PENANG Chief Minister Tan Sri Koh Tsu Koon was beaming when he walked through the doors of the pressroom at the Equatorial hotel in Bukit Jambul, Penang last week.

And he had every reason to be.

After all, the recently concluded Multimedia Super Corridor International Advisory Panel (MSC-IAP) meeting was – for all intents and purposes – largely successful.

“Holding the MSC-IAP for the first time has been a big boost for Penang’s economy,” Koh told a room full of reporters.

“(And) the successful pickup in MSC activities here in the last eight months augurs well for Penang,” added Koh.

The MSC-IAP was held for the first time in Penang – a first for the island state since its inaugural launch at Stanford University, California in 1996.

This comes on the back of Penang being declared a “cybercity” by Prime Minister Datuk Seri Abdullah Ahmad Badawi in January.

The Multimedia Development Corporation (MDC), the custodian of the MSC, defines a cybercity as a self-contained intelligent city with a world-class business and living environment, and offering a full suite of the MSC Bill of Guarantees (BOG).

The BOG is a 10-point guarantee of various conditions undertaken by the Government and is promised to companies that successfully apply for MSC status.

The inauguration of Penang as a cybercity signalled a new chapter in the seven-year second phase for the MSC, where it is no longer be confined to the original 15 x 50km central zone anchored Cyberjaya and Putrajaya in the west, Kuala Lumpur International Airport in the south, and the Kuala Lumpur City Centre (KLCC) in the north.

Koh said the successes experienced by Penang speak for themselves and is evidenced by the number of MSC-status companies approved ahead of the initial target set by the MDC and the Penang Government.

“Our target was to achieve 30 MSC-status companies by year-end. I’m happy to report that as of last month, we have had 58 approved MSC companies as well as two MSC-status institutions – Universiti Sains Malaysia and the incubator Usains – making it 61 organisations which have attained the status,” he said.

Koh revealed that of the 58 companies, 30 were involved in software development, 17 in electrical and electronics product design, while 11 were engaged in other ICT-related industries.

“We hope to register even more MSC-status companies in the remaining four months of the year,” he said.

According to Wan Zailena Noordin, chief executive officer of investPenang Bhd, interest in applying for MSC-status has continued unabated since Penang was declared a cybercity.

“Part of the reason is because Penang offers something different to the local enterprises here,” she told In.Tech on the sidelines of the launch of the Malaysia ICT Month in Kepala Batas last week.

“Many companies that apply for MSC-status are not multinationals; instead they are homegrown companies embarking into software development and other ICT-related product and services,” she said, adding that MSC-status gives them an opportunity venture out on their own.

investPenang is a one-stop-shop agency set up by the Penang Government to manage and coordinate MSC-related activities, such as utilities, land and office matters, with various private companies and government agencies at the state and federal level.

Zailena also attributed factors such as the advanced infrastructure in Penang and the support it received from the state as well as from utility companies – including Tenaga Nasional Bhd, Pihak Berkuasa Air Penang and TM Bhd – as reasons for success.

Challenges faced
Despite the aforementioned successes, Koh said there is still much to do. Amongst the issues that need looking into is the enhancement and development of human resources, as well as the allocation of office incubator office space, he said.

“We need to hire capable resources – both Malaysians and non-Malaysians – to help with further development.

“Also, we need to encourage companies to set up incubator space and give them incentives and the flexibility to develop the space for their own use or to lease it to others,” he said.

Koh also said Penang needs to enhance existing niches by leveraging on a strong ICT base to drive its competitiveness while creating new niches by spearheading more knowledge-based activities.

“We are continually facing keen competition from countries such as India and China and our basic strategy is to differentiate ourselves by engaging in what we do best,” he said.

Koh said Penang is particularly strong in industries such as automation and machine equipment, precision engineering, ICT manufacturing, and software applications.

“These are areas where we can capitalise our strengths and build on our niches,” he said.

He said the state government has identified 10 drivers that will enhance and create niches for Penang’s next leap.

They include moving into new areas such as bio-pharmaceuticals and medical devices/instruments, developing marine biotechnology, promoting e-logistics/e-commerce, and promoting better industry and university collaboration.

Zailena said investPenang can also play a role for local technopreneurs.

“One of things we’re going to do is to bring these local player along to our foreign investment 'mission trips' so that they can gain a platform to publicise the achievements.

“There nothing like having these technopreneurs telling investors their own story instead of us doing so,” she said.

Measuring true success
According to Koh, MDC in collaboration with the state government is looking to benchmark Penang’s success in other ways, including coming up with relevant key performance indicators (KPIs).

“Bear in mind that we’ve only become a cybercity in the last eight months. We don’t have a magic wand to create success overnight,” he said.

Koh said while he fully understands that Penang “should not get caught up merely in the 'numbers game',” his government is in the process of gathering as much information so that the KPIs can be as accurate as possible.

“A good timeframe to reveal our report card would be one year after our launch,” he said, adding that a full-time MDC staff will soon be stationed in Penang help work on this.

investPenang’s Zailena said the absence of KPIs (for now) does not indicate that companies are not going about their business as usual.

“Many of the MSC-status companies may not have spoken or may have opted not to speak of their successes in getting jobs from the large multinationals for various reasons.

“They might just want to get on with it inconspicuously and work behind the scenes,” she said.