HIGH TECHNOLOGY INDUSTRIAL PARK AND IMPACT ON REGIONAL DEVELOPMENT IN MALAYSIA

By

Nurwati Badarulzaman

School of Housing, Building and Planning, USM

Study funded under IRPA Research (1998) co-authors Ghani Salleh & Kausar Ali. Acknowledgements are also due to Puan Zainab Puteh of USM.

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A B S T R A C T

In recent years, high technology industry has been linked to regional development. High technology-based industrial activities are often located in specific areas commonly known as industrial zones, 'brain' parks, technology parks, science parks, business centres, technology districts or industrial districts. Such designated areas are often closely associated with the concepts of growh pole and multiplier effects. In this study, the impacts of high technology industry on regional development were examined in terms of the local economic linkages, which refers to the direct economic relationships between two or more firms in the industry.

It has been established that high technology industry has no specific definition or any generally accepted criteria. Nonetheless, most research has highlighted the two important criteria in defining this industry. These criteria are (1) the proportion of professional workers to the total workers working in the firm, and (2) the percentage of expenditures on Research and Development (R&D) activities to the total expenditures of the firm. This study used the definition of high technology industry adopted by the Malaysian Industrial Development Authority (1996) which states that high technology industry employs at least 7% professional workers in its workforce and that it spends at least 1% of  the total gross sales on research and development (R&D).

The impacts of high technology industry on regional development in Malaysia were studied in terms of the local economic linkages in local development, human resources requirements and the locational factors for high technology industries. A survey of 32 high technology firms was conducted throughout Peninsular Malaysia to determine the profile of high technology industry and their potential impacts on regional development.

The results of this study showed some interesting findings. It was found that high technology industry had a relatively higher proportion of professionals in their workforce at 14.5%. However, R&D was not considered as a major activity in the firms, accounting for only 0.7% of the firm expenditures. Most R&D activities were found to be undertaken by foreign-owned companies in locations abroad. It is noteworthy that most high technology industry had subcontracting activities in the local states. This finding indicates a positive impact of high technology industry on the local economy. Furthermore, high technology industry also contributed in terms of technology transfer, skills development, job opportunities and linkages with educational institutions. The study also identified several locational factors pertinent to high technology industry. These factors are good transportation system, good telecommunication systems, availability of skilled labour and good political climate.

T H E   S U R V E Y

The case study areas were located in the various industrial parks in the states of Penang, Kedah, Perak, Selangor, Melaka, Negeri Sembilan, Pahang and Johor in Peninsular Malaysia. The 32 firms in the survey were selected based on the types of industries in each industrial location.

States

Name of Industrial Parks

Number of Firms Sampled for the Survey

1. Penang

Bayan Lepas

Bayan Lepas FIZ

Penang Technoplex

Prai

Seberang Jaya

Bukit Tengah

Bukit Minyak

10

2. Selangor

Shah Alam

Selangor Science Park

7

3. Johor

Larkin

Pasir Gudang

Senai

7

4. Pahang

Gebeng

Peramu

3

5. Melaka

Batu Berendam Free Zone

Melaka Technology Park

Composite Technology City

2

6. Perak

Ipoh

1

7. Negeri Sembilan

Nilai

Senawang

1

8. Kedah

Kulim High Tech Park

Sungai Petani

1

   

Total =32

 

The questionnaire used in the survey consisted of 7 major sections:
  1. Background of the firms
  2. Input and output of the firms
  3. Firm expenditure schedules
  4. Types of local linkages
  5. Workforce profile
  6. R&D activities
  7. Factors influencing locations of high technology industry