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Friday September 5, 2003

MSC versus the giants


CYBERJAYA: The looming double-colossus of China in manufacturing and India in software development is the real threat to Malaysia’s continued economic growth. 

This was a key point brought up by members of the Multimedia Super Corridor’s International Advisory Panel (IAP) to be mindful of when formulating strategy for the second phase of the project. 

“You cannot compete with China in the long term. You can still have a good manufacturing industry here -- but China is so big. You won’t be able to compete with India in services either because India is so big," said panel member and Oracle Corp Asia Pacific executive vice-president Derek Williams. 

"You can do both -- but there will be limit to what you can do.” 

Williams has extensive knowledge of China and India as he oversees Oracle’s operations in 29 countries in Asia Pacific. He has raised the ante in both markets in recent months with expansion of staff and investments and has even received an honorary professorship from a Shanghai university for his contribution to the Chinese software industry. 

Williams, who has attended all seven of the IAP meetings, said Malaysia has proven all its sceptics wrong about the MSC. He said that what Malaysia needed to do now was to capitalise on the multinationals (MNCs) it has attracted to the MSC and get into “thought leadership.” 

“The MNCs themselves cannot make it happen in Malaysia. And Malaysians cannot make it happen alone. Bring the two together, and you have the magic recipe for phase two,” he said. 

The MSC has pulled in 59 world-class companies of the 757 that are operational in the corridor. Major brandnames such as Ericsson, NTT, Fujitsu, DHL, HSBC, Shell have built regional hubs in Cyberjaya while other global players such as Microsoft, Oracle, Motorola, Dell, Intel, Lucent and Siemens have set up smaller but significant operations. 

Williams continued that thought leadership doesn’t require a lot of people. “It requires energetic, enthusiastic, experienced and committed professionals. 

“Harness the power of the MNCs with their know-how and understanding and work with local professionals for that next level of creativity,” he said. 

Williams cited the example of Oracle’s partnership with XYBASE (M) Sdn Bhd which has developed locally an airport management system that is being used in 12 airports around the world. 

During the concluding press conference on the closed-door meeting, IAP chairman Prime Minister Dr Mahathir Mohamad reiterated the point brought up by Acer group chairman and CEO Stan Shih of “nanoprofits” in manufacturing. 

“Profits have become less and less until you have to use a microscope to look at it,” he said in jest. 

Shih elaborated later: “I continue to argue to focus on applications. You cannot compete with China in manufacturing. Even in software, don’t do coding and programming. Identify the need, then develop a system or an application, and outsource the coding to other countries like India.” 

Shih said with a limited market and human resources, Malaysia’s opportunity was to export such applications. 

A first-time panel member, B. Ramalinga Raju, the chairman of New York-listed Indian software heavyweight Satyam Computer Services Ltd, pointed out that the services industry comprised 65% of the global GDP. 

“The opportunities are in outsourcing, offshore development and virtual delivery of services,” he said. 

Satyam has invested in the MSC with the setup of a Global Solutions Centre in Cyberjaya in April; it has 40 staff so far. 

Another panel member N.R. Narayana Murthy, the chairman of Infosys Technologies Ltd, concurred with his Indian peer. Infosys had yet to commit to the MSC, but Narayana said the Indian outsourcing giant was “looking into the possibility.” 

He described the Prime Minister’s personal attention for the project as “extraordinary.” 

“I have never seen anything like it,” said Narayana, who made history when he listed Infosys as the first Indian company in a US stock exchange. 

On China, Narayana confirmed that Infosys’ plans to enter the market was already off the ground. Infosys had planned a 200-man development centre in the Shanghai-Pudong Software Park. 



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