales managers to be the central faces associated with their companies

#13 Compliance Officer-Rules follow us throughout our lives, determining where we learn, work, eat, and sleep. Compliance officers administer rules daily. And some of the most successful officers exercise their penchant for ethics by reviewing government regulations like housing programs or affirmative action laws, ensuring they are properly enforced

#14 Cashier-From the smocked attendants who bag your groceries to the convenience-store clerks who scan your favorite magazines, cashiers are all around us. Quick on their feet, they often combine basic mathematical skills with a friendly disposition to keep lines moving and shopping aisles clear.

#15 Marketing Manager-Sending the right message about a product can take it from shelf-warmer to must-have sensation in a matter of days. That’s what effective marketers do—highlight what’s fresh and relevant about a commodity to entice consumers.

#16 Logistician-Logisticians solve theoretical problems for manufacturing or retail businesses, sometimes proving indispensable to large-scale disaster-relief efforts. Their input can be life-saving. Logistician employment is expected to expand 25.5 percent by 2020

#17 Financial Manager-Financial managers’ daily work reaches beyond calculators. They are sometimes out in full view at their workplaces, overseeing the progress of large teams of people and translating complicated financial concepts into decipherable layman’s terms. This profession is expected to grow at a 9 percent clip in the next decade.

#18 Administrative Assistant-Today’s administrative assistants are expected to offer support to all echelons of their organizations. Yes, they schedule meetings and maintain paper and electronic files, but they also conduct research and assist with managerial projects

#19 Real Estate Agent-Many of us have fond memories of buying a new home. The person who helped us find that perfect domicile might resonate with us as well. Real estate agents analyze properties, meet new clients, and research housing markets with ease

#20 Business Operations Manager-Business operations managers work with various groups of people, making the tactical and strategic decisions necessary to achieve outcomes beneficial to all employees involved. They are tasked with formulating new policies and making sound business decisions quickly.