KUALA LUMPUR, June 5 — The federal government and the private sector will provide RM1.2 billion for Malaysian firms to develop new and innovative technology that will be the backbone of the country’s economic recovery, said Tan Sri Muhyiddin Yassin.

The prime minister said when announcing the RM35 billion Short-term Economic Recovery Plan (Penjana) that RM600 million will come from federal funds that will be matched by international investment firms.

"These funds will be used to cultivate innovation and develop domestic venture capital,” he said in a special address to the nation today.

Among firms that have expressed interest were SK Group, Hanwha Asset Management, KB Investment Co Ltd, Provident Growth, 500 Startups and The Hive, the PM said.

The PM said the government was allocating RM100 million to establish the National Technology and Innovation Sandbox under the Science, Technology and Innovation Ministry to develop and test groundbreaking applications for modern needs.

"For example, to test the delivery of online purchases using drones and well as the use of self-driving vehicles,” Muhyiddin said.

The prime minister said the government should also lead the digitisation shift by example, and begin offering more of its services online.

"As such, I urge more agencies and ministries to stimulate their digitisation and automation efforts.”