INFORMATION COMMUNICATION TECHNOLOGY (ICT)

http://www.matrade.gov.my/cms/content.jsp?id=com.tms.cms.article.Article_hide_ICT

Overview

The Malaysian government in 1996, invested heavily in creating the Multimedia Super Corridor ( MSC ) to attract domestic and foreign investors to its ICT industry. The MSC currently serves as the backbone of the ICT infrastructure in the country and is supported by a high-speed link that connects it to Japan, the ASEAN countries, USA and Europe.

For the period 2005 -2010, ICT expenditure in Malaysia is expected to grow at a Compounded Annual Growth Rate of over 10 percent. By 2010, International Data Corporation forecasted that ICT expenditure in Malaysia will reach RM22 billion. The development and widespread usage of ICT are central to the realisation of Vision 2020 of a knowledge based economy. ICT usage has improved efficiencies among the Malaysian enterprises and has also directly increases Malaysia’s competitiveness in the global economy. Digitalization enables the convergence of the computer, telecommunications and consumer segments. The computing segment is the largest application segment for semiconductor consumption in Asia while communications and consumer applications are the fastest growing segments.

Malaysia has been ranked globally, as the third most favoured location for outsourcing of business processes. Malaysian ICT companies are capable of a wide range of services worldwide, including in the areas of;

• mobile and wireless communication
• business application software development
• internet-based business applications in the financial sector
• digital content development
• e-commerce for networking and outsourcing
• bio-informatics and
• e-government

Malaysia has and will continue to be a top choice for off-shoring in the IT space to companies in the West Asia. Progressive Government policies and efforts in offering a world-class environment and attractive incentives through special zones will continue to attract business from around the globe.

As at 31 December 2007, a total of 1,994 companies were granted MSC Status Companies by the Multimedia Development Corporation Sdn. Bhd. The 1,994 companies are grouped into 6 main technologies namely creative multimedia, internet-based business, shared services and outsourcing, application software and mobility embedded hardware & software (MeSH), and institutions of higher learning.

Useful Websites

• Malaysian Communications and Multimedia Commission at http://www.mcmc.gov.my
• Multimedia Development Corporation Sdn Bhd at http://www.msc.com.my
• Association of the Computer and Multimedia Industry Malaysia at http://www.pikom.org.my

Contact

Feedback and query are welcomed. Please contact Arieff Aaron Abdullah at aaron@matrade.gov.my or 03-6207 7132 / Nur Azni Aziz at nurazni@matrade.gov.my or 03-6207 7139 / Zaimah Osman at zaimah@matrade.gov.my or 03-6207 713

Will a US recession hit the local ICT industry hard?

Malaysian Business, Feb 1, 2007

WILL the United States spiral downwards into a recession this year? This is the key question dividing economists in the United States and the world right now. An economic downturn or recession would certainly have an adverse effect on our economy, especially affecting local technology exports to the United States.

In November 2006, tech exports amounted to RM9.08 billion or 17.8% of Malaysia's total exports. After Asean, the United States is the second major export destination for Malaysian manufactured products, with an export value of RM100.91 billion from January to November 2006, according to statistics of the Malaysia External Trade Development Corporation (Matrade).

As such, the local information communications technology industry (ICT) and other technology-related players will have to keep a close eye on events in the US, given the uncertainty that exists. Opinions vary on whether a recession is on the cards and different indicators are leading think tanks to come up with various views. The widely cited housing and real estate indicators, as well as a concern about the US manufacturing sector have lead many to believe that a downturn, even recession, could hit the economy this year.

`The housing market, which has been driving the US economy's growth over the last few years, is undoubtedly going through a recession with falling sales and prices in 2006', says Farheen Pasha, team leader, ICT Practice, Economics Research and Analytics (ERA), Frost & Sullivan Asia Pacific, quoting figures from the National Association of Realtors of the United States.

She adds that while this is expected to continue through 2007, the impact of the housing recession on the US general economy, specifically on spending and consumption, is uncertain. `The close of 2006 saw widely divided opinions. However, the majority of prominent US economists are predicting a mere slowdown, as opposed to a full- blown recession. As opposed to the growth of 3.3% in 2006, cautious optimism permits us to expect the overall US economy to grow at a rate of between 2.3% and 2.5% in 2007,' says Pasha.

Analysts are reportedly revising forecasts due to a strong US trade balance, retail sales and job creation figures. But locally, the Malaysian Institute of Economic Research (MIER) is expecting the US economy to moderate in 2007, affecting Malaysia's exports overall. How will all this affect technology exporters here?

No effect

There seems to be reason to believe the ICT sector will be insulated to some extent. Lee Boon Kok, chairman of the Association of the Computer and Multimedia Industry of Malaysia (PIKOM) says that a slowdown does not seem imminent.

`Generally speaking, the slowdown in the US economy is geared towards the housing sector and we are still very bullish about the technology sector. We also believe that the market has been pulled up by growth in new areas, particularly the emerging outsourcing segment as well as export of software and services,' he says.

He points out that there is some forecast the new Apple iPhone will drive up the demand in the consumer electronics industry.

`The tech sector is generally going strong due to the demand for mobility and seamlessness driven by the entertainment, gaming and commercial industries,' he says.

Pasha, however, is not so optimistic. `The Malaysian ICT industry is very dependent on the US economy for both imports and exports. Imports from the United States dominate the Malaysian IT hardware and software segments and the industry also depends highly on the import of technologies. On the export front, the vulnerability of the Malaysian ICT industry on US demand is higher because the United States constitutes the largest export market for Malaysian ICT products,' she says.

Malaysian ICT exports to China, Thailand and India as a whole exceed exports to the United States. The analyst points out that China, Singapore, Vietnam, Myanmar, Thailand, Indonesia, Laos, Pakistan, Iran and Saudi Arabia are the other important export destinations for Malaysian IT services, particularly for shared services, creative multimedia content and applications, e- procurement and e-manufacturing applications, Voice over Internet Protocol (VoIP), and other Internet-based telecommunications solutions.

