TED Case Studies

MULTIMEDIA SUPER CORRIDOR

IDENTIFICATION
LEGAL CLUSTERS
GEOGRAPHIC CLUSTERS
TRADE CLUSTERS
ENVIRONMENT CLUSTERS
OTHER FACTORS

I. Identification

1. The Issue

This case study will examine the Multimedia Super Corridor (MSC) in Malaysia and its impact of trade and environment. This plan is part of the Vision 2020 program of the country. It also includes descriptions on the new international airport- KLIA, the Sepang Formula 1 Circuit, the new government administrative centre- Putrajaya, the new cybercity- Cyberjaya, the new business centre- KLCC and other MSC status companies. All these specialized projects are integrated into the MSC Project, which makes it one of the biggest projects in the region. Furthermore, it enables Malaysia to be among the most advanced countries in terms of technology and information system.

If all the companies are MSC status companies, there will be a high speed of electronic connection. This is better known as the Super Highway. Joining the MSC makes the country to have one of the most intelligent cities in the world. Its communication system and network will also be much more efficient and effective, hence saving time and money. Overall, Malaysian citizens will benefit from the use of the modern and advanced facilities found in the MSC.

Although the project consumes a lot of money and space, there is no lost incured. The government already allocated the amount of money for the project. Furthermore, in the long run, it will benefit the country. With the MSC, which is a huge project, Malaysia will be on par with the rest of the world. This will breath more confidence into foreign investors. They will in turn bring in more capital to be invested into the country. This not only increased the capital inflow, but also creates more job opportunities for the locals.

With the MSC, the government and businesses will go paperless. As a result, there will be less trees to be brought down. In other words, the project also takes care of the environment. Furthermore, all trees that were cut down will be planted in another area. Therefore, there will not be any loss of trees.

2. Description

Multimedia Super Corridor (MSC)

Everyone was optimistic and enthusiatic when the Prime Minister of introduced the idea of an Asia version of Silicon Valley in the nation. But like any other issues that involve the federal government, there are certain sectors that are worried of the influences of this Asia's version of Silicon Valley towards the nation and its people. Such sectors include the legal, geographic, trade, environment and, other factors, such as culture and special right.

However, there are a few disadvantages of the MSC. First of all, more jungles and trees will be cut down in order to facilitate the development of the MSC. This will create more concrete jungles in the region, which is very unfriendly to the environment. The second disadvantage is that during an economic downturn, where many companies faced financial difficulties, many cannot afford to join the MSC. Next is that by being computerized, the companies are more opened to hackers' treat. Very often, important information are stolen from the companies, causing it to lose lots of money. Finally, with the MSC companies all placed under one centre, there would be problems for consumers and users because they will have to go to specific places to do their transactions.

The Asia's version of Silicon Valley is known as the Multimedia Super Corridor (MSC). This is one of the most ambitious state-run projects ever conceived in Asia. The Prime Minister of Malaysia, Datuk Seri Dr. Mahathir Mohamad, had initiated this project from scratch for several reasons. First, Malaysia would provide the best incubator on the planet for high-tech industry could take root , and to boost the country into the ranks of developed nations by the year 2020.

Mahathir wants to propel the nation into the Internet Age within the span of 20 years or less. This project would signify as the nation's next step to move into the more innovative realm of creating software, multimedia products, and big-think ideas.

The MSC costs $20 billion and needs the duration of 20 years for total completion . Upon completion, facilities to be offered are fiber-optic networks, research facilities, tax breaks, and new 'cyberlaws' to any multimedia setting up a shop.

Cyberjaya is a new city that the nation's leader had envisioned as an IT nirvana . Here, Malaysians and foreigners would work side on the 'intelligent buildings' wired with the latest technology.

The MSC will be the first place in the world to bring together all the elements needed to create an environment that engenders truly mutual enrichment for IT/multimedia companies.

MSC brings together four key elements:

1) Leading-edge soft infrastructure, including:
(1.1) highly attractive incentives
(1.2) unrestricted import of foreign knowledge workers,
(1.3) the world's first comprehensive framework of 'cyber-laws',
(1.4) world's first MUltimedia Convergence Act, and
(1.5) a sharper focus on multimedia education.

2) World-class IT network consisting of a high-speed backbone, and the most cost-compet telecommunication tariffs offered to MSC companies.

