Malaysia

Facing competition from other states in Malaysia, neighboring countries and particularly China, the government of Penang has been very proactive at keeping the state on the cutting edge of investor needs.

"We're not very prominent in terms of news worthiness vis-à-vis China because we're very small. I joke with my staff that the entire population of the state of Penang is 1.3 million, while the population of China is 1.3 billion," says Koh. "So we work a lot with the companies that are here - like our existing Japanese investors - to assist them in transforming their Penang operations into high-tech centers. We are always ready to help them to get incentives from the federal government and even to innovate and devise more effective packages if necessary."

Keeping with the times

One of the driving forces behind Penang's success is the Penang Development Council. Founded in late 1969 and currently chaired by Koh, the PDC's mission is to ensure sustainable socio-economic growth through the continued satisfaction of customer needs. And they have been quite successful from the beginning.

The Penang Skills Development Center meets the training needs of Malaysia's modern workforce.

In 1972, the country's first Free Trade Zone (FTZ) was set up at Bayan Lepas on the island of Penang. Today, there are multiple phases to Bayan Lepas as well as a number of other industrial estates on the mainland.

The same year that the FTZ was established Penang welcomed its first eight multinational electronics companies: Advanced Micro Devices Export, Aglient Technologies, Clarion, Fairchild Semiconductor, Hitachi Semiconductor, Intel, Osram Opto Semiconductors and Robert Bosch.

Penang simply built up a reputation from there. "The eight pioneer companies who started here 30 years ago - four American, two German and two Japanese - were all here to celebrate the anniversary with us," Koh recalls. "What still makes us attractive to foreign investors is that we have built up a critical mass of skills and a supply base so it has its own momentum of synergy. We are known for our efficiency, our quality and our productivity. We are no longer a cheap, labor-intensive area, but we are very cost competitive for the higher value-added activities."

The value-add areas the PDC is pushing to develop in Penang include life sciences and bio-technology, R&D - especially in manufacturing technology and process engineering - design and tooling machining. Many of the companies here are also expanding operations to include logistics, customer service and back-operations services.

The skill behind the skills

Perhaps the most impressive aspect of Penang's industrial development over the decades has been the rise of a true community among investors. "Something you find in Penang that you don?t find in too many other places is a spirit of fraternity among the industry people - from the top management to the industry people to the members of government," explains Koh. "This is epitomized by the Penang Skills Development Center."

A joint effort between the government, industry and the academic community, the PSDC operates as a non-profit, industry-led organization that arranges training courses and programs that directly reflect the immediate needs of the business community.

"We are a complementary institution," says Dato' Boomler Sonchit, executive director of the PSDC. "There are government institutions that have already been set up to supply the basic human resources, but industry need has always outpaced supply, so it was important to establish a skills center."

The PSDC was set up in 1989 to provide Penang with a means to guarantee sufficiently skilled manpower for local and multinational investors in the state.

It functions as a society in which 96 fee-paying member companies and government representatives discuss their needs and pool their resources.

Dato' Boonler somchit, executive director of the Penang skills Development Center

Through the identification of gaps in needed skill areas, the donation of state-of-the-art equipment and the employment of top-notch lecturers and course facilitators, PSDC offers both generic and customized courses for members and non-members. Some programs run for one day, while others can last three years.

"The whole point is to have multinational companies come together to share what they know with local companies - to upgrade their capabilities for the benefit of everyone," says Boomler. "Well trained human resource is such a rare commodity, and it takes years to train somebody. The best way for you to be successful is to pool your resources to train the local workforce. That has been the basic philosophy behind the PSDC."

And in a very real sense, it has been - and still is - the philosophy of Penang in general.

TOP