Thursday, August 17, 2006

MSC: "It's Who You Know, Not What You Know"

Well, you all might know that Multimedia Super Corridor (MSC) or now renamed as MSC Malaysia, is celebrating its 10th anniversary this year. But how many birthday bashes does it have? Well, there was one earlier during April, but it seems that there's another one this coming Friday till Sunday. From Utusan Malaysia:

Birthday not enough?

Also, wah...15 years later (i.e. Year 2020), we're all getting digital TV!!! Big news!!!

Now, how would you see the ICT sector in 15 years' time? Nevermind the 'bloggers beware' thingy. Screw those bloggers. Great hindrance to our great holy ICT agenda indeed!

Here, Asia Times Online has an article on MSC and the Vision 2020 on 16th August. Here's some excerpts:

Malaysia's distant 2020 vision
By Ioannis Gatsiounis

To Mahathir, the MSC and Cyberjaya, which in Malay translates to "cyber success", seemed a visionary, win-win proposition.

Nowadays, nothing informs Malaysia's sense of success or failure more than the fate of its high-tech sector. Yet it's becoming increasingly clear that the country's so-called 2020 vision is fast falling out of focus. Malaysia now lags behind both China's and India's science and technology sectors, and regional rivals Singapore and Thailand now attract more foreign direct investment. Even Malaysia's political leaders have at times lamented the country's "first-class infrastructure, but third-class mentality".

Nor has private-sector innovation taken off to the degree first envisaged by government policymakers. To the contrary, the glaring lack of home-grown technology firms means that holders of information and technology degrees currently make up about 20% of Malaysia's unemployed university graduates, who apparently lack the knowledge and skills needed to compete in the global technology marketplace.

When the government has tried to fill the private-sector gap, it has often missed the mark. The government's pet Information Communication Technology projects, including the Smart School Project, the Worldwide Manufacturing Web and Borderless Marketing Flagships, have all flopped because of mismanagement, overspending and poor execution, critics say. There are recent reports claiming that as many as 90% of state-led ICT startups have gone belly-up, according to Technopreneur Association of Malaysia president Farith Rithaudeen.

That poor record has been a drag on the entire science and technology sector, souring private-sector sentiment and drying up the venture-capital funding for other so-called technopreneurial pursuits, including the startup ICT ventures that should be leading the country up the value-added information-technology ladder.

Consider, for instance, the case of Sentinel Technology, a small Malaysia-based research-and-development-oriented ICT firm. Mohamad Asendy, the startup's chief executive officer, said his company recently developed new anti-piracy software that he contends has the capacity to become a global market leader.

The company even held discussions with Microsoft's Malaysia division, which according to Asendy was duly impressed with the innovation and encouraged Sentinel to divulge how the technology works so that Microsoft technicians could test its effectiveness.

Asendy said he preferred first to formalize legal protection for his firm's innovation, but he lacked the RM300,000 (US$81,500) he needed to apply for a US patent. The Malaysian government offered him a RM50,000 grant, Asendy said, but in efforts to land the additional funding needed for the requisite marketing, accounting and legal requirements to apply for the patent, he was frequently asked in exchange to give up a majority stake in the intellectual property.

When he tried to obtain further government funding to patent his innovation, he was first directed to the Internal Affairs Ministry, which after a long wait redirected him to the Science, Technology and Innovation Ministry, he said. From there, he was told he would first have to get MSC status before he could apply for funding. The innovation, many months later, still is not legally protected.

Government hindrances

The government is often at the root of Malaysia's innovation problems, scientific surveys say. A Global Entrepreneurship Monitor, a worldwide research project to be released soon that aims to describe and analyze entrepreneurship processes, recently surveyed 45 local ICT experts and 2,000 Malaysian nationals about the country's entrepreneurial environment.

The study's results reflected poorly on the government's performance, claiming that its policies disfavor new firms, and that government bureaucracy and regulation and licensing requirements impede new firms from expanding. It raised doubts about the government's competence and effectiveness in supporting new and growing firms. The study singled out the lack of financial support, quality of education and training, and overall market openness as other main factors holding back Malaysian entrepreneurs.