3) MDC as a high-powered, one-stop shop that is empowered to ensure that companies into the MSC get what they need to succeed by providing information and advice on the MSC assisting in expediting permit and license approvals.

4) Top-quality urban development in Cyberjaya, Malaysia's first major MSC- designated cyber-designed from ground up.

MSC status companies that operate in the MSC cybercities will enjoy the full incentive for MSC companies. Currently there are:

1) Cyberjaya
2) Putrajaya
3) Kuala Lumpur City Centre
4) Kuala Lumour International Airport (KLIA)
5) MSC Status Companies

Cyberjaya

Cyberjaya was Malaysia's first multimedia city. It was created in a strategic and privileged area that enable the locals to enjoy advanced infrasructure within an eco-friendly environment.

Landmark attrative are:

1) A world class urban development integrating advanced infrastructure and facilities within environment of parks, reserves and axes.
2) A balanced environment of enterprise, commercial and residential zones with recreational including facilities for disabled and vulnerable groups.
3) An eco friendly environment with existing topography and ecology strongly encourages solar and waste power generation and rain water utilisation. With this, Cyberjaya become a near zero-emission city.

As a new model infrastructure cybercity, cyberjaya is supported by an advanced telecommunication. World class facilities that are in the making include a Multimedia University telemedicine hospital, International School, public parks, nature santuaries and greens.

Cyberjaya is one of the five 'cybercities' where MSC designated companies can be located. However, cyberjaya is the only actual 'city' out of the five 'cybercities'.

As such, with Cyberjaya at the heart of the MSC, locating to this intelligent city makes for a logical move.

Advantages include:

1) 5 years tax exemption from Malaysian income tax, renewable to 10 years or a 100% Investment Tax Allowance on investment made in MSC cybercities.
2) Duty Free imports of multimedia equipment
3) R&D grants for local small and medium sized enterprises( SMEs)
4) Unrestricted employment of foreign knowledge workers
5) Freedom of Ownership
6) Freedom to source for funds globally
7) World's first comprehensive cyber-laws and intellectual property protection
8) Advanced physical and IT infrastructure
9) Globally competitive telecommunication tariffs and service guarantees
10) Eco friendly, high quality planned urban development
11) Excellent educational facilities including the region's first Multimedia University
12) Green Environment protected by strict zoning

Cyberjaya will have an advanced City Command Centre(CCC) to manage its infrastructure, services and environment.

The CCC becomes the focal point and one-stop centre for standard and quality services. In other words, the CCC becomes a conduit between the utility and providers and the domestic, commercial or government customers. (The Star, 28th march)

An advantage for businesses that are placed under Cyberjaya is that the companies do not have to pay any taxes. The companies also uses computers to link up the transactions and businesses to make things faster and much more systematic. On the other hand, companies that are outside of the Cyberjaya do not enjoy such benefits.

Putrajaya

The new city will provide 52,000 units housing for about 330,000 people. It is equipped with modern amenities. It will function as the principle seat of government where 76,000 staff will occupy 16mn sq of floor space and ultimately 135,000 people will be working in Putrajaya's sleek new office. Stylishly designed buildings where government offices will be housed now sit along the fringers of the partly completed Dataran Putra( Putra Grounds), surrounded by a massive man-made lake. It was envisioned that Putrajaya, where nearly every major federal agency will have its headquaters.It can also attract banks, securities houses and media organizations to Malaysia. 85 embassies will be moved to Putrajaya.
It will be served by advanced communications and transportation infrastructure . There will also be a golf course, sports stadium, cultural center and shopping malls, as well as a giant man-made lake surrounding the city center, complete with a floating mosque. The pink-domed Putra mosque - boasting one of the world's tallest minarets at 380 feet(116m). It can house 15,000 worshippers and a museum for rare copies of the Koran, Islam's holy book.
Eventually, Putrajaya expects high-tech schools, fishing grounds, jogging paths and artificial lakes. Some of the finer details are already there: futuristic street lamps, irrigation ditches dug into grassy knolls to prevent erosion, and viewing platforms built on hills. The government has allotted more than $526 million to build schools, health care facilities and public amenities in Putrajaya over the next decade. Fiber-optic cable is being laid beneath the streets, and residents will be able to have Internet access and other electronic-superhighway conveniences
Proponents of Putajaya that argue a new city is essential to ease the urban sprawl of Kuala Lumpur, where roads are dug up daily to upgrade sewage, drainage and water supply systems for a growing population. They say the high-tech metropolis which boasts a dozen parks and jogging paths, will boost the morale of civil servants. (taken from web page of Putrajaya page@kiat.net)

Kuala Lumpur City Centre (KLCC)

The Tower's entrance design was inspired by the country's cultural heritage, incorporating Malaysian motifs adapted from traditional handicrafts such as "songket" and timber carvings. The overall character of the building is high-tech and international but distinctively Malaysian.

