Far East connections

After the valleys, glens and fens - comes Silicon Peninsula. Andrew North on Malaysia's 'cyber state'

A hill in the midst of a rubber plantation is not the obvious choice of location for promoting your technological vision. But no one was doubting the seriousness of Malaysia's Prime Minister when he stood in just such a place outside the capital Kuala Lumpur last month to launch what is being billed as the world's first "digital state", a haven for hi-tech enterprise and 21st-century living.

In fact, Dr Mahathir bin Mohamed is so serious about the idea that he is now on an extended world tour, wooing potential investors. The technology gurus in California's Silicon Valley, in Japan and in London have already received a dose of his determination.

The foundation for this ambitious idea is the so-called Multimedia Super Corridor (MSC), a 750-sq-km strip of land south of Kuala Lumpur, aimed at attracting software firms, electronic publishers, telecommunications specialists and other multimedia ventures. Lavish investment incentives, such as a 10-year tax holiday, are being dangled in front of would-be investors, as well as new cyberlaws to protect intellectual property. One of the key elements is a "multimedia university" to foster research.

A 2.5-10 gigabit per second fibre-optic network will link every building in the MSC and officials say they want to experiment with "electronic government". Special kiosks will be set up to handle day-to-day matters such as renewing driving licences and passports. "The establishment of the MSC will enable Malaysians to leapfrog into the Information Age," Dr Mahathir predicts.

Work is under way on the site and the Multimedia Development Corporation (MDC), the government agency responsible for the project, claims that 41 companies have already committed themselves to investing in the MSC, including Intel, Siemens, BT and Mitsubishi Corporation. Eventually, there will be a "cybercity" of some 240,000 people on the site of that hill, known as Cyberjaya, which apparently means "Cyber-success" in Malay. Just to the east will be the new federal capital, Putrajaya, and at the southern end of the MSC will stand a new international airport. In the long term, Dr Mahathir is hoping to create an environment "similar to that which prevails in Silicon Valley in the US".

That reference to what has become the world's technology capital is the key to understanding the whole venture. Malaysia is already a hi-tech manufacturing centre, churning out chips and circuit-boards. But Dr Mahathir wants it to become a centre for innovation, to achieve his aim of turning the country into one of the Far East's economic superpowers. The trouble is that rivals such as South Korea, Taiwan and Singapore have a head start. Neighbouring Singapore's plans to create a "wired state" are well advanced and it is already attracting much of the research and development investment Dr Mahathir is after.

Yet, with just 3 million people compared with Malaysia's 20 million, Singapore has a much smaller workforce to call on. And it is literally running out of land. Officials from the MDC have been subtly playing up these differences to would-be investors. Another disincentive is Singapore's censorship of Internet use. By contrast, one of the 10 guarantees for companies setting up in the MSC is "No Internet Censorship".

But how realistic is it to try to re-create Silicon Valley from scratch? Silicon Valley was not the result of a grand government plan. It began almost by accident, although the proximity of research centres like Stanford University certainly helped. But Malaysia does not even have an academic research centre; it is having to build everything. Moreover, some people question whether the country can afford the huge infrastructure costs of setting up the MSC.

Perhaps the greatest obstacle facing the MSC plan is the shortage of technology specialists. Dr Mahathir admitted as much when he spoke to executives in California: "We know we are weak in knowledge workers." But the MDC hopes to overcome this by allowing companies to recruit from anywhere in the world and guaranteeing minimum visa restrictions. Subsidised housing is also being offered to expatriate specialists.

Even then, some companies may be tempted to exploit the investment incentives without setting up the permanent R&D bases Dr Mahathir is seeking. In other words, they could just be satellite operations, easily closed when economic conditions deteriorate. Reports that Microsoft, which has a seat on the MDC's advisory panel, plans to set up its first big research base outside the US in Cambridge show that the attractions of centres of expertise are still powerful.

But one thing is certain. Dr Mahathir is not going to sit back and take no for an answer. If you run a hi-tech company and don't invest in his digital state, he will be knocking on your door demanding to know whyn

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Media

Sauce Recruitment: Programme Sales Executive - Independent Distributor

£25000 - £28000 per annum + circa 28K + 20% bonus opportunity: Sauce Recruitme...

SThree: Talent Acquisition Consultant

£20000 - £25000 per annum + OTE £45K: SThree: Are you an ambitious, money mot...

Guru Careers: Investment Writer / Stock Picker

Competitive (DOE): Guru Careers: A freelance Investment Writer / Stock Picker ...

Guru Careers: PPC Account Executive / Paid Search Executive

£20 - 24K + Benefits: Guru Careers: An enthusiastic PPC Account / Paid Search ...

Day In a Page

Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project
Diana Krall: The jazz singer on being friends with Elton John, outer space and skiing in Dubai

Diana Krall interview

The jazz singer on being friends with Elton John, outer space and skiing in Dubai
Pinstriped for action: A glimpse of what the very rich man will be wearing this winter

Pinstriped for action

A glimpse of what the very rich man will be wearing this winter
Russell T Davies & Ben Cook: 'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'

Russell T Davies & Ben Cook: How we met

'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Bill Granger recipes: Our chef serves up his favourite Japanese dishes

Bill Granger's Japanese recipes

Stock up on mirin, soy and miso and you have the makings of everyday Japanese cuisine
Michael Calvin: How we need more Eric Cantonas to knock some sense into us

Michael Calvin's Last Word

How we need more Eric Cantonas to knock some sense into us