But taking the effect of the 2001 US economic slowdown and its subsequent effect on Malaysian ICT exports, caution ought to permeate the industry this year.

`Though it was expected that this diversification of Malaysian ICT exports across Asia and across products would provide a buffer against the weak US demand in 2001, it was unable to prevent the slowdown in Malaysia's ICT exports in the face of the slowdown in the US economy in 2001. If the US demand weakens in 2007, then this is expected to affect Malaysia's ICT exports,' says Pasha.

The exact nature and extent of effect depends on how the slowdown affects ICT demand in the United States, but there could be an interesting, positive effect for Malaysia's business process outsourcing (BPO) industry. `An IT budget squeeze for US corporations may lead to a further trend of BPO and outsourcing that Malaysia is vying to develop. However, the nature of impact is currently uncertain,' says Pasha.

Softening the blow

Downturn or not, the industry association believes technology manufacturing players should be proactive to adopt best practices and streamline business processes to achieve the best productivity possible. It shouldn't take a downturn to force players to recognise the value in such improvements and will stand them in good stead to move up the global value chain.

`I think we have to really plan wisely: we have to identify a few focus areas. Study the existing strengths of our ICT industry and leverage on those strengths. Rather than going after what we wish to do, we should focus on what we can do best with our existing capacity and strengths,' says Lee.

Malaysia is certainly a force to be reckoned with in shared services and outsourcing, (SSO) for example. `The industry has to look outwards for new markets. It is also advisable that these players work collectively and promote the country at a regional and global level. Malaysia must focus on our niche. For example, we can play the role of being the gateway to Asia,' he elaborates.

Although Malaysia does not have a sizeable market, its infrastructure is relatively well developed. Attracting the right talent and focusing on priority areas will probably keep the industry in a healthy state despite external economic factors. Pikom sees the Middle East and China as two markets that are showing promise.

Pasha concurs.'Trade relations with neighbouring Asian countries such as China and India offer greater potential for Malaysian exporters. Generally, the ICT industry is booming in most of the emerging markets, including Russia, China and Poland. Exporters can also target these emerging countries as a long-term diversification strategy,' she says.

E&E boom

The electrical and electronics (E&E) sector made up 47.8% of total exports from January to November 2006, to a total of RM256 billion, a 6.7% increase from the same period last year. Despite uncertainty surrounding the US economy, demand for semiconductors is estimated to remain positive.

`It is hard to predict if the US economy will slow down this year, and it is the same for the oil price. It was predicted to go up and it came down recently to below US$60. Although there are signs that the housing sector in the United States is seeing a slowdown, consumer spending was not affected. With the oil price coming down and stabilising, consumer confidence will probably not be affected,' says Datuk Wong Siew Hai, chairman of the Malaysian American Electronics Industry (MAEI). MAEI is an electronics industry committee within the American Malaysian Chamber of Commerce (AMCHAM Malaysia). It represents US electronics companies here, and its 17 member companies accounted for a quarter of Malaysia's total E&E output in 2005.

Wong cites projections of the Semiconductor Industry Association (SIA) for the industry's growth as well as analysts' projections to support the optimism felt in the sector despite talk of a recession.

The SIA has projected world semiconductor growth at 10% this year, driven by mobile phones particularly 3G, digital cameras, MP3 players, personal digital assistants (PDAs) and digital TV which are all showing double-digit growth, Wong points out.

`I expect the E&E industry in Malaysia to continue to grow in 2007, especially if SIA's forecast comes true, barring any unforeseen circumstances that might affect the US and world economy. Under the Third Industrial Master Plan (IMP3), it has been projected that the E&E industry will experience a compounded average growth of 9.2% during the 2006-2010 period,' he says.

He adds that the economic report released in October 2006 had projected Malaysia's Gross Domestic Product to grow by 6% in 2007. `However, various financial analyst and research houses have forecast a lower growth rate, of about 5%, as they expect the US economy to slow down somewhat and this in turn may impact global demand,' says Wong.

Up the value chain

The E&E companies in Malaysia have continued to expand and go up the value chain, but Wong believes that to increase in importance, companies need to ensure that the quality of talent also increases.

`Many of these companies have gone into design and development, technical support, customer support and shared services. These expansions have resulted in the need for more knowledge-based human resources. It is thus important for Malaysia to develop as many qualified technical and professional human resources that can support industry expansion in these areas,' he says.

He adds that more of such people need to be encouraged to continue their education to take up postgraduate studies. `Meanwhile, any shortage of such talent will need to be filled by foreign knowledge- based workers until the development of our human resources is increased and improved. I expect to see the shared services industry continuing to grow as Malaysia is ranked highly for providing such services,' says Wong.

Becoming global competitors means companies will need to address cost competitiveness, and strive to go up the value chain. This also applies to the ICT sector, which can implement cost-control measures to improve margins.

`They need to be more innovative by providing more value and better customer service and developing competitive products. Spending more time and resources in innovation and development will be key to winning businesses and staying ahead of competition,' he adds.

To Wong, these companies also need to increase their usage of ICT technologies as e-business has become an important global business trend with global companies. `We need the government to help put in infrastructure to support broadband in the country so that the Internet penetration rate can be increased. Improving the government delivery system will also help the companies to move faster and be more agile in response to competition,' he says.

Copyright 2007

Provided by ProQuest Information and Learning Company. All rights Reserved.

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Malaysia ICT Sector Highlighted In MSE 2008

Middle East – key area for growth for Malaysian ICT companies.

January 10, 2008 - SHARJAH - MSC Malaysia’s presence within the GCC area is set to be further enhanced by its participation at the Malaysia Services Exhibition (MSE 2008), which will take place from January 13- 15 at the Sharjah Expo Centre.