At the podium level, the PETRONAS Twin Towers feature the following:

The 864-seat Dewan Filharmonik PETRONAS, a venue of architectural and acoustic distinction. It is also home to the Malaysian Philharmonic Orchestra A reference library on energy, petroleum, petrochemical and related industries

The Towers were topped-out in March 1996 and occupation began in early 1997. Tower One is currently being occupied by PETRONAS, the state-owned petoleum corporation. Tower Two is being occupied by PETRONAS' associate companies while the remaining space is being leased out to multinatinals.

The PETRONAS Twin Towers are located on the northern boundry of the Multimedia Super Corridor(MSC) and ha state-of-the-art communication facilities. MSC is the launching pad to propel Malaysia into the frontline of the information age.

Kuala Lumpur International Airport (KLIA)

K.L International Airport (KLIA) at Sepang is designed and built to be an efficient, competitive and world-class hub airport for the Asia-Pacific Region. It will replace Sultan Abdul Aziz Shah International Airport as the main gateway into the nation. The new mega airport, complete with the latest technology and state- of-the-art facilities, will aim to provide maximum passenger safety, comfort and convenience. It was fully operational on January 1 1998. In 1998 when the first passenger arrived at the new KLIA, they experienced glimpses of a green Malaysia through the unique architecture, enjoy the worldwide recognized Malaysian hospitality and feel the ease of modern hi-tech conveniences that reduced waiting time.

KLIA Sepang will have the setting of "airport in the forest". There would be no boundaries between the physical structure of the airport and its green ambience.
The airport has a high-tech computer network, which costs RM500 million. It is called the Total Airport Management System(Tams). It was installed in the new Kuala Lumpur International Airport (KLIA), making it one of the most sophisticated systems in the region.
Billed as the first of its kind in the world, the system integrates all 27 systems in the airport's management, from passenger seating to air traffic control.
Located within a forested area of 10,000 hectares in Sepang, at the edge of the Multimedia Super Corridor, the new airport was built by 25,000 workers at a cost of RM9 billion. When completed, it will be the largest in the world in area terms.
It is aiming to be a "total airport", serving as an aircraft, cargo and passenger terminal.
As for passengers, its initial capacity of 25 million will be increased to 60 million by the year 2020.

MSC Status Companies

Malaysia is pleased to offer MSC status to Malaysian and international companies prepared to set-up operations within the MSC or otherwise contribute significantly and strategically to the MSC's development.MSC status will enhance the companies' operations. Companies' with the MSC status will be able to expand their business nationwide as well as globally with the emergence of e-commerce through the development of MSC. Companies seeking MSC status and eligibility for incentives will need to fulfill three criteria: firstly, they must be a provider or a heavy user of multimedia products and services; secondly , they must employ a substantial number of knowledge workers; and, thirdly, they should be able to outline how they will transfer technology and/or knowledge to Malaysia, or otherwise contribute to the development of the MSC and the Malaysian economy.

Examples:

1)ASTRO Productions Sdn Bhd ( Content Development)
2)Smart Global Sdn Bhd ( Content Development)
3)Worldstocks Sdn Bhd ( Software Development)
4)Siemens Multimedia (Software Development)
5)Hitechniaga Sdn Bhd ( Virtual Community)
6)BRG Interactive Digital Media Sdn Bhd ( Virtual Community)
7)Stockwatch Sdn Bhd ( Financial Service Providers)
8)Highest Summit Technologies Sdn Bhd ( Financial Service Providers)
9)Motorola Multimedia ( Network & Distribution)
10)TehnoChannel Sdn Bhd ( Network & Distribution)
11)Iris Technologies ( Smart card)
12)Sapura Card Technologies Sdn Bhd ( Smart card)
13) HELP Institute (Smart Card)
(derived from NEW STRAITS TIMES, 2 May 1998)

Summary

HELP Institute is actively get into research and development(R&D) of smartcard technology soon as part of its proposed involvement in the Multimedia Super Corridor(MSC) initiative. Its dean of faculty of information technology(IT) said, HELP is establishing a smartcard competency centre at its Kuala Lumpur under a joint-venture with Micromodule Technologies Sdn Bhd.

