The Multimedia Super Corridor A Model for Fostering Economic Growth and Development using IT World Trade Organization Information Technology Symposium Geneva, July 16, 1999 Presentation by Mohd. Salleh Masduki Multimedia Development Corporation Malaysia

TOPICS 1. NEW FORCES IN PLAY 2. CREATING THE IDEAL MULTIMEDIA ENVIRONMENT 3. RESPONSE FROM WORLD CLASS COMPANIES 4. CATALYZING LOCAL COMPANIES

Globalization and the Information Age Driven by Technology Change Economic Liberalization Digitalization + Convergence + Microprocessor technology + Interactive broadband + Internet = Continuously declining costs and increasing speed of communication and computing Economic liberalization, deregulation = freer global capital and trade flows The natural barriers of time, space and form have disappeared In a knowledge economy and borderless world both opportunities and challenges abound

New Forces for Gaining Competitive Edge Moore’s Law Metcalfe’s Law Transistor Density in a Chip Doubles Every 18 months ~~ Computer Power Doubles Every 18 months The Utility Value of a Network is the Square of the Number of Users in the Network Coase’s Theory of Transaction Cost Creation of the Digital/Knowledge Economy

Coase’s Theory of Transaction Cost A company will grow to the point where the cost of performing a task in-house is equal to the cost of doing the job in the open market. Transaction cost is dramatically reduced with the use of Information and Communications Technologies.

Coase’s Theory of Transaction Cost Banking Transaction Cost US$ $1.07 $0.68 $0.27 $0.10

Results from the 3 Key Forces Moore’s Law Metcalfe’s Law Coase’s Theory of Transaction Cost Breakdown of the Natural Barriers of Time, Space and Form Disrupts Customer relationships Distribution networks Competitor behaviour Economies of size and scale Killer Applications

THE MSC SOUGHT TO ANSWER A NUMBER OF CRITICAL QUESTIONS FACING THE NATION 1. THE ECONOMIC FACTOR - HOW DO WE SUSTAIN OUR GROWTH TOWARDS 2020? 2. THE SOCIAL FACTOR - HOW DO WE ENSURE EQUITABLE AND EFFICIENT ACCESS TO PUBLIC GOODS, SERVICES AND INFORMATION? 3. THE GLOBAL FACTOR - HOW DO WE DEAL EFFECTIVELY WITH THE FORCES OF GLOBALIZATION AND BECOME A SIGNIFICANT CONTRIBUTOR TO THE INFORMATION AGE?

LEAPFROGGING MALAYSIA’S DEVELOPMENT Go Global Create the ideal multimedia environment to attract world-class companies to use as a hub Enhance domestic productivity Leapfrog into success in the Information Age Create value from Information Age businesses Catalyze a highly competitive cluster of Malaysian multimedia/IT companies that become world-class over time Lead Regional

MALAYSIA’S RESPONSE - THE MSC - NOT JUST ANOTHER TECHNOLOGY PARK “Multimedia Utopia” 15x50 km garden corridor south of downtown Kuala Lumpur Special cyberlaws, policies and practices tailored to enable residents to achieve the full promise of multimedia World-class physical infra-structure and next-generation 2.5-10 Gb multimedia network A one-stop shop to facilitate investment - the MDC MSC boundary KLCC PETALING JAYA KL Tower Technology Park CYBERJAYA PUTRAJAYA AIRPORT CITY KLIA

THE MSC VISION: FROM HERE TO 2020 Leapfrog into leadership in the Information Age Transform Malaysia into a knowledge society Phase 3 Phase 2 Link the MSC to other cybercities in Malaysia and worldwide Phase 1 Successfully create the Multimedia Super Corridor 1996 2020 1 Corridor 50 world-class companies Launch 7 flagship applications World-leading framework of cyberlaws Cyberjaya as world-leading intelligent city Milestones Web of corridors 250 world-class companies Set global standards in flagship applications Harmonized global framework of cyberlaws 4-5 intelligent cities linked to other global cybercities All of Malaysia 500 world-class companies Global test-bed for new multimedia applications International CyberCourt of Justice in MSC 12 intelligent cities linked to global information highway

THE MSC BILL OF GUARANTEES The Government of Malaysia commits the following to MSC Status Companies 1. Provide a world-class physical and information infrastructure 2. Allow unrestricted employment of knowledge workers 3. Ensure freedom of ownership 4. Allow freedom of sourcing capital globally for MSC infrastructure and freedom of borrowing funds 5. Provide competitive financial incentives including no income tax or an investment tax allowance for up to ten years and no duties on the import of multimedia equipment 6. Become a regional leader in intellectual property protection and cyberlaws 7. Ensure no censorship of Internet 8. Provide globally competitive telecoms tariffs 9. Tender key MSC infrastructure contracts to leading companies willing to use MSC as their regional hub 10. Provide a high powered implementation agency to act as an effective one-stop super-shop

Soft Infrastructure Cyberlaws - Current Status Enforced 1st Oct.1998. Controller of Certification Authority appointed Digital Signature Act Amendments to the Copyright Act 1987 Enforced 1st April1999 Computer Crimes Act All passed by Parliament - 1997. Yet to be enforced Telemedicine Act Enforced 1st April 1999. Commission - appointed 1st Nov. 1998 Communications & Multimedia Act Data Protection Law In the process of being drafted Electronic Government Law

THE FLAGSHIP APPLICATIONS WILL PROVIDE OPPORTUNITIES FOR WEB-BASED COLLABORATION MSC R&D cluster Borderless marketing center Chinese Bahasa English Japanese Telemedicine Worldwide manufacturing web World-first multipurpose card Connection Optical Magnetic Contact Contactless 2 Electronic government Smart schools

DESIGNATED CYBERCITIES – JULY 1999 UPM Incubation Center KUALA LUMPUR CITY CENTRE TECHNOLOGY PARK MALAYSIA Cyberjaya Putrajaya KLIA KUALA LUMPUR TOWER CYBERJAYA (MSC HQ)

Attractive Living Environment in Cyberjaya: Completed and Planned Projects – July 1999 Cyberpark Amenities City Command Centre e E V e-VILLAGE Housing 60 apartment units available 818 residential units ready by 2000 Entertainment Village

Creating Ideal Multimedia Environment in Cyberjaya: Completed Projects – July 1999 Multimedia University 3,000 students admitted NTT MSC Center 2nd largest NTT R&D facility outside Japan TM Cyberjaya Central State-of the-art exchange enabling quality broad band services Central Incubator Capacity: 45,000 sf Taken: 36,000 sf

MSC Status Companies - Participating Countries (as at July 1 ,1999) Total Approved Applications: 228 Total Number of Applications: 288

MSC Status Companies By Activity (as at July I,1999)

$ Critical ingredients for creating Malaysian Technoprenuers Incubation Centres Venture Capital/ Financing Market Access Critical ingredients for creating Malaysian Technoprenuers R&D Grant HRD/Training Incentives

TECHNOLOGY FOCUS OF 122 MALAYSIAN MSC-STATUS SMES Software Development 33 E-Commerce 17 Telecommunications 10 Content Creation & 14 Training Production/Post Production 12 Animation/Broadcasting Internet Publishing 9 Systems Integration 7 Smart Card Solutions 5 Virtual Reality 3 Telemedicine 2 Chip Design 2 Authentication/ 2 Encryption Technologies Remote Storage & Retrieval 2 Remote Energy 1 Management Systems GIS 1 Borderless Marketing 1 DVD 1

.…Thank you…. http://www.mdc.com.my