Ten of the top MSC Malaysia-status ICT Services companies ranging from those involved in Software Applications and Services to Outsourcing Solutions and Services, will represent the ICT sector at MSE 2008. The companies are Basis Bay, Britesoft, SCAN Associates, Custommedia, CWorks, Extol Corporation, Microlink Solutions, N2N Connect, Nexustel, Outsourcing Malaysia, and Xybase.

According to Badlisham Ghazali, the CEO of Multimedia Development Corporation (MDeC) of Malaysia, ICT companies participation in MSE 2008 are examples of the comprehensive, credible and cutting edge ICT services we offer to world at competitive costs. MDeC is the lead agency spearheading the MSC Malaysia project. MSC Malaysia is a national initiative spearheaded by the Malaysian Government to promote both the national ICT industry and provide a test-bed for the global ICT industry.

Currently, there are more than 1,900 ICT companies operating within the MSC Malaysia area, ranging from Internet-based business solutions and services providers to software application and services providers. Some of the sectors where Malaysian ICT companies can provide world-class applications include Financial Services Industry (FSI), Telecommunications (Telco) and e-Government services.

He added that MSC Malaysia industry development programs have produced globally competitive ICT companies delivering award winning solutions and world class service. These leading companies have successes in their delivery across continents covering Asia, Europe, US, Africa and the Middle East.

They include N2N Connect, which provides mobile trading technology for the Financial Services Industry in over five continents; Custommedia with their world class software testing solutions and services; Britesoft – providers of most advanced non-coding software development tools and services; Xybase is today’s leading Total Airport Management System and services with more than 20 international airport implementations globally, just to name a few.

For MSE 2008, Badlisham will represent the ICT sector to speak at the industry forum with a topic entitled, “MSC Malaysia: Are You Ready for the New World?” on Tuesday, January 15 at 5.30pm to 7pm, focusing on world solutions provided by MSC Malaysia to optimize strategies and opportunities in the New World of developing nations and economic power houses.

Among others, he will provide the ICT industry outlook in Malaysia as well as the opportunities in the New World order emerging in the East and the entire region. Badlisham will reinforce the MSC Malaysia messages and desire to be a strong partner with Middle Eastern Businesses and Governments, together bringing them to the next levels of excellence through ICT.

Badlisham will also deliver in his keynote, the opportunities within the Government-to-Government (G2G), Business-to-Government (B2G) and Business-to-Consumers (B2C) sectors. He will also speak on Kuala Lumpur’s preparation to host the 16th World Congress on Information Technology (WCIT 2008).

Business owners and multinational corporations in the region should not miss the opportunity to experience how MSC Malaysia empowers Governments and businesses through one-to-one business meetings and round-table discussions.

The MSE 2008, which will host over 160 Malaysian companies and showcase and brand a diverse range of Malaysian services in the region, is aimed at increasing collaborative possibilities between Malaysian service providers and businessmen in the region, especially in areas such as construction, education, engineering, energy and power generation, financial, healthcare, ICT, logistics and transportation sectors, management services, oil and gas.

Malaysia vows to drive ICT goals

ZDNet Asia
Thursday, March 13, 2008 06:53 PM

Malaysia's Multimedia Development Corporation (MDeC) has pledged to further develop the country's ICT ambitions this year, focusing on improving the quality of its entrepreneurs and status as an outsourcing destination.

The custodian of the Multimedia Super Corridor (MSC) Malaysia said it wants to continue to further enhance its ongoing programs, create more young entrepreneurs and improve the capabilities of MSC Malaysia-status companies in 2008.

First mooted in 1996 and formerly called Multimedia Super Corridor, the MSC Malaysia is a government ICT initiative aimed at accelerating the country's position as a knowledge-based economy.

MDeC CEO Badlisham Ghazali said the government body is committed to its charter to help Malaysians improve their quality of life and to empower businesses to achieve more.

"We will [continue] to develop sectors in the creative multimedia industry, create more young entrepreneurs through our technopreneur development [programs] and prepare our MSC Malaysia-companies to be ready to compete globally," Badlisham told ZDNet Asia in an e-mail interview.

He said the MDeC will continue to capitalize on Malaysia's position as the third-most attractive outsourcing destination, behind India and China. He noted that while Malaysia may not be the cheapest outsourcing location, it offers quality human capital for the ICT industry.

One sector, he added, in which the MSC Malaysia made remarkable progress last year was the development of creative multimedia and digital content.

The industry segment, encompassing animation, mobility, online and offline games, will be further enhanced and more grants will be given to reach more potential candidates through MSC Malaysia this year, Badlisham said.

"I'm sure the MSC Malaysia Creative Multimedia and Content Initiative (MCMC-I) with its pitching competitions, global distributor engagement programs and business matching will continue to expose our talents and companies globally," he said. "We hope the MCMC-I will exceed our expectation of 15 percent growth from 400 million ringgit (US$125.5 million) sales achieved last year."

Challenges abound, competition tough
Despite the progress MSC Malaysia made in the past year, Badlisham acknowledged that there are still too few local companies going global. He said local ICT companies must realize that "to go global, they have to be really good".

"The competition is very stiff. Companies from Vietnam, Thailand and Singapore are showing more and more potential. Local companies must be knowledgeable in world trends and continue to improve their capabilities," he explained.

The quality of services provided by MSC Malaysia companies, while better than previous years, still has room for improvement, he said.

The MDeC is, therefore, stepping up efforts to encourage more companies to obtain globally-recognized certifications, Badlisham said. The government body is also offering various development programs, particularly management programs, to enhance the quality of its local CEOs, he said.

According to Tony Pua, economic advisor to Malaysia's opposition Democratic Action Party (DAP), there is an urgent need to improve the quality of IT education provided by Malaysian universities and colleges. This can be achieved by boosting entry requirements, employing better qualified lecturers and setting higher passing standards, Pua said in an e-mail interview.