HELP students are involved in developing applications such as prepaid computer usage system, prepaid point-of-sales system, attendance control system and library system.

An advantage of using the new smart card is that everything and all informations can be included in the card. For example, the new Identity Card for Malaysians includes personal particulars, passport, Driving License, health data, etc.

In the context of HELP Institute, the smart card includes students' information, such as personal data, awards received, library records, attendance, access to photostating facilities internet access. It can also be used as a student discount card for various places, such as the cinema and book store. The bursary will also had a record to monitor students' fees and other payments via the smart card.

According to Dean of Faculty, the partnership with Micromodule is aimed for developing expertise in the smartcard technology and generating the relevant skilled manpower, and making available locally developed applications. Under the tie-up , Micromodule is providing the necessary hardware, software and programming tools as well as training for HELP's lecturers to conduct teaching and projects in smartcard technology. Dean of faculty said, the company would also help provide real-life case studies in smartcard applications, and at the same time provide industry knowledge to help with the development of new smartcard applications. MICROMODULE Technologies Sdn Bhd, a subsidiary of Insas Bhd, has teamed up with Help Institute to help set up a smart card competence centre.

Vision 2020

The Seventh Malaysia Plan ends in the year 2000. It is therefore psychologiccaly crucial we bid farewell the 20th century with a strong national balance sheet providing the springboard to the next phase of vivion 2020.

The Seventh Plan also addresses the need to balance growth with protection of the environment and Malaysia's natural resources. It acknowledges the emergence of various social problems in Malaysia in the wake of the rapid growth of the economy.

A new industry tergeted by the Seventh Malaysia Plan is Information Technology(IT), which will play a significant role in national development, particularly in improving efficiency, productivity and competitiveness.

The Government has initiated the construction of the Multimedia Super Corridor spanning Kuala Lumpur to the new KL International Airport at Sepang.

This corridor will be supported by the provision of world-class physical and information infrastructure.

World-class multimedia companies will be encourage to locate in the corridor to undertake IT services, thereby enhancing Malaysia as a regional IT hub.

The Seventh Plan document acknowledges that sustained high growth has caused some damage to our quality of life and the plan promises to rectify the excesses of over-development.

(Taken from http://thestar.com.my/archives/7mplan/gthll.html)

3. Related Cases

COMPUTER Case
TELEDIS Case
KLIA Case
Formula1 Case
MALACCA Case
MALAYOIL Case

4. Draft Author:

Sonny Wong Soon Loi, July 9, 1999
MY EMAIL

II. Legal Clusters

Mahathir established a set of 'cyberlaws' for the protection of the intellectual property and the prevention of computer crimes. The Prime Minister had promised to refrain from censoring the Internet. This promise was reversed when a political scandal went out of proportion several months ago regarding the Deputy Prime Minister.

With the implementation of MSC, there will be lots of use of computers and the internet. However, some may use the internet for illegal businesses and viewing, such as having pornographic sites. Although the cyberlaw does not have the right to arrest those who are involved, other laws that are under the constitution will. Hence, it will provide a safe place for youngsters to visit.

The government now requires all cybercafes to register users and provide such information to the police. This is done settle the ethic unrest the people and Mahathir had police track down the sources.

Nearly all the nations in Asia are affected by the MSC. This project's purpose was to expose the people of Asia to the internet and the links throughout the world. (The SUN, 6 August,1998)

The MSC will definitely bring cursings and blessings. Its blessings are that Malaysia will become more advance and have more power because of the use of information technology. This makes Malaysia to be modernized and competitive with the rest of the world. Furthermore, news can reach the world very fast, enabling people to have access to it. However, some people may use the internet to spread rumors about certain things that could threaten the country's stability. There will be more freedom to express feelings and views via the internet. Therefore, the political life will go through a change and this influences our ability to change as well. For example, the way we communicate much faster compared to previous time. Too much freedom then again, will cause social chaos within the society.

