IN 1969, the Penang Development Corporation (PDC) was established to drive economic growth, urban renewal and development of new townships. The
main policies of the early 1970s centred around the establishment and
development of free trade zones (FTZs) – the first of which was
operationalised in 1972 in Bayan Lepas on the southern side of Penang
island. The pioneer investors also played a major part in nurturing the
skilled workforce they needed.
In 1989, the PSDC (Penang Skills
Development Centre), the first industry-led skills training centre, was
set up within the free industrial zones. The PSDC’s tripartite model
brings together the best of industry, academia, and government, both
state and Federal. This unique model pools resources and
management expertise and allows the PSDC to provide invaluable advice
and guidance on the latest industrial technological progress, along with
up-to-date training and educational programs.
Since 1990, under the leadership of former Chief Minister Tan Sri Dr Koh Tsu Koon,
the PSDC increased its floor space from 5,000sq ft in 1990 to 300,000sq
ft by 2008 on the basis of Federal funding, donations and generated
revenues. The Malaysian Investment Development Authority’s (Mida)
efforts in the early years, in collaboration with the state government,
specifically the PDC, brought globally renowned corporations to
Penang’s shores and changed the state’s industrial landscape.
It
took quite a convincing by Mida officials to get the corporate giants of
the world to give Penang a serious look. These giants have transformed
the largely agrarian landscape to a hub for making the most
sophisticated products. Among the pioneering MNCs that took the
risk of converting the paddy fields in Bayan Lepas into high-tech
industrial enclaves were industry leaders such as Intel, National Semiconductor, HP, Clarion, AMD, Bosch and Litronix. The presence of these MNCs has also stimulated the development of local supporting industries such as Pentamaster, Globetronics and Vitrox.
With
the rise of local vendors in areas such as equipment making, metal
stamping, plastics injection moulding and precision engineering, more
foreign companies are attracted to Penang to tap into the supply chain
and ecosystem. Industrial development has not only contributed to
the socio–economic growth of the island but has also led to the
development of industrial areas in Kulim and Sungai Petani. The
emergence and excellent performance of the local SMI Cluster in Penang
and neighbouring industrial areas in Sungai Petani, Kulim and Kamunting
constitute a major attraction for new and existing investors to come to
Penang and its vicinity. Also, Bayan Lepas was designated the
first MSC Cyber City outside Cyberjaya in 2005, reflecting Penang’s
stellar performance as a technological hub.
Mida continues to
aggressively promote investments into Penang, both from new and
existing, domestic as well as foreign investors. However, in line with the aspiration of the Economic Transformation Programme,
the targeted activities have now shifted from manufacturing and
assembly activities to more integrated investments, high knowledge,
value-added and high technology industries, including the services
sector. This focus is now showing results. More and more companies in
Penang are undertaking global corporate functions and shared services
such as R&D centres, operational headquarters, supply chain,
distribution and fulfillment centers and treasury management.
Many
of the big names that came to Penang over the last 40 years are still
around. But their operations in recent times are totally different from
their original investments. This development benefits the local
workforce and local companies. The establishment of global R&D
functions with new product introduction (NPI) functions within the
industries in Penang has paved the way for the transfer of technology
from parent companies to the local workforce. The companies, especially
the MNCs, also continue to play a major role in nurturing and developing
local capabilities by establishing smart partnerships with universities
and other institutions of higher learning.
These companies also
have assisted the higher learning institutions to develop curricula that
address the industries’ skills requirements. As more
responsibilities of R&D and NPI are given to the locally
incorporated MNCs, Mida has encouraged these companies to create
opportunities for local vendors via technical collaboration programs.
In
the electronics sector, complementing the technology companies, local
electronic manufacturing service (EMS) providers are also involved in
the design, development and manufacture of industrial electronic
products. These local companies have the potential to grow into major
global players. The combination of the Federal and state
governments’ investments in a robust ecosystem, especially in the
E&E sector, over more than four decades and the strategic foresight
of the likes of Andy Grove, the co-founder of Intel Corporation, and the promotional efforts of agencies such as Mida have enabled Penang to become a major node in the global supply chain.
The solid ecosystem will enable Penang to sustain the momentum of attracting investments, both domestic and foreign. With
the launch of the Northern Corridor Economic Region blueprint, further
impetus is provided for investments into the state as the blueprint
anticipates greater synergistic relationship between Penang and its
neighbouring states within the corridor and the rest of the nation. All
these are a result of continued support from the Federal Government and
Mida. Moving forward, Mida will continue to work with the Penang
Government to ensure that the state continues to be one of the preferred
manufacturing hubs in the country.
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