Twists and turns in Penang’s tech ambitions

Mention Penang, and many will tell you that the island is a smorgasbord of the finest Malaysian cuisine. It’s also home to a vibrant heritage tourism scene and is touted as the Silicon Valley of the East.

Amid the hype back in 2015, Tech in Asia visited the Malaysian state, located on the northwest coast of the peninsula.

We found out that the audacious claim checked out: It’s home to 10 industrial parks, with a robust manufacturing sector that specializes mainly in semiconductors.

We also stumbled upon Khoo Kah Lee, a tech evangelist, who’s also known as Curry. Curry was buoyant about Penang’s chances of being the next best thing in the tech scene.

Fast forward to 2022, and we caught up with Curry again. This time, however, he sang a slightly different tune.

Of burnouts and conflict

He tells us that between 2012 and 2016, he tried his best to put Penang’s tech startup ecosystem on the map, but the efforts took a toll on his personal life. Further, Penang’s state agencies became more involved in the picture, which led to conflict as their agendas “were not aligned” with what he had envisioned, Curry says.

The self-styled tech community builder argues that, as Penang is a small state with a population of only 1.8 million people, “it made no sense to have two groups, i.e., state vs non-state [actors] working on the same thing.”

So Curry took a break. Now he’s back and is eyeing Malaysia’s capital, Kuala Lumpur, as the site of his next venture, which he says is in Web3.

A few Malaysia-based investors we spoke to also tell us that despite Penang’s strong electrical and electronics sector and large multinational companies, the state has been struggling to replicate that success downstream, that is, on the digital and software side of things.

The burden of getting those segments up and running right now is on the shoulders of Tony Yeoh, CEO of Penang Digital, which is one of two state agencies working on luring talent and money back to the state. The other entity is InvestPenang.

Yeoh tells Tech in Asia that the three agencies go about their job quite differently. While Digital Penang has been tasked with bringing in more software-related investments, InvestPenang is focused on attracting manufacturing investments.

Digital Penang and InvestPenang also work together with separate counterparts at the federal level. In Malaysia, there are two tiers of government: federal and state. Typically, federal agencies, with headquarters in Putrajaya or Cyberjaya, liaise with their state counterparts to drive investors to regions outside Kuala Lumpur.

In this case, Digital Penang works with the Malaysia Digital Economy Corporation (MDEC) while InvestPenang collaborates with the Malaysian Investment Development Authority.

Born privileged

Demographic shifts and other challenges

Plugging into a wider ecosystem

Systemic advantages and risks