Another benefit that we could obtain through the internet is that we can learn things more quickly. There are also lots of information in the net. Hence, the society will have easy access to useful information to enable it to grow faster. Networking will also be much easier with the MSC. It can be used to manage and control things more effectively. For example, a good lecturer in a university can be used to teach more students, especially in many other universities, without the students or the lecturer him/herself attending the lecture. This is done via the tele-conferencing facility.

With the implementation of the MSC, the way of learning also improved. We no longer have to depend on books for study materials. All data and information can be obtained in the net. In other words, the quality of education will improve with the use of information system and computers.

5. Discourse and Status:

Agree and allegation

6. Forum and Scope:

Malaysia and unilateral

7. Decision Breadth:

Malaysia only

8. Legal Standing:

Malaysian Law

III. Geographic Clusters

The geographic domain of this project is Asia, and the geographic site is East Asia. Obviously the biggest impact of the MSC could be detected in Malaysia, for this is where the project is located . There are no sub-national factors because the MSC is located in the new city called Cyberjaya, which is situated about an hour away from the nation, Kuala Lumpur. The targeted people involved in this domain are mostly Asian and the type of habitat is tropical.

As stated earlier in this paper, Cyberjaya is Mahathir's vision of Information Technology(IT) nirvana. Mahathir had also pledged a new capital city, Putrajaya, the place where the federal government- including the Prime Minister himself- would work electronically.

9. Geographic Locations

a. Geographic Domain: Asia

b. Geographic Site: East Asia

c. Geographic Impact: None

10. Sub-National Factors:

11. Type of Habitat:

Tropical

IV. Trade Clusters

Before the launch of the MSC, Mahathir had successfully promoted Malaysia, especially Penang, as a site for high-tech hardware manufacturers such as Intel Corp. and Seagate Technology Inc. The promotion of had helped the government in attracting investors for the MSC. Mahathir had hoped to attract $4 billion from giant corporations such as Microsoft Corp. and Oracle Corp.

The government had invested $4.7 billion in this project. Due to the high cost of the MSC, the government needs as much investers as possible. Subsidies are granted to some companies that are investing in the MSC. With foreign firms investing, an increase in import/export is desirable, for the nation's increased income.

So far, there are 29 world class companies with MSC status. Some of them are Nokia(M), Oracle MSC, Fujitsu(Malaysia), Bloomberg and Microsoft Knowledge center . With these well-known companies investing in the MSC, it is good indication to the rest of the world that this project is reliable.

Transportation will become the trade product identification, and the economic data would involve with the labour force and production, such as the nation's employment rate and industry's output. The impact on trade restriction will be low because Malaysia needs movement into and out of the country to increase income. The industry sector involved would be on transportation and servicing.

Experts speculated that the imports and exports involved with this project would be good for the nation. In exporting, people all over the world will be aware of a small nation such as Malaysia, and there would be information posted in the internet regarding the nation's wealth and structure, so an understanding would emerge.

12. Type of Measure:

Regulatory standard

13. Direct v. Indirect Impacts:

Indirect

14. Relation of Trade Measure to Environmental Impact

Does not affect the environment much

a. Directly Related to Product: Yes

b. Indirectly Related to Product: Yes

c. Not Related to Product: No

d. Related to Process: Yes

15. Trade Product Identification:

Information services

16. Economic Data

Employment

17. Impact of Trade Restriction:

Low

18. Industry Sector:

Government administration centre

19. Exporters and Importers:

Malaysia and many

V. Environment Clusters

Pollution is a worldwide issue. To build this MSC, acres of trees were cleared to accommodate this project. The loss of these trees would increase the air pollution that is already bad in Malaysia. There is also habitat damage towards the wildlife and Malaysian's, due to the lack of land elsewhere.

One of Malaysia's main products import in timber. The resource impact and its effects are regulatory in this case for it's hardly affected. The urgency and lifetime is low for the resources due to the lack of land for other purposes. To sustain the scarce resources, such as timber, the government could either replant all the fallen trees or introduce and encourage the usage biodegradable products.

To build the MSC, we used up to 15 km by 50 km of land. This shows that there are actually lots of trees being cut down. However, these trees are replanted again once the project is completed.