Futurise – Shaping Regulatory Innovation Landscape

By Futurise,

As the year draws to the close of Q1 in approximately 7 weeks, Futurise reflects on remarkable milestones in expediting innovation and Malaysia’s future economy thus far.

Set-up by the Ministry of Finance Malaysia in 2018, Futurise was mandated to spearhead the National Regulatory Sandbox (NRS) initiative, to provide solutions to regulatory challenges that can potentially hinder technology and innovation from operating efficiently in the market. The NRS initiative is meant to address industry and investor concerns that innovation faces challenges when deployed in the marketplace due to either the lack of, or at times, outmoded regulatory frameworks.

Rosihan Zain Baharudin, Chief Executive Officer of Futurise takes us through the key initiatives that defined Futurise’s journey to date.

“If I could put it in simpler terms, we pave the ground for new and innovative ideas to operate in the market through safe testing of regulations and policies in a secured environment called a sandbox. The NRS brings together different groups like corporate organisations, government bodies, academia and entrepreneurs to solve regulatory challenges faced by innovation,” Rosihan said.

The existence of Futurise itself displays the commitment by the Malaysian Government to ensure that innovation within the economy can happen unhindered. In the complex national regulatory landscape across a multitude of industries and sectors, kinks in the framework can sometimes be efficiently addressed by a specialised outfit like Futurise that works closely with Government regulators and industry players to home in on specific pain points and expedite timely solutions.

“The top-down approach used in yesteryears when prescribing regulatory frameworks may not be conducive to innovation. Futurise acts like a bridge, connecting different parts of the ecosystem – from regulators, industry players, organisations and relevant bodies. It is all about collaboration and ensuring that everyone can contribute to building a more innovative and advanced Malaysia.”

As Futurise proudly highlights its achievements, it is essential to acknowledge the hurdles and challenges that were encountered along the way.

“Were we successful? Absolutely. Ultimately, Malaysia has taken significant steps in establishing a more dynamic innovation ecosystem. We are seeing ongoing NRS initiatives like the Autonomous Vehicle and Micromobility progressing steadily as planned, while Futurise has gone into new areas like Sports Innovation, Digital Healthcare and Advanced Air Mobility. Meanwhile, our testbeds for autonomous vehicles and drone technology (Futurise together with the Civil Aviation Authority Malaysia created the nation’s first drone test zone in Cyberjaya) has seen a healthy rise in activity with increased testing by companies participating in the area,” said Rosihan.

Echoed by Erin Hoo, Director and Accountable Manager of Drone Academy Asia, “Working with Futurise offers valuable opportunities for companies aiming to make an impact in Malaysia. The Drone Testing Zone (DTZ) established by Futurise provides a controlled environment for testing and developing drone technologies. This has several benefits, including research and development opportunities and regulatory compliance facilitation. Overall, the DTZ has fostered collaboration and advancement in the field of drones.”

Rosihan added, “Yet, with the rapid pace of innovation taking place globally, there is always more new ground to cover on our shores. Did we encounter challenges? Most certainly. Stakeholder engagements can be complex, and understandably, sometimes emotions can run high. There needs to be a balance between safeguarding public interest and driving enterprise – innovation and business likewise need to be cognizant of paramount issues like protection, health and safety of consumers.”

According to Rosihan, “Overcoming the challenges add a special sweetness to the NRS success—a journey all of us can appreciate, especially for the regulators and industry players involved. Despite the differences of opinions and individual objectives, we can find a common way forward as there is already a binding intention among all parties entering the sandbox to see innovation progress in the nation. That shared commitment tends to yield meaningful solutions”.

The collaborative achievements of Futurise echo a symphony of progress, harmonising with the entire innovation ecosystem more closely than ever before. As Malaysia progresses towards a more modern and technologically driven nation, a unified front is needed, underlining the collaborative ethos that will be the cornerstone of Malaysia’s future progress.

While celebrating the accomplishments, it is clear that there is still much work ahead. The challenges faced are not roadblocks but stepping stones toward a future where collaboration continues to be the driving force, ensuring that the innovation ecosystem in Malaysia thrives and evolves.

Undoubtedly, the ecosystem has become more tightly knit than ever before. This heightened cohesion is evident in the remarkable progress Futurise witnessed throughout the year.

Accelerating Malaysia’s Regulatory Sandbox: Futurise’s symphony of achievements

1. Advancing Malaysian Advanced Air Mobility

In March of 2023, Futurise, in collaboration with the Civil Aviation Authority of Malaysia (CAAM), introduced the Unmanned Aircraft System (UAS) certification (C-UAS) and Manned Electric Vertical Take-Off and Landing (eVTOL) aircraft national regulatory sandbox (Manned eVTOL NRS). This initiative, unveiled during the RegTalk series in Cyberjaya, aimed to balance public safety with industry needs, fostering an environment for innovative air mobility solutions in Malaysia.