"Malaysia needs to transform the administrative and civil service mindset that the ICT industry can be geographically confined within areas, such as MSC Cybercities or designated industrial parks, [and] focus on the ubiquitous nature of ICT which transcends physical boundaries," he said.

The country also needs to open up the current "opaque government process in IT requisitions", to one that supports the best and strongest IT companies instead of non-performing companies, Pua said.

"If this trend is not reversed, projects will be delivered at a higher cost but less effectively. Also, better qualified IT companies will be disadvantaged in the process of transforming themselves into world-class companies," he said.

Raphael Phang, IDC's Asia-Pacific research director for government, said while Malaysia has formulated a strategic ICT vision, it needs to bring policies into reality.

"Malaysia, like all other economies, needs to face similar issues of execution plans with clear, objective ROI (returns on investment) and KPI (key performance indicator) benchmarks and measurements," Phang told ZDNet Asia in an e-mail interview.

"Other issues such as insufficient or untrained manpower that are unable to exploit available technologies, can [also] hamper the success of any implementation," he said.

The IDC analyst added that the Malaysian government would do well to work with foreign or private sector expertise in areas where it lacks sufficient resources to support an efficient implementation.

Malaysian Government ICT awards continue to shape industry, says MDeC

Previous winners return as sponsors in the ninth year09 Sep 2008

KUALA LUMPUR, 9 SEPTEMBER 2008 - Several previous winners of a major Malaysian awards programme have returned as sponsors, according to the Multimedia Development Corporation (MDeC).

The former winners have become sponsors of the Multimedia Supercorridor Malaysia Asia Pacific Information and Communications Technology Alliance (MSC Malaysia APICTA) Awards Programme 2008, now in its ninth year.

Dato’ Badlisham Ghazali, chief executive officer of MDeC, said: “Efforts from MSC Malaysia alone would not have been sufficient in shaping the local ICT sector. The collaboration between both the public and private sectors in enhancing the development of the local ICT sector signifies that this is a team effort.”

Badlisham also added that, “The post-Awards success experienced by these past winners demonstrates their achievements and capacity to provide such generous sponsorship for this year’s awards.”

He explained that the MSC Malaysia APICTA Awards 2008 Programme, now in its ninth year, saw the highest number of nominees ever with an increase of 37, from the previous 321 submissions in 2007 to 359 nominees this year.

Winners of the MSC Malaysia APICTA Awards 2008 will stand a chance to represent Malaysia at the annual International APICTA Awards 2008, which will be held later this year in Jakarta, Indonesia.

Collaboration between public and private sectors

Badlisham explained that the MSC Malaysia APICTA Awards recognised outstanding achievements in ICT amongst students, technopreneurs, small and medium enterprises (SMEs), and operating organizations in Malaysia who have contributed to the development of the MSC Malaysia initiatives or who have developed applications and services for the benefit of Malaysia.

“The MSC Malaysia APICTA Awards 2008 is a successful example of the collaboration between the public and private sectors in their efforts to enhance the development of the ICT industry in Malaysia,” he said. “These joint efforts go a long way towards nurturing the local talent pool and developing a knowledge-based society, whilst transforming Malaysia into a preferred global ICT hub.”

Some of the sponsors for the MSC Malaysia APICTA Awards 2008 are also previous winners of the MSC Malaysia APICTA Awards Programme. These include local companies such as Cuzzy Media Sdn Bhd, Jobstreet.com, Asia Pacific University College of Technology and Innovation (UCTI), ASTRO and Redtone International Bhd.

“The return of these winners as sponsors for the MSC Malaysia APICTA Awards Programme demonstrates the leverage that the Awards Programme provides to participants, and the local ICT sector in general, in reaching out to a global audience,” said Badlisham.

Malaysian ICT industry believes currency fluctuation has minor impact

UPDATED: 20:41, March 23, 2007

The fluctuation of the ringgit against the U.S. dollar will have minimal impact on the local information and communications technology (ICT) industry, the country's national ICT association said on Friday.

"The fluctuation of the ringgit against the U.S. dollar is minimal and gradual hence the impact on imports of ICT products and services is not significant," said the Association of the Computer and Multimedia Industry of Malaysia (PIKOM).

The fluctuation of the currency should not cause any alarm if it continues to fluctuate within several percentage points as long as it is gradual, said PIKOM Chairman Lee Boon Kok.

As far the as pricing of imported products is concerned, currency is only one factor, he said.

Both manufacturers and importers may have some gains from the stronger ringgit when they buy from overseas suppliers but there are also other costs involved in their entire operations, Lee said.

Lee stressed that stronger ringgit does not surely make foreign products cheaper, but it would make Malaysian products and services more expensive on the world market.

One way that exporters could mitigate the influence of the fluctuation of the currency is to make the contract in the targeted market currency rather than in the U.S. dollar," Lee suggested.

PIKOM is the association representing the ICT industry in Malaysia. It consists of about 650 member companies, which provide a whole spectrum of ICT products and services and command about 80 percent of the total ICT industry in Malaysia.

Source: Xinhua

ICT AND ELECTRONICS INDUSTRY IN MALAYSIA

Malaysia har en meget veludviklet ICT og elektronikindustri. Dette sektoroverview belyser markedsmuligheder for danske virksomheder i Penang og inden for Malaysias Multimedia Super Corridor. Overviewet beskriver således både muligheder for danske virksomheder, der producerer eller udvikler hardware og software.

Du kan læse mere på den underliggende side, eller downloade den samlede rapport i PDF-format her.

Introduction:
There has been a structural transformation of Malaysia’s economy over the last 40 years. The country has progressed from an economy dependent on agriculture and primary commodities to a manufacture-based, export-driven economy spurred by high technology and capital-intensive industries.

During the last decade Malaysia has experienced a rapid development that places the country on the world map within the high-tech sector, including segments such as Information and Communications Technology (ICT), hardware and software, and IT-services in general. Several programs and projects have been implemented to encourage a wider diffusion of ICT in the economy. The key initiative is the Multimedia Super Corridor (MSC), which is a hub designed to promote multimedia products and services, by bringing together a legislative framework and a next-generation telecommunications infrastructure.

