INSIDE MALAYSIA • JULY 69

Technology & Innovation

SNAPSHOT

OVERVIEWCrucial areas for development ..............70

PUBLIC AND PRIVATE OPINION

Cyberjaya .......................................................... 72

ANALYSIS OF INVESTMENT OPPORTUNITIES WITH PARTNERSNurturing innovation capabilities for the future .......................................................... 73

TOP 10 TECHNOLOGY & INNOVATION COMPANIES .................... 75

RATING BY INSIDE INVESTORKnowledge for development ...................76

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InsIde MALAYsIA • JULY 201270

overview

TECHNOLOGY & INNOVATION

Technology and innovation is one of the top performing sectors in Malaysia. The technology sector grew by double-digits percentage-wise in the first months of 2012.

The country’s remarkable economic performance has attracted attention from technology companies around the world. As the economy moved beyond low labour costs, industrial technology development, research and development and innovation became increasingly critical to continued growth.

The Ministry of Science, Technology and Innovation (MOSTI) is the lead ministry that formulates policies in the area of science, technology and innovation. MOSTI also implements many programmes related to the promotion of science and technology and national research and development activities. The National Council for Scientific Research and Development (NCSRD) is an advisory body comprising high-level representatives from the public and private sectors. The main function of the NSCRD is to provide advice and

direction on science and technology policies and priorities. MOSTI acts as the secretariat to the NSCRD. The council is chaired by the chief secretary to the government. Representations include the universities, public research institutes, key central government agencies and the private sectors. The council meets three to four times a year to deliberate on matters related to research and scientific advancement.

The authorities are recognising that research and development as well as technological innovations are essential to the Malaysian government’s strategy of sustainable development and towards a knowledge-based economy. MOSTI is pushing the sector with ambitious initiatives, which include several technology development funds. The core sectors are biotechnology, information and communication, industry, science and even space technology.

The Economic Transformation Programme (ETP) in Malaysia, which has identified 12 National Key Economic Areas (NKEA), is covering two such areas

Crucial areas for development

Malaysia’s technology and innovation industry is among the most buoyant among Southeast Asian countries. It is a thriving industry with first-class education facilities and broad investment opportunities underpinned by government incentives.

Malaysia’s remarkable economic performance has attracted attention from technology companies around the world.

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InsIde MALAYsIA • JULY 2012 71

overview

TECHNOLOGY & INNOVATION

that are related to the technology and innovation sector, namely electronics & electrical and well as communications, content & infrastructure. The electronic & electrical sector is one of the crucial areas of development, with Malaysia enjoying traditional strength in electronics manufacturing, acknowledged by major multinational companies. The sector accounts for RM37 billion or six per cent of the Gross National Income and RM250 billion, or 40 per cent, of total exports. The sector provides approximately 522,000 jobs for skilled and semi-skilled workers.

There are currently 1,900 active companies in this sector, spread across a diverse range of sub-sectors including the semiconductor and industrial electronic industries. The sector has been instrumental in the development of the Northern Corridor (semiconductors and industrial electronics), Klang Valley (sophisticated services), Johor (logistics intensive E&E manufacturing) and Sarawak (developing cluster for silicon substrate manufacturing), contributing significantly to the socio-economic development of the relevant communities. Supplementing the impact of these industries are emerging sub-sectors such as solar photovoltaic technology and LED lighting.

The targets that have been set for this sector comprise setting up new research and testing facilities, increasing the production of high-tech products such as wafers, integrated circuits, silicon and solar cells, as well as establishing research and development centers for advanced packaging. The long-term goals of the strategy, leading up to 2020, are to set up new solar-module and LED wafer plants, increase automation equipment manufacturing and creating a home appliance manufacturing hub.

In the communication, content and infrastructure sector, the aim is to drive continued growth in communications services and enable the paradigm shift from infrastructure and access to applications and content. This includes capitalising on next generation infrastructure opportunities with a particular focus on coverage, affordability and quality of access for all Malaysians.

For example, the programme of Connecting 1Malaysia aims to fast track the adoption of new, value-added communication services for business, household and government use by creating an ecosystem conducive to the accelerated implementation of these technologies. A three-pronged approach is being taken, comprising efforts to catalyse demand for new services, accelerate adoption and dismantle barriers that prevent large-scale deployments. Connecting 1Malaysia is planned to collectively generate RM1.8 billion in GNI and create 2,056 incremental jobs by 2020.

The communications, content and infrastructure sector will require more than 43,000 jobs by 2020. The sector will continue to grow professional development in the industry. In telecommunications, an education initiative was initiated to ensure that the number of graduates in relevant telecommunications and engineering fields would be met by 2020.

From the creative content and multimedia perspective, MOSTI has completed the framework of the Creative Industry Lifelong Learning Programme in collaboration with several key stakeholders such as Multimedia Development Corporation, the Ministry of Information, Communications and Culture and the Public Services Department. Further within the content

sector is the accreditation of creative talents led by the Creative Content Industry Guild. The critical targets for this sector are, among others, to raise the

amount of digital content, increase data center bandwidth, ensure 65 per cent broadband penetration together with ten per cent bandwidth price reduction and to provide 50 per cent accumulative online government services.