The C-UAS ensured UAS compliance with CAAM’s regulatory standards within the sandbox, removing bureaucratic obstacles for companies. During the event, Deputy Minister of Transport Datuk Haji Hasbi lauded the collaborative efforts, emphasising their transformative impact on the drone industry.

Highlighting the potential benefits of Advanced Air Mobility (AAM), Rosihan stressed its significance in promoting faster, safer, and quieter transportation while reducing ground congestion.

CAAM Chief Executive Officer, Captain Norazman Mahmud underscored the importance of regulatory buy-in and experimentation to propel the local drone industry forward. The RegTalk session featured speakers discussing regulatory frameworks and the state of the drone landscape, fostering engagement and idea exchange among industry stakeholders.

To date in the global market, several AAM OEM companies received funding for their AAM development totalling up to $8.5billion ($8463.4 million). With an average of 6.5/10 (65%) in AAM readiness and 4 AAM OEM companies being more than 8/10 (80%) in AAM readiness. Furthermore, AAM OEM companies that can provide vertiports which are needed for AAM activities have an AAM infrastructure average readiness of 5.3/10 (53%).

This undertaking was a step forward and a resounding affirmation of Malaysia’s dedication to shaping a future where urban air mobility transcends conceptualisation to become a tangible reality. The harmonious fusion of pioneering concepts and well-crafted regulatory frameworks is ushering Malaysia into a new era of aviation possibilities.

2. Exploring emerging technologies for Malaysia’s competitiveness

Futurise teamed up with the Malaysian Industry-Government Group for High Technology (MIGHT) in May 2023 and formalised the collaboration through a Memorandum of Understanding (MoU) at the Langkawi International Maritime and Aerospace Exhibition 2023 (LIMA). The MoU signing marked the start of a strategic effort that had a ripple effect across different sectors.

The collaboration, initiated with the advanced air mobility sector, seeks to address disruptions and enhance sectors like transportation and logistics. MIGHT’s role involves leveraging its experience in identifying business prospects, fostering partnerships, and contributing to high-tech development. The collaboration anticipates identifying key drivers for change, preparing for future opportunities, and mitigating potential risks.

The collaboration is a testament that Malaysia is actively embracing new technologies. As the world changes, Malaysia aims to lead in high-tech industries. The positive impact of this collaboration is set to significantly boost Malaysia’s competitiveness globally in the tech arena.

3. RegTalk on 3D Printing

In 2022, the global 3D printing market size reached US$ 19.8 Billion. The global 3D printing market is expected to reach up to US$ 67 Billion by 2028, displaying a growth rate (CAGR) of 21.4% during 2023-2028. Looking at the growth rate in the global market, 3D printing plays a pivotal role in the ‘modernisation of printing’, which is currently not properly regulated in certain industry sectors.

Hence, in August 2023, Futurise organised its RegTalk panel discussion on “3D Printing – How it Should be Regulated,” addressing challenges and opportunities in the burgeoning 3D printing industry.  This event, part of Futurise’s RegTalk series, convened industry leaders and experts to explore the complex regulatory landscape of the burgeoning 3D printing industry.

The panel addressed key issues such as legal concerns, regulatory impacts on industry development, and Malaysia’s global positioning in the 3D printing landscape. It emphasised the need for a robust regulatory framework to balance innovation, security, and intellectual property protection.

RegTalk, a crucial initial phase within the NRS process, serves as an insightful and collaborative event for Futurise to scope out the breadth and depth of issues. Early feedback from regulators, ecosystem enablers, relevant ministries, agencies and industry players uncovers potential regulatory issues associated with the introduction of innovative products and services to the market.

4. MyAV Guidelines and Drone Sports Roadmap

Futurise, during the Cyberjaya Innovation Week 2023 held in September, introduced two groundbreaking initiatives, the MyAutonomous Vehicle 5.0 Guideline and the National Drone Sports Strategic Roadmap (NADSAR) 2023-2027.

It is expected the Global Autonomous Vehicles Market to be US$ 325.9 Billion by 2030. Furthermore, the Autonomous Vehicles (AV) Market is expanding at a CAGR of 47.1% during 2021-2030. Although the AV market in Southeast Asia is still in the infancy phase, a collaboration with the Ministry of Transport under the National Regulatory Sandbox, establishes trial routes and safety standards for advancing Autonomous Vehicle (AV) solutions in Malaysia. To date, there are five (5) AV trial routes in Malaysia, which are located in Cyberjaya, Putrajaya, Selangor, Johor and Kuala Lumpur, that play an important role in expediting the development of AV technology. Next year, it is expected that AV technology in Malaysia will enter the pre-commercialisation phase that will be a catalyst for the creation of new talent and future economy.

