State of Penang. Playing a decisive role as a launchpad for innovation

Penang’s main asset is that it provides a hub for high-tech in a naturally beautiful and relaxing environment

The northern Malaysian island-state of Penang has long been familiar to international visitors both for its tourism delights and for its manufacturing sector, which has been producing microchips and computer electronics for the world since the 1970s. Now, however, Penang also strives to make a name for itself as Malaysia’s ‘financial hub of the north’. State authorities have an ambitious plan to transform Penang into an international finance services provider par excellence, which the state government expects will include international banking, finance houses, financial consultants, and IT services to rival those of Kuala Lumpur. Penang is also set to continue moving its manufacturing base up the value chain and to exert a fresh focus on the state’s tourism potential.

At present, there are roughly 150 international companies present in Penang, drawn by the state’s highly skilled and English-speaking labor force, business-friendly environment, and cost-competitiveness. In line with the local government’s aim of promoting higher technological production, the state is preparing the nation’s second Multimedia Super Corridor in an industrial park near Penang’s international airport. Chief Minister of Penang and Chairman of the Penang Development Corporation, Koh Tsu Koon says the state hopes to meet all of the criteria for opening the park this year. Simultaneously, the government is promoting the development of new ICT areas, such as wireless and multimedia applications, and exploring the possibility of bio-pharmaceutical production. The state has already formed agreements with three companies for insulin production, biologics, and pre-clinical drug testing. Penang is also the Malaysian center for marine biotechnology, an area Dr. Koh says the state would like to attract new investment to.

KOH TSU KOON Chief Minister of Penang

Penang is also working to promote the growth of its local small and medium-sized enterprises and to stimulate domestic entrepreneur activities. To this end, the government is developing e-business platforms for small business use, offering technological training and promoting technological transfer. Finally, Dr. Koh says that his administration has been working on an agreement with the multinationals in the state for greater outsourcing to local businesses.

In tourism, which currently accounts for 15% of Penang’s overall GDP, the government has a range of projects underway, such as the development of an international cruise center in Georgetown and the construction of an inner-city marina. The government has also invested heavily throughout the last two years on preserving Georgetown’s historical heritage. The emphasis has been on preserving the historical site while providing all the modern conveniences, according to Dr. Koh. He comments, “Our attraction is going to be high-tech in a heritage environment, or high tech in a resort environment. In other words, we would like to be a combination of Silicon Valley and Hawaii, with the charm and vibrancy of San Francisco.”