MSC Malaysia
Driving Creativity, Innovation and Knowledge

The Petronas Towers, Kuala Lumpur

Malaysia’s New Economic Model will see the country continue its climb up the technological value chain, creating unique opportunities for international investors.

Multiple Academy Award-winning production company Rhythm & Hues thrives on creativity. With an eye on global entertainment markets, last year the California-based firm opened its second office outside the United States in Malaysia’s Multimedia Super Corridor (MSC Malaysia). It is no ordinary office. The 60-person-strong artistic staff it employs works in huts designed to reflect a traditional Malay village. Though open just one year, the office has already contributed animation to several high-profile films such as Marmaduke, Alvin and the Chipmunks: The Squeakquel, and Knight and Day.

“We looked at lots of criteria before we chose Malaysia,” says Rhythm & Hues Global Head of Operations Prashant Buyyala. “It has great infrastructure, Kuala Lumpur is a great city to visit, and the bill of guarantees Malaysia provided gave us the confidence that we could do a good job.”

Rhythm & Hues intends to boost its Malaysia staff to 200 in the coming years, and has ambitions for its own building in Cyberjaya, Malaysia’s technology capital and home of MSC Malaysia. The company is but one example of the high-value knowledge work for which Malaysia is increasingly known. “We are in the creative industry, so we need different ways of thinking and different ways of telling stories,” says Buyyala.

MSC Malaysia itself has a great story to tell, and has boomed in a number of technological areas. From 2003 to 2009, the number of companies with MSC Malaysia status grew 15% annually, bringing the total to 2,520 companies. In 2009, MSC Malaysia-status companies posted total revenues of US$7.7 billion. Out of this figure, total exports amounted to US$2.2 billion.

SSO: A Global Leader
Malaysia continues to perform well in shared services outsourcing (SSO). According to A.T. Kearney’s Global Service Location Competitiveness Index, Malaysia is in the top three global SSO destinations. It scores very well in criteria such as financial attractiveness, people skills and availability, and the overall business environment.

The government continues to enjoy great success attracting and supporting international outsourcing giants, and has turned its attention to local outsourcing firms, which excel at serving the Asian market. Several Malaysia-based firms have appeared in the International Association of Outsourcing Professionals’ list of the top 100 global outsourcing firms since 2006. Two examples are Symphony, a leader in Asia’s human resources BPO market; and SnT Global, a supply chain outsourcing company that serves multinationals in Asia.

Creativity and Innovation
Under the auspices of Malaysia’s New Economic Model, MSC Malaysia will have a significant role in building the country as a center of creativity and innovation. Development programs and incentives will be tailored to spur private sector innovation and productivity.

Aside from a business-friendly government and MSC Malaysia’s service orientation, Malaysia has several key advantages that will foster future growth. For example, Malaysia is blessed in terms of both geography and demographics. Located in the heart of Southeast Asia between India and China, the country has a unique strategic location and superb infrastructure. Kuala Lumpur International Airport, a short drive from MSC Malaysia, regularly scores high in international airport awards.

Malaysia is also one of Asia’s great melting pots, serving as home to large Malay, Chinese and Indian communities. English and a range of Asian dialects are widely spoken. Best of all, companies can find the right talent in Malaysia and hire people for the long term.

Founded in 2005, Malaysia-based Arahe is a Web acceleration systems and rich Java technology company that helps its clients maximize their technology investments. It has grown rapidly, and now has offices in the U.S. and China, as well as distributors in other key markets such as India and the Middle East. Though young, Arahe has built a superb client list with customers such as DHL, AirAsia, Maybank, Shanghai Education Board and China Mobile.

“Malaysia, with its safe and harmonious multicultural living, has enabled us to recruit and retain talents from a range of nationalities,” says Eric See-To Choong, CEO and Founder of Arahe. “This has provided the language and cultural fit necessary to expand to emerging regional markets. The government support and service delivery infrastructure has also improved dramatically over the past few years, contributing to a very efficient and conducive business environment. Owing to multiple government online initiatives, most government services are available at the click of a button.”

When asked how MSC Malaysia status has helped Arahe, See-To cites a number of ways: First, Arahe has employees from a range of countries, and thus appreciates the one-stop work-visa processing service, which provides for hassle-free movement of talent. A five-year tax-free incentive granted as part of MSC Malaysia status helped the company reinvest early profits, thus boosting growth.

“Having MSC Malaysia status is also a seal of approval that provides recognition and trust when we meet with potential clients, reseller partners and investors,” says See-To.

Though Malaysia is Southeast Asia’s leading center for industries based on knowledge, creativity and innovation, the road ahead is challenging. A new plan, MSC Malaysia 2.0, sees information and communications technology (ICT) playing an increasingly important role in Malaysia’s development under the New Economic Model. Under the plan, MSC Malaysia will continue to tailor incentives to attract foreign direct investment, while also building Malaysia’s homegrown ICT sector, helping the country become a net exporter of IT solutions.

Perhaps the greatest benefit Malaysia offers investors is a rock-solid intellectual property framework. The government is committed to a comprehensive regulatory system for intellectual property protection and cyberlaws to help foster the nation’s ICT and multimedia environment. The Intellectual Property Corporation of Malaysia, MyIPO, expedites IP registrations, while the new IP Court in Malaysia will ensure the speedy resolution of IP disputes.

Building Toward a Knowledge Economy
Malaysia is committed to building a sustainable knowledge economy—an economy where innovation and creativity thrive, creating significant value for foreign investors who need a dynamic yet stable base to take advantage of Asia’s vast opportunities in the new century. Malaysia’s diverse, well-educated workforce is ready for the challenges of today—and tomorrow.