The Malaysian government still promotes the country’s manufacturing based electronics industry, thus also providing excellent opportunities for Danish companies within this sector - especially in relation to sourcing, outsourcing and setting up local production facilities.

Market Size Indicators:
To create an overview of the Malaysian ICT and electronics industry and point out some possible market opportunities for Danish companies this section firstly provides a brief description of the Multimedia Super Corridor followed by a presentation of market size indicators of the electronics industry in Malaysia. The section is concluded by a more specific introduction to the electronics industry in the state of Penang.

The Multimedia Super Corridor
The MSC’s location is currently within a 15 km wide and 50 km long zone, starting from some of the tallest buildings in the world – the Petronas Twin Towers – down south to the Kuala Lumpur International Airport (KLIA). The main components of this corridor are Kuala Lumpur City Centre, KLIA, a technology park and the two newly established intelligent cities Cyberjaya and Putrajaya. These components are bound together by a 2.5-10 gigabit digital fibre-optic network, providing high-speed computer links.

The MSC aims to revolutionise how Malaysians and others in the region do business, especially in relation to companies developing or using leading multimedia technology. As the MSC grows it is expected to provide the catalyst for the IT development in Malaysia. Various incentives have been introduced to encourage foreign partners to conduct R&D locally and promote joint ventures to enhance local technological capabilities. These incentives, also known as ‘The Bill of Guarantees’, include the government’s commitment to providing world-class physical and information infrastructure, freedom of ownership (i.e. no requirement for Malaysian participation), unrestricted employment of foreign knowledge workers and freedom to source capital globally. Furthermore, it is possible for foreign companies to receive income tax exemption for up to 10 years and a 100 % investment tax allowance for five years.

The Three Phases of the MSC
The planned development of the MSC over the time span from 1996-2020 has been divided into three phases:

· Phase 1: 1996 – 2004
Successfully create the Multimedia Super Corridor south of Kuala Lumpur

· Phase 2: 2004 – 2010
Link the MSC to other cybercities in Malaysia & worldwide

· Phase 3: 2010 – 2020
Transform Malaysia into knowledge-society

The first phase of the MSC has been successfully concluded. Some of the world’s most prominent ICT companies have established operations within the MSC, including companies such as Ericsson, IBM, Nokia, Intel, Sun, Computer Associates, etc.

The MSC is now into the tail end of its second phase, where the overall goal is to set up Cyberjaya linked high-tech centres throughout Malaysia and thereby bring the high-tech ICT benefits to the rest of the country. One of the most interesting aspects in this is the expansion of the corridor to Penang, which is expected to deepen and further technological growth in this state. This will be described in more detail later in this section.

Flagship Projects/Focus areas
To get the development of the MSC started, seven focus areas for multimedia projects have been identified. The focus areas provide concrete project opportunities for ICT companies throughout the world to collaborate with the Malaysian government in creating and implementing innovative ICT solutions.

Cyberjaya
Cyberjaya is one of the two intelligent cities established within the corridor. The other intelligent city, Putrajaya, is set to function as the Government’s new headquarter. Cyberjaya is established to become the headquarter for private companies. The aim is to create a multimedia catalyst centre for global R&D and design with the capacity to be the operational headquarters for multinational firms wishing to direct their activities using multimedia technology.

Cyberjaya is one of the most interesting aspects of the MSC, due to its high concentration of companies focusing on technology. As of December 2008, Cyberjaya hosts 474 companies, encompassing 30 multinationals and 444 home-grown companies with MSC-status. This can provide several opportunities for Danish companies seeking to identify local partners or customers. The high concentration of companies also provides excellent networking possibilities. It is projected that the total number of MSC-status companies will reach 500 within the project timeframe.

Companies with MSC-Status
There are presently a total of 2,000 MSC-status companies operating within a number of different sectors, ranging from software development to wireless technologies. This number is projected to increase to 2,500 by 2010, generating 100,000 jobs nationwide.

The major focus of the companies operating within the corridor is still on software development. One of the strengths of locating software development activities in Malaysia and within the MSC is the large talent pool of skilled English speaking developers with many different nationalities, making multi-lingual development possible.

There are currently more than 75,000 IT and engineering graduates working in Malaysia. In particular the many Chinese natives among these have created the opportunity for companies to develop software for the Chinese market, while still reaping the benefits of being located in Malaysia

The education level in Malaysia is high compared to other countries in South-East Asia. The country is more culturally oriented towards the West, eroding cultural or language barriers amongst employees in business organisations. Malaysia’s long exposure to Western business culture has attracted various American and European multinational companies, enabling them to establish large development departments in the country. Malaysia has considerable experience within the software development industry, with broad competences in .Net, Java, J2EE, C++, PHP, embedded software, Multimedia and databases such as MySQL, Orcle, SQL Server, Sybase, etc.

Malaysia has a mature IT development industry comprising IT professionals with more than 20 years experience. Their educational backgrounds vary from a national degree to education from the US, England or Australia combined with an extended international work experience.
Malaysia offers one the lowest salary inflations in the world by less than 5 % and the price of hiring local developers is under 1/3 of the cost of hiring the equivalent number of Western developers. Moreover, Malaysia supplies productive and job loyal employees.

Knowing the importance of having a qualified human capital has led to the establishment of MSC Malaysia’s Knowledge Workers’ Development Institute (KDi) in 2005 to carry out various training programmes as stop-gap measures in order to provide established and start-up ICT companies with knowledgeable workers.

In 2007, there were over 1900 firms operating with MSC-status in Malaysia, local companies made up about 1400 of these companies, followed by more than 400 foreign-owned companies.
Furthermore, almost 50 companies of the 1900 companies with MSC-status were companies in 50/50 ownership. The fact that the majority of the joint ventures established are between local and foreign companies, even though 100% foreign ownership is not prohibited, clearly shows that there are several opportunities to be explored for foreign companies in Malaysia.

