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Malaysia's tech super corridor has yet to make its mark

By Patrick Chalmers

CYBERJAYA, Malaysia (Reuters) - If a coffee shop, retail mall and miles of new roads tracked by sub-surface fibre optic cable are what it takes for Malaysia to rival California's Silicon Valley then watch out Bill Gates and friends.

But chances are they needn't worry yet.

Five years into ambitious plans for a home-grown, high tech hothouse, great tracts of oil palm trees have been cleared but little progress made towards spawning future world beaters like Gates' software giant Microsoft.

Various local technology companies say the country's Multimedia Super Corridor (MSC) project, whose aims they generally share and support, has got its focus wrong.

Their voices won't feature in this week's annual meeting of the MSC's international advisory panel, where tech thoroughbreds like U.S. computer maker Dell and chip manufacturer Intel, Finland's cellular phone firm Nokia and Japan's NEC Corp will pitch in with their ideas.

The MSC, a 15-by-50 km (9-by-31 mile) zone stretching from capital Kuala Lumpur south to the airport, aims to attract world-class technology companies to aid national plans for developed-country status by 2020.

With development and infrastructure costs of 28 billion ringgit ($7.4 billion), the project includes a Hollywood-style studio to lure Asian film-makers, a plan which has languished since a star-studded launch last year.

DEVELOPING FASTER THAN EXPECTED

Prime Minister Mahathir Mohamad admitted recently the zone, one of his pet projects, had not yet contributed as much to the economy as hoped but said it was developing faster than expected.

Suhaimee Abu Hassan, president of Xybase, a Malaysian systems integration company with a successful Internet-based, airport e-commerce platform, is outspoken in his criticism.

"I think it's still very much focused on real estate," he said of the corridor, which starts in the Petronas Twin Towers above Kuala Lumpur City Centre (KLCC).

"Being in KLCC and Cyberjaya, the cost is enormous. The only ones who can afford it are the bigger guys but what about the start-ups?"

Winning MSC status for a firm secures tax holiday benefits, easier rules on expatriate staff employment and funding for research. But it comes at the cost of relocation into the zone.

"If you want to encourage all these start-up companies, get them a cheap place. Split Cyberjaya in two, one for the poor people and one for people who can afford it," says Suhaimee.

He criticised the award of project contracts for the zone as having favoured a chosen few and chided MSC mandarins in the Multimedia Development Corporation (MDC) for their sluggishness.

No one at MDC was available last week to respond to Reuters questions by telephone, e-mail or even in person.

Mark Chang, CEO of Internet recruitment site JobStreet.com, welcomes the government's focus on building a knowledge economy but rejects the idea of moving his company from the northwestern state of Penang just for MSC status.

NEED MORE AREAS

"Not a lot of companies would be able to move without losing their human resources," he said. "The MSC should open up more areas around the country, not just one or two parks."

Bobby Pang, CEO and founder of One.cc, a multi-channel e-commerce service provider launched last year, also backs the MSC concept though without having checked it out for his firm.

"There's no sense of urgency because we don't see the immediate benefit to our business," he told Reuters by cellular phone on a business trip to Bangalore, one of southern India's tech zones and a regional rival to Malaysia's efforts.

Gripes about the MSC's focus, its relocation requirements or even its immediate relevance to companies, are all problems offering a reasonable chance of early solution.

More tricky for Malaysia in the medium term may be the quality of its local labour pool.

Bernama news agency recently quoted a Malaysian Science and Technology Information Centre survey of 5,000 members of the public, conducted last year, showing a steady fall in knowledge of science and technology issues since 1996.