MSC story — a potential to be explored

It has given a vision for the country, as Malaysia seeks to stake a claim in a brave digital world of the future


Jack Ma said he was inspired to form Alibaba Group Holding Ltd after read- ing about Malaysia’s tech plan, the Multimedia Super Corridor (MSC).

The creator of the multinational e-commerce, retail, Internet, artificial intelligence and technology conglomerate said he found the idea inspiring.

“I thought, ‘Wow, this is a genius idea. If Malaysia can do this, why can’t China? Why can’t I do this myself?’

“So, Malaysia inspired me to create Alibaba,” said the 53-year-old Ma who has a net worth of US$39 billion (RM160.29 billion) and is listed as the 20th-richest person on earth by Forbes.

Conceptualised by Prime Minister Tun Dr Mahathir Mohamad in 1996, Malaysia’s MSC was a laudable initiative at that time when the world was witnessing the move towards the information technology (IT) revolution.

Successes, however, were mixed since its inception.

It managed to attract a reasonable number of established IT firms to the corridor in Cyberjaya, while the MSC-status companies rushed to enjoy various tax incentives offered under the MSC umbrella.

But the ecosystem did not take off, as envisioned in the likes of the Silicon Valley in the US, as the proliferation of dotcom companies were largely absent in Malaysia.

Sunway University Business School economics professor Dr Yeah Kim Leng said Malaysia is still far from reaching a critical mass of research and development, and innovation, as well as an entrepreneurial system that could lead the nation into the digital age.

“This is evident in the slow pace of technology adoption and digital readiness of most of the small and medium enterprises, while there are only a handful of large enterprises at the cutting edge of technological developments.

“At the same time, the policies and directions are sound. However, the underachievement is largely a reflection of the challenges of translating policies into actions and achieving the desired results,” he said.

He added that it has been challenging to create a self-sustaining and dynamic digital ecosystem involving both the public and private sectors.

But plans are already underway to revamp and revive the MSC.

Yeah welcomes the move as it would help the country move up the value chain of the digital economy.

He said the government and private sector must undertake a stocktake of the MSC’s strengths and weaknesses of existing efforts such as the Industry 4.0 and digital economies initiatives.

“This is to ensure a more comprehensive and coordinated policy framework and action plan. Importantly, good policy intentions and big ideas abound in various plan documents, but the implementation capacity and leadership remain the overarching constraint,” he told The Malaysian Reserve.

In terms of the potential of Malaysia still becoming a hub of growth for IT, Yeah said the country has good physical infrastructures, but its broadband facilities and services need substantial upgrading to unleash the potential of digitalisation in all aspects of the economy.

“The lack of skills is another binding constraint, although it can be overcome temporarily through a skilled foreign worker policy.

“Ultimately, the private sector must see the opportunities and take the plunge in investing in IT. Without investments in IT ventures, technology and skills training, the vision of a hub will be hard to realise,” he said.

He added that the country should continue to strive to be an IT hub as it will close the income gap with developed economies and a way to escape the middle-income trap.

On the other hand, Yeah said the creative industry should be seen as the bedrock of Malaysia’s creativity and innovative ability.

“It should be fostered hand-in-hand with the digital economy as they are both compatible and reinforcing, given that culture and arts are seen as the core components in the broader economic development context,” he said.

But the MSC has its success stories. The government’s push for electronic administration has seen many transactions done online. Hospitals are wired. People can conduct traditional over-the-counter transactions like renewing road tax, insurances and payment of summonses online.

It has boosted the country’s use of the Internet. Malaysia has one of the highest penetration rates for social media and the Internet — especially mobile ownership — in the world.

Online retails have flourished significantly. The creative industry has been boosted and the country has “icons” from series like BoBoiBoy, Upin & Ipin and Usop Sontorian. Many animated movies and TV series have been produced by local talents.

In 2013, some Malaysian animation artists from a local film production studio called “Rhythm & Hues Malaysia” took home an Oscar for Best Visual Effects for the movie Life of Pi, which was directed by Ang Lee.

The Malaysian talents were behind much of the computer-generated imagery effects for the scenes involving the ocean and Richard Parker, the Bengal tiger.

Meanwhile, KRU Studios’ latest animated film Wheely has already made headlines as it obtained strong international pre-sales in over 100 countries.

The film that took four years to complete has received orders from distributors from South Korea, China, Vietnam, the Philippines, Brazil, Argentina, Ecuador, Spain, Czech Republic, Russia, Poland, Germany and France.

In addition, the country’s gaming development industry has been growing where local developers are working to develop their own intellectual properties (IPs).

Magnus Games Studio co-founder DC Gan said the nation’s homegrown game studios are already making an impact to the global market as a lot of well-known games are being launched.

“At the same time, we are seeing talents coming back to the local industry to contribute — where it has created a positive and interesting scene.

“In addition, with the help of the MSC, new start-ups are able to rein-vest the revenue into the industry by training more talents and to expand the business and grow the industry,” he said, adding that in less than five years, the industry is expected to be more mature and stable.

He said with more game studios exporting their IPs and games to the global market, a sharp rise in the nation’s gross domestic product (GDP) is definite.

“Malaysia has been the leading industry for gaming in the region, and we are expected to generate billions of ringgit which will be contributing nearly double digits in percentage to the GDP.

“I do believe the figure will only keep rising up as more and more matured studios are penetrating the global market,” he said, adding that the MSC has been playing an important role in the future of the local game industry to gain access to the global market.

And with the advancement of technology, Gan said the industry has entered an era called “micro-international business” — which is operating in a small studio, but covering the world as a platform.

“With many ways to access that, our local talents are actually exporting more and more award-winning IPs and games titles into the global market. Hence, I believe if we remained focused in what we do, we will be able to create a sustainable and mature industry,” he said.

The MSC has its ups and downs. But it has given a vision for the country, as independent Malaysia seeks to stake a claim in a brave digital world of the future.