The Electronics Industry in Malaysia
Malaysia’s IT industry is a growth sector, mirroring the rapid expansion of e-commerce worldwide and the demand for the related hardware appliances, software and Internet related products and services. As one of the leading producers and exporters of semiconductors and integrated circuits in the world, Malaysia has developed a strong manufacturing base for high-end consumer electronic goods, such as various ICT products and computers and parts. Malaysia is particularly known for its production and semiconductor devices, memory chips, computer monitors and disk drives.

Made-in-Malaysia electronics products are diverse and fall into three categories: electronic components, consumer electronics and industrial electronics. These goods are sold globally, with exports of semiconductor devices valued at US$ 31.13 bn., accounting for 40% of total electronics exports in 2007. The export-oriented electronics industry now has more than 900 companies in production, where international players like Intel and Motorola attest to the quality and competitiveness of Malaysia as a production country.

In 2007, gross output of the industry totalled US$ 61.6 bn., while the industry’s exports amounted to US$ 83.2 bn. This makes up 58.9 % of Malaysia’s manufactured exports and 44 % of the country’s total export. Greater outsourcing activities and software development has helped to enhance the sector’s growth. The output of semiconductors increased by 3.6 % in 2006 and by a further 4.6 % in 2007, however, the semiconductor output is forecast to increase by 2.3 % in 2008, the lowest growth rate due to the weaker global market.

The Electronics Industry in Penang
The northern Malaysian state of Penang is one of the most interesting areas in Malaysia for companies within the ICT and electronics industry. The state, which now populates some 1.5 mio people, has undergone an intensive and impressive process of industrial and technological transformation in the past 30 years. It has moved from being labour intensive with low technical processes into more technology-, skill- and capital-intensive production processes. Today Penang is also known as the ‘Silicon Island of the East’.

Penang pioneered Malaysia’s first Free Industrial Zone (FIZ) to initiate and facilitate the development of export-oriented manufacturing. There are now two FIZs and five industrial parks in Penang. Favourable incentives for the investors, the strategic geographical position of Penang, a stable government, well-developed and modern infrastructure facilities combined with a well educated workforce are all key factors why Penang has long been and will continue to be a major attraction for investors and foreign companies seeking Malaysian partners.

Companies in Penang
In 2005 (latest up-date available) there were already more than 700 companies operating in the industrial parks in Penang. Of these, 162 are involved in the electrical and electronics sector (E&E). This sector serves as Penang’s high-tech industry hub, hiring a total of 97,343 workers or 58.5% of the state’s total workforce (2005 estimates). It also hired the largest number of engineers, numbering 6,911 of the total 8,766 engineers in Penang’s technology parks (2005 estimate).

The most dominant areas within the E&E sector are semiconductors and wireless telecommunications, while supporting automation products is an area of increasing importance. In the field of semiconductors, world leaders such as Intel, AMD and Fairchild have been in Penang for more than 30 years. Motorola and Agilent are very big players in the area of wireless communications. Although these companies are some of the most prominent players within their fields, many smaller and local companies within the E&E sector are situated in Penang. Opportunities for Danish companies may therefore both be found as a supplier to one of the larger multinational companies and in relation to sourcing or outsourcing to the smaller companies.

Datuk Wong Siew Hai, the former vice-president of Intel’s technology manufacturing group suggests that Penang could build a niche in supporting automation products and in shared services. The industry could tap into the shared services and business process outsourcing market as many multinational companies in Penang are looking into automating and consolidating backroom operations.

Currently, Invest Penang (state government development authority) is actively promoting industries that are capital and skills intensive and high value added, such as advanced electronics; IT related products and services, advanced materials, high-tech and high value added components, etc.

Software Industry in Penang and the Expansion of the MSC
Software development is one of the areas, which fall under Invest Penang’s initiatives to promote higher value added activities in Penang. In this regard, the Penang state government has created the Software Consortium of Penang (SCoPe), which is set up to nurture and strengthen the development of the industry. As of May 1, 2007, the SCoPe had 46 affiliated member companies operating within the Penang software industry. However, the software industry in Penang is still relatively small compared to the massive concentration of such companies within the MSC south of Kuala Lumpur.

Penang is the first state in Malaysia to be awarded the MSC Malaysia Cybercity status. Officially known as the Penang Cybercity, phase 1 (PCC1), it provides a hi-tech growth platform for industries and businesses. This area is growing as the MSC, in line with the second phase of the MSC development, recently has been extended to include parts of Penang’s largest industrial park Bayan Lepas industrial park and its vicinity. The second and third MSC Malaysia zones in Penang will be launched on the mainland Penang in Bertam and Batu Kawan after 2008. This entails that companies in Penang will be able to benefit from the same incentives as the MSC-status companies located within the corridor, such as in the intelligent city of Cyberjaya or in a technology park.

Market Trends:
There has been a very positive development within the ICT and electronics industry in Malaysia the past couple of years. A recent forecast conducted by the International Data Corporation (IDC) expects this trend to continue. IT spending in Malaysia reached US$5,600 mio in 2008

Figure 2 - Malaysia’s IT Spending Forecast 2008-2012
(see pdf-file p. 9)

Source: IDC

As illustrated in Figure 2, the three segments services, software and hardware will all experience steady growth in the years to come. However, software is expected to enjoy the highest growth rate of about 25 %. The hardware market still represents the biggest IT spending share in Malaysia’s IT market, indicating that this sector will continue to be one of the driving forces in the Malaysian economy.

Shared Services and Outsourcing
The potential in shared services and outsourcing in Malaysia has increased dramatically amid the economic slowdown. According to Outsourcing Malaysia chairman David Wong, the industry has been growing at double the 15 % global growth currently and this growth is expected to continue.