In the area of biotechnology, MOSTI has introduced a cluster concept to implement the National Biotechnology Policy and initiative, which is coordinated by the National Biotechnology Division (BIOTEK). Each cluster member provides services and facilities to support the programmes under the National Biotechnology Policy. The cluster includes Technology Park Malaysia, the Agro-Biotech Institute Malaysia, the Malaysian Biotechnology Corporation, Inno Biologics Sdn Bhd, the Malaysia Genome Institute and Ipharm. The latter is a multidisciplinary research institute that focuses its efforts on drug discovery and development. Through high impact research and development activities and strategic alliances with foreign research institutions, Ipharm aims to develop new pharmaceuticals and nutraceuticals with commercialisation potential.

The Agro-Biotechnology Institute Malaysia undertakes research, development and commercialisation projects related to agro-biotechnology in cooperation with various universities, research institutions and industry players. For small and medium companies with an entrepreneurial approach, Malaysia has set up a programme under the Malaysian Technology Development Corporation with the objective of promoting the commercialisation of science, technology and innovation developed by start-up companies. Eligibility criteria are that the start-up company is incorporated in Malaysia, 51 per cent Malaysian-owned and operated from technology centers based in a university or research institution. Fields of research should include agriculture, biotechnology and advanced materials.

The technology sector accounts for

in revenue of six per cent of the Gross National Income and 40 per cent of total exports.

RM37b

The communications, content and infrastructure sector will require more than 43,000 jobs by 2020. The sector will continue to grow professional development in the industry and will benefit from an education initiative.

InsIde MALAYsIA • JULY 201272

As of late September, the company was inviting incorporated local and international companies with a paid up capital of at least RM50 million to propose the master development plan, purchase and develop part of the land, and build a development that caters for the surrounding community while offering an international flavour to Cyberjaya.

Cyberjaya is known as Malaysia’s Silicon Valley, and Cyberview Managing Director Ir. Hafidz Hashim said potential GCC investors would find the prospect attractive.

“I know they [GCC investors] are always looking for opportunities to invest,” said Ir. Hafidz. “Apart from within the planned Cyberjaya City Center, the cybercity itself already has a projected RM3.73 billion worth of developments in the pipeline for 2012.”

The real estate sector is among the hot investment targets for GCC investors looking for safe destinations to which to allocate their money.

Reports indicate that property investment in Malaysia from the United Arab Emirates increased 11.3 per cent in the third quarter of 2011 compared to the same period in the previous year.

“Cyberjaya is designed with high-technology infrastructure, amenities and facilities that befit its status as a

Public and Private oPinion

choice location for ICT and multimedia, as well as one of the primary international locations for the global shared services and outsourcing sector. It truly is a one stop center in terms of setting up businesses.”

Investments in Cyberjaya have other benefits and incentives, including tax allowances for up to ten years, uncensored Internet, unrestricted hiring of local and foreign knowledge workers, and freedom of foreign ownership for MSC Malaysia status companies without the need for local ownership requirements.

All these are enshrined in the MSC Malaysia 10-Point Bill of Guarantees, a set of incentives and privileges that reflect the Malaysian government’s intention to provide an environment that is conducive to the development of MSC Malaysia status entities.

Cyberview is actively promoting investments in Cyberjaya, and is hoping foreign companies are lured by the city’s incentives to set up operations.

The company had a presence at the recent MIPIM Asia 2011 in Hong Kong, the region’s premier real estate conference, to promote Cyberjaya. Other international exhibitions that had the participation of Cyberview

in 2011 included CeBIT in Germany, CommunicAsia in Singapore, and GITEX

in Dubai, the latter of which gave the company opportunities to highlight business investment opportunities and the innovation produced by Cyberjaya-grown SMEs. The city boasts more than 500 commercial entities, including about 300 companies with special MSC status and more than 25 multinationals such as IBM, HSBC, Shell, and Dell.

Cyberjaya experienced a dynamic year 2011, tripling its 2010 land acreage sold from 203.83 acres at RM404.30 million to 646.30 acres valued at RM1.23 billion for 2011. This brings the total investments into Cyberjaya for 2011 to RM3.04 billion to date.

The city added 5,000 new housing units in 2011 – double that of 2010 –, and expects 35,000 residents over the next three years.

Dozens of projects for international and domestic corporations have been completed since Cyberjaya was created in the 1990s by former Prime Minister Tun Mahathir Mohamed, who wanted to boost Malaysia’s standing in the global ICT industry.

These projects now fill Cyberjaya’s cityscape. This is in addition to various public amenities and transport services available in the area, which lies close to the administrative capital of Putrajaya and only 20 minutes from the Kuala Lumpur International Airport.

Ir. Hafidz HashimManaging Director, Cyberview Sdn Bhd

TECHNOLOGY & INNOVATION

Attractive prospects for investors in CyberjayaCyberview Sdn Bhd, the landowner and entity responsible for spearheading development in Cyberjaya, the hub of Malaysia’s Multimedia Super Corridor, is searching the globe for contractors to build its latest project.