The NADSAR 2023-2027 (National Drone Sports Strategic Roadmap) meanwhile outlines the future of drone sports in Malaysia, focusing on youth engagement and skill development. Towards this end, Futurise was mandated by the Government to establish a National Drone Sports Excellence Centre (otherwise known by its Malay acronym AKSADRON), with the underlying objective of using the thrill-filled drone sports as a fertile ground to groom talents for the industry. To date AKSADRON has formed partnerships with several universities such as UKM, UTM, UiTM and others to run drone sports development programs among the youth.

“Our partnership with Futurise and Institut Sukan Negara (ISN) through AKSADRON has been nothing short of a remarkable experience. From the development of the NADSAR to exploring new emerging sports, Futurise has been an integral enabler in our quest to achieve the National Sports Vision 2030 (VSN 2030) strategic objectives. As a subsidiary of ISN, Sports Technology Malaysia Sdn. Bhd. (STM) was mandated to accelerate sports technology adoption and creation, making Futurise the ideal partners in developing the sports technology ecosystem to greater heights. As we enter the second year of our partnership, STM is enthusiastic in expanding this partnership to many more opportunities in the future,” according to Shafiq Shamshir, Chief Strategy Officer of Sports Technology Malaysia Sdn. Bhd.

One of Futurise’s supportive university partners under the Dronecubator initiative, Prof. Madya Ts. Dr. Haryanti Mohd Affandi from Universiti Kebangsaan Malaysia (UKM) said that AKSADRON and DroneCubator initiative is a valuable resource for universities in Malaysia. The program allows students to build their own drones and even earn part-time income by conducting events or taking photos with their creations. By expanding this program to other institutions such as matriculations and vocational colleges related to TVET, the vision and mission of higher education can be achieved in the context of the 4th and 5th Industrial Revolutions.

Forging International Partnerships to Strengthen Regulatory Efforts

Last June, Futurise and the UAE Regulation Lab (RegLab), under the General Secretariat of the UAE Cabinet, signed an MoU to accelerate regulatory innovation and leverage each other’s technical knowledge and experience at various levels. The partnership will also activate co-research activities on vital areas of common interest such as the design, development and management of regulatory sandbox programmes and open innovation platforms for numerous industries. Together with UAE RegLab, two RegTalk sessions were organised, participated by industry experts on various mobility topics, including a visit to Abu Dhabi Integrated Transport Centre to promote discussions and collaborations that will revolutionise the future of mobility.

As part of efforts to explore opportunities and collaboration within the aerospace ecosystem globally, Futurise participated in the Paris Air Show also in June of last year, specifically to acquire latest information within the international AAM companies, pursuant to the activation of the AAM regulatory Sandbox. The visit to Skyport’s advanced air mobility testbed located in Cergy Pontoise was an important journey to understand how the test bed operates and learn from it to be replicated in Malaysia.

Looking Ahead: Growth for Regulatory Innovation

As Futurise reflects on the significant achievements, the company looks forward anticipatingly beyond Q1 of 2024. There will be more to do no matter what uncertainties lie in the global economic condition of the coming years. Already more stakeholders have approached Futurise presenting regulatory challenges faced by them.

“We have seen innovation remain persistent in both favourable and tough conditions. In fact, it’s been seen that challenging market situations can give rise to new technology driven solutions, products or ways business is conducted,” argued Rosihan.

The strategic collaborations, innovative initiatives, and commitment to agile regulatory frameworks position Futurise as a driving force in Malaysia’s innovation landscape. The resolve is depicted by a sign outside in the Futurise meeting room, apparent to anyone who walks past. It says: “The Future Economy starts Here”. Step inside.

Challenges Foreseen Ahead

The regulatory environment is often complex, and navigating through existing regulations to create a sandbox that is both permissive and protective can be challenging.  It is important for regulatory authorities to be proactive in addressing these challenges to foster an environment that encourages innovation while safeguarding public interest and regulatory integrity.

Regular evaluations and adjustments to the sandbox framework can help address emerging challenges effectively.  A lack of awareness regarding NRS from key stakeholders, such as businesses, entrepreneurs, and potential participants, leads to a limited number of applications or projects being submitted for consideration.

Over the years, we have collaborated with industry players, investors, and other stakeholders who have contributed to the success and growth of sandbox initiatives.  Collaboration needs to involve a diverse range of stakeholders, including government agencies, industry players, innovators, and most of the time the consumers as well.  Collaboration brings together individuals with diverse expertise and perspectives, enriching the sandbox ecosystem.

A lack of awareness among potential participants, businesses, and the public about the existence and benefits of the regulatory sandbox can limit participation. Effective communication and outreach are most essential to address this challenge.

Another challenging issue that is foreseen is streamlining and coordinating with international regulatory bodies, aligning sandbox practices with global standards which may be challenging, especially when dealing with cross-border innovations.

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