Shared services and outsourcing activities has been one of focal areas of Multimedia Development Corporation (MDeC). Currently, the government estimates that the shared services and outsourcing industry in Malaysia will hit US$2 bn by 2012 if the double-digit growth persists.

In 2005 the MDC estimated that Malaysia will be able to generate as many as 100,000 jobs in this sector under the next Ninth Malaysia Plan (2006-2010). However this amount has increased due to the dramatic growth and the industry is now estimated to generate some 300,000 jobs by then with a target growth of 40-45 %.

Market Evaluation:
From being the world’s largest producer of rubber and tin, Malaysia is today one of the world’s leading exporters of semiconductor services, computer hard disk drives as well as audio and video products. This development creates business opportunities for Danish companies in Malaysia. These opportunities currently exist among others in relation to sourcing and outsourcing – primarily in Penang, but also in the area of software development and business process outsourcing – primarily within the Multimedia Super Corridor.

Evaluation of the Multimedia Super Corridor
The Government of Malaysia aims to attract leading companies of the world to locate their ICT industries in the country, undertake research, develop new products and technologies, and export from this base. Foreign companies are therefore most welcome in Malaysia and those who decide to join the Corridor enjoy several incentives and privileges.

The Danish embassy has spoken to foreign MSC status companies during the first phase of the Corridor. In general, all of them are rather satisfied with being a part of the MSC. They have all faced some difficulties at some point, but nothing of major importance. They all see the MSC as a good place to start if a company wishes to start-up their business somewhere in Asia, as the MSC offers very attractive benefits, especially when it comes to hiring foreigners, which all the companies have taken advantage of.

Another important aspect of being located within the corridor is having the opportunity to network with other MSC companies, which is one of the essential things for surviving within the Asian business culture.

Evaluation of the ICT and Electronics Industry
Malaysia, in general, has developed a strong and diversified manufacturing base within the ICT and electronics industry. The embassy finds that Penang, in particular, offers very interesting business opportunities due to the high concentration of companies within the industry combined with an attractive business environment.

In Penang, Danish companies of all sizes have the opportunity to find suitable local partners within a large number of sectors, as well as profiting from the incentive established to attract foreign investments. A Danish delegation to Penang in November 2004 reviled that the state offers great possibilities for locating the right business partner, as there are many SMEs with international experience operating there.

The expansion of the MSC to include parts of the Bayan Lepas industrial park in Penang will provide Danish companies with future opportunities – also within software.

INFORMATION & COMMUNICATIONS TECHNOLOGY

The EUMCCI ICT committee offers a platform for members to network to discuss and raise issues in the ICT sector. The committee organises talk sessions with guest speakers from the government to talk about the development in the sector and new regulations.

MORE INFO:
Information, Communications and Technology is a highly dynamic and innovative industry that drives economic and social progress in all the economies around the world. It is estimated by the year 2015 that over 5 billion people will be connected and much of that is because of what the ICT industry delivers. It can be demonstrated that there are multiplying effects of the implementation of many of the ICT solutions, services and know - how that benefits all of us and improve the GDP growth of many economies including Malaysia.

Since the early 90s Malaysia was one of the first developing countries to adopt information and communication technology to grow its economy. In 1996 Malaysia launched the Multimedia Super Corridor (MSC) project. The intention of the project is to create a world class ICT infrastructure and ideal environment for ICT related production. Two smart cities have been developed within this corridor, namely Putrajaya and Cyberjaya. It comprises a high-speed link network able to support about 10Gb/s connecting Malaysia to Japan, ASEAN, Europe and US.

The government wants to place Malaysia as a regional and global multimedia hub, For these reasons it has granted several incentives, mainly tax breaks, in order to attract multinational companies. The MSC aims also to improve the competitiveness of the existing companies operating in Malaysia. Currently, there are more than 1,900 ICT companies operating within the MSC Malaysia area, ranging from Internet-based business solutions and services providers to software application and services providers. Some of the sectors where Malaysian ICT companies can provide world-class applications include Financial Services Industry (FSI), Telecommunications (Telco) and e-Government services.

The telecommunication sector in Malaysia has grown significantly in the past decade. At the end of 2006 around 20 million mobile accounts were active, which is a penetration rate of just under 80% of the population. The fixed line penetrations have declined from 16.6% at the end of 2005 to 16.2% in the first three quarters of 2006.

In December 2006 all prepaid subscribers had to register their number at one of the main telecom providers. A regulation for the near future to open up the competition could be the introduction of number portability, which gives customers the opportunity to retain their number as they migrate to another provider.

ICT industry holds key to greener world

Star, Tech Central

Published: Thursday June 25, 2009 MYT 10:57:00 AM

KUALA LUMPUR: Industries that utilise the least amount of ICT (information and communications technology) are the worst offenders in relation to carbon dioxide emissions, said chipmaker Intel Corp.

It said that the ICT industry accounts for 2% of carbon dioxide emissions worldwide while the other industries are responsible for the remaining 98%.

General manager of eco-technologies at Intel, Lorie Wigle, said a study by Gartner shows that the transportation, construction and electrical industries can be more energy efficient.

“These industries would be greener if they took advantage of the latest technologies,” she said. “We believe ICT can benefit every other industry and we are taking the opportunity to offer these green technologies to governments and industries.”

She said Intel is in talks with governments in various parts of the world, making proposals and offering advice on turning their industries into more eco-friendly organisations.

Such meetings are being held with the Malaysian Government, according to Wigle. She said Intel has met with Energy, Green Technology and Water Ministry, as well as the Multimedia Development Corp, guardian of the MSC Malaysia initiative.

The proposals put forward at these talks include the construction of smart buildings in the country that promote green by employing efficient energy-management systems.

“There is a lot of enthusiasm from the Government and its agencies over becoming more energy efficient and we hope to be able to announce something concrete in the near future,” said Wigle.

