Can Malaysia Escape the Middle-Income Trap? A Strategy for Penang
How can Penang upgrade and diversify its economy? This paper addresses this question using a number of methodologies that have been developed for assessing competitiveness and identifying the direction of future industrial evolution. The results sh...
| Main Authors: | , |
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| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090619092524 http://hdl.handle.net/10986/4165 |
| Summary: | How can Penang upgrade and diversify its
economy? This paper addresses this question using a number
of methodologies that have been developed for assessing
competitiveness and identifying the direction of future
industrial evolution. The results show that although Penang
was successful in attracting foreign direct investment to
the electronics industry, this has not translated into a
deepening of industrial capabilities or the nurturing of
innovation capacity in Penang. No large Malaysian firms in
Penang have taken the lead in innovation and there is little
new entry by local firms, despite incentives provided by
local and national governments are generous. Universiti
Sains Malaysia, the principal university in Penang, is
contributing through provision of skills, and it is
beginning to multiply university industry linkages. However,
the university s research activities are too limited and too
diffuse to significantly initiate innovation by local
industry. Under the current circumstances, and given its
relatively small size, Penang will have to try much harder
to strengthen its competitive advantage in its most
important industry -electronics- through actions that build
research capital. It will also have to increase its efforts
to develop the potential of other value-adding activities,
such as medical services and tourism. A strategy focused on
localization economies is likely to be the most feasible option. |
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