For all these discouragements, however, Prime Minister Abdullah Badawi's government is not abandoning his predecessor's high-stakes, high-tech dream. In part, that's because it's impossible to brush the ambitious scheme under the rug. Wired with high-speed fiber optics, the MSC spans a whopping 777 square kilometers.

Moreover, the government has poured billions of dollars into the MSC's infrastructure and provided huge tax breaks to companies that have agreed to locate there. Meanwhile, Abdullah, who on the whole has demonstrated a disdain for the profligate megaprojects favored by Mahathir, has nonetheless reaffirmed his government's commitment, some say blindly, to all matters high-tech.

For instance, the Ninth Malaysia Plan (2006-10), the country's recently minted economic-policy blueprint, allocates RM1.5 billion to technology-oriented schemes, a 40% increase from the previous plan. One of the plan's main thrusts is "to raise the capacity for knowledge and innovation and nurture first-class mentality". The document is spangled with terms such as "knowledge-based", "science", "innovation" and "research and development".

To be sure, there have been some bright spots on Malaysia's ICT horizon. In May, US technology giant Dell announced it would set up a technology and development center in Cyberjaya. The center will focus on various value-added projects, including software design, and employ up to 1,000 workers.

Narayanan Kanan, senior vice president of the development division of the Multimedia Development Corp (MDeC), the agency tasked with overseeing and directing the MSC, said the Dell deal was a positive development - though he played down any suggestion that such major foreign investments were out of the ordinary. About 1,500 companies currently have MSC status and as many as 10 new ICT-innovating companies are being added to the corridor's roster each week, he said.

However, critics contend that Kanan's assessment is overly rosy and glosses over some of the hard-market realities looming over the MSC's long-term viability, which if not quickly addressed could eventually spell doom for the entire multibillion-dollar enterprise. They contend that many of the foreign MSC-registered companies have established centers here for basic distribution purposes rather than innovative pursuits.

The country's ICT sector is suffering from various "market failures", including a severe shortage of seed-funding and so-called angel investors, said Nazrin Hassan, an adviser to the Technopreneurs Association of Malaysia.

Hassan contends there are about seven times as many venture capitalists providing startup funding for technopreneurial ventures in neighboring Singapore. "In order to see growth in technopreneurs you have to take chances [with funding]. Many [Malaysian] technopreneurs have died off waiting for seed funding."

Meanwhile, Malaysia's education system requires a serious overhaul to spur the sort of innovation needed to move Malaysia up the ICT value-added ladder. As in many Asian countries, the Malaysian school system emphasizes rote learning and quantitative rather than qualitative education, critics say.

"We have not developed a capacity for lateral thinking," said Kuala Lumpur-based educationalist F R Bhupalan. "We have straitjacketed our students and not allowed them to engage in meaningful analysis."

The situation is exacerbated by draconian legislation, such as the Universities and University Colleges Act, which requires incoming university students to take a pledge to the government and bars them from joining political parties. Fear and feudalistic deference have long infected Malaysia's education system, experts say, and in turn the classroom often punishes rather than rewards creative thinking and risk-taking.

Nor has education funding always been well targeted. For instance, the government recently invested RM300 million on a Smart School program for 80 schools, which broadly aimed to center education on ICT. About 60% of the project's funding went toward hardware, and procurements were frequently smeared with allegations of mismanagement and misappropriation.

"Many ICT contracts were awarded to the wrong people, some with no experience or reputation, but with the right connections," said Chris Chan, chief executive officer of TMS, a Cyberjaya-based Internet company. "We have high tech visualized nicely - the implementation's been flawed."

That raises hard questions about the viability of about 500 new education-oriented projects detailed in the Ninth Malaysian Plan.

Read the rest of the article here.

Business in Bolehland- It's all about who you know, and not what you know. Even though you are 'Mohamad Asendy', if you know what I mean.

Or you could still spot if some single and available daughters are still around. You know, being an in-law helps a lot in doing business.

Oh, and you want Dell? Here, I give you Dell. Very addictive song indeed. Must see.

Also, as a background to the video above, watch this video:

Related posts:

BBC Features Malaysia Again; Lim Keng Yaik: "Internet Is Not My Business"

Malaysia Microchip (MM): Where Art Thou?

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