Intel is also consulting and sharing information with national applied research body, Mimos Bhd, on frontier technologies and regional trends related to climate change.

It hopes that its efforts will eventually translate into government policy.

Malaysian ICT Industry Celebrates Achievements with Ninth MSC Malaysia APICTA Awards

• By Faizolhardi Zubairy
• Published 15 October 2008
• Press Releases
• Unrated

18 awards of distinction given out to commercial organizations and academic institutions

KUALA LUMPUR, October 15, 2008: As the curtains drew at the end of the Ninth Annual MSC Malaysia Asia Pacific Information and Communications Technology Alliance (APICTA) Awards 2008 last week, the 18 winners could reflect with a sense of accomplishment and renewed vitality for the coming year.

The 2008 MSC Malaysia APICTA Awards, themed “Stimulating Creativity & Excellence in ICT

Information and Communication Technology'); return false" style="text-decoration: none; color: rgb(0, 102, 204); border-top-width: 0px; border-right-width: 0px; border-bottom-width: 0px; border-left-width: 0px; border-style: initial; border-color: initial; ">ICT”, marked the inaugural partnership between Multimedia Development Corporation (MDeC) and Association of the Computer and Multimedia Industry Malaysia (PIKOM) to jointly organize the annual ‘industry Oscars’ for the Malaysian ICT industry.

This year’s MSC Malaysia APICTA Awards received a record 359 nominations for a total of 18 awards, up from the previous year where there were 321 nominations. The range of awards presented that evening was capped by the Prime Minister’s “Best of the Best” Award which this year went to FSBM Holdings Berhad for their UNOS product.

The recipient of the Prime Minister’s “Best of the Best” Award will also attend a week-long entrepreneur development programme at the Sloan School of Management at the Massachusetts Institute of Technology (MIT).

In addition, there were also two newly-introduced categories: “Best of e-Inclusion and e-Community” and “Best of e-Health” category.

Winners of this year’s MSC Malaysia APICTA Awards will represent Malaysia at the International APICTA Awards, which will be held in Jakarta, Indonesia, in November 2008. Then, the winners will further represent Malaysia at the World Summit Awards (WSA), which will be held in Belgium next year.

On the same note, the winners of this year’s Awards will have the opportunity to undergo development programmes under the MSC Malaysia initiative.

Dato’ Badlisham Ghazali, Chief Executive Officer of MDeC, said “MSC Malaysia will continue in its efforts and commitment, to push the progress and development of our local ICT industry, so that Malaysia can become a true Knowledge-based economy and ensure wealth creation and well-being for the society and businesses alike.”

In an address read by YB Datuk Dr. Maximus Johnnity Ongkili, Minister of Science, Technology and Innovation, on behalf of YAB Dato’ Seri Abdullah Haji Ahmad Badawi, Prime Minister of Malaysia, at the Awards ceremony, he said “I am heartened to note the theme of this year’s MSC Malaysia APICTA Awards – ‘Stimulating Creativity & Excellence in ICT’. Indeed, creativity and excellence, along with innovation, are the new components of economic value in a modern global economy and must continue to be nurtured if Malaysia is to successfully transform into a Knowledge-based economy.”

The winners of the Ninth Annual MSC Malaysia APICTA Awards 2008 are as follows:

• Prime Minister’s Best of the Best
  FSBM Holdings Berhad
  Product: UNOS
  Having received recognition from three international bodies, UNOS PRO is the first in the world to combine voice, messaging and service deliveries under one platform. It is a mobile phone midlet that allows users to have free push email and free SMS within the worldwide UNOS community, and comprehensive voice features, including a roam free solution.
  

• Best of Primary Student Project
  Sekolah Kebangsaan Taman Universiti
  Project: Si Tanggang – The Animation
  
  
• Best of Secondary Student Project
  Foon Yew High School
  Project: Remote Rescuing Unit
  
  
• Best of Tertiary Student Projects – Software / Hardware
  Universiti Malaysia Sarawak (UNIMAS)
  Project: Finger Tracking and Bare-hand Posture as an Input Device Using Augmented Reality
  
  
• Best of Tertiary Student Project – Creative Multimedia
  Universiti Malaysia Sarawak (UNIMAS)
  Project: An Interactive Augmented Reality Game – 3D Aeroplane Games (3DCoolPlane)
  
  
• Best of Media & Entertainment
  LimKokWing Film & Television Academy
  Project: Barricade by Love Me Butch (music video)
  
  
• Best of Financial Applications
  GHL Systems Berhad
  Product: NetTransact Solutions Suite
  
  
• Best of e-Inclusion & e-Community
  Asia Pacific Institute of Information Technology (APIIT)
  Product: ScreenShield3
  
  
• Best of Research & Development
  GlobalCLAS™ Technology Sdn Bhd
  Product: PICSECUREID™
  
  
• Best of Start-up Companies
  Asia Media Sdn Bhd
  Product: TransNet@KL
  
  
• Best of Applications and Infrastructure Tools
  Arahe Solutions Sdn Bhd
  Product: Arahe SiteCelerate
  
  
• Best of Security
  Nexbis Sdn Bhd
  Product: Nexbis National Security Solution
  
  
• Best of e-Logistics
  BSMART Technology Sdn Bhd
  Product: BSMART Commercial Vehicle Operation Services (b’CVO)
  
  
• Best of Communication Applications
  FSBM Holdings Berhad
  Product: UNOS
  
  
• Best of e-Government & Services
  Sarawak Information System Sdn Bhd
  Product: Integrated Court System (ICS)
  
  
• Best of Industrial Applications
  Devices World Sdn Bhd
  Product: iSCADA
  
  
• Best of e-Learning
  Myfingo Sdn Bhd
  Product: MyVBOT, The Adventure
  
  
• Best of Tourism & Hospitality
  Universiti Malaysia Sarawak (UNIMAS)
• Product: Augmented Reality System for Recognising Text on Street Signs for Tourism