The Multimedia Super Corridor A Model for Fostering

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 - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT -

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

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 - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - 3

New Forces for Gaining Competitive Edge New Forces 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 - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - 4

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. - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - 5

Coase’s Theory of Transaction Cost Banking Transaction Cost US$ $1. 07 $0. 68 $0. 27 $0. 10 - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - 6

Results from the 3 Key Forces Moore’s Law Metcalfe’s Law Coase’s Theory of Transaction Cost Breakdown of the Disrupts Natural Barriers of Time, Space and Form • Customer relationships • Distribution networks • Competitor behaviour • Economies of size and scale - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - Killer Applications 7

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? - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - 8

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 Create value from Information Age businesses Catalyze a highly competitive cluster of Malaysian multimedia/IT companies that become world-class over time - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - Lead Regional 9

MALAYSIA’S RESPONSE - THE MSC - NOT JUST ANOTHER TECHNOLOGY PARK “Multimedia Utopia” PETALING JAYA MSC boundary KLCC KL Tower Technology Park CYBERJAYA PUTRAJAYA AIRPORT CITY KLIA • 15 x 50 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 infrastructure and nextgeneration 2. 5 -10 Gb multimedia network • A one-stop shop to facilitate investment - the MDC - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - 10

THE MSC VISION: FROM HERE TO 2020 Phase 1 Successfully create the Multimedia Super Corridor 1996 Milestones • 1 Corridor Phase 2 Phase 3 Link the MSC to other cybercities in Malaysia and worldwide Transform Malaysia into a knowledge society Leapfrog into leadership in the Information Age 2020 • Web of corridors • All of Malaysia • 50 world-class companies • 250 world-class companies • 500 world-class companies • Launch 7 flagship applications • Set global standards in flagship applications • Global test-bed for new multimedia applications • World-leading framework of cyberlaws • Harmonized global framework of cyberlaws • International Cyber. Court of Justice in MSC • 4 -5 intelligent cities linked to other global cybercities • 12 intelligent cities linked to global information highway • Cyberjaya as worldleading intelligent city - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - 11

THE MSC BILL OF GUARANTEES The Government of Malaysia commits the following to MSC Status Companies 1. Provide a world-class physical and 6. Become a regional leader in information infrastructure intellectual property protection and cyberlaws 2. Allow unrestricted employment of knowledge workers 7. Ensure no censorship of Internet 3. Ensure freedom of ownership 8. Provide globally competitive telecoms tariffs 4. Allow freedom of sourcing capital globally for MSC infrastructure and 9. Tender key MSC infrastructure freedom of borrowing funds contracts to leading companies willing to use MSC as their regional 5. Provide competitive financial hub incentives including no income tax or an investment tax allowance for 10. Provide a high powered up to ten years and no duties on implementation agency to act as an the import of multimedia effective one-stop super-shop equipment - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - 12

Soft Infrastructure Cyberlaws - Current Status CYBERLAWS Digital Signature Act Amendments to the Copyright Act 1987 Computer Crimes Act Telemedicine Act Communications & Multimedia Act Data Protection Law Electronic Government Law - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - STATUS Enforced 1 st Oct. 1998. Controller of Certification Authority appointed Enforced 1 st April 1999 All passed by Parliament - 1997. Yet to be enforced Enforced 1 st April 1999. Commission - appointed 1 st Nov. 1998 In the process of being drafted 13

THE FLAGSHIP APPLICATIONS WILL PROVIDE OPPORTUNITIES FOR WEB-BASED COLLABORATION Magnetic World-first multipurpose card Contact Connection Contactless R&D cluster Optical 2 0 Smart schools M S C Worldwide manufacturing web Chinese Telemedicine Japanese Bahasa English - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - Electronic government Borderless marketing center 14

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

Attractive Living Environment in Cyberjaya: Completed and Planned Projects – July 1999 Cyberpark Housing 60 apartment units available 818 residential units ready by 2000 - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - Amenities City Command Centre e E e-VILLAGE V Entertainment Village 16

Creating Ideal Multimedia Environment in Cyberjaya: Completed Projects – July 1999 Multimedia University 3, 000 students admitted Central Incubator Capacity: Taken: 45, 000 sf 36, 000 sf - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - NTT MSC Center 2 nd largest NTT R&D facility outside Japan TM Cyberjaya Central State-of the-art exchange enabling quality broad band services 17

MSC Status Companies - Participating Countries (as at July 1 , 1999) Total Approved Applications: 228 Total Number of Applications: 288 - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - 18

MSC Status Companies By Activity (as at July I, 1999) - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - 19

Incubation Centres Market Access HRD/Training - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - Critical ingredients for creating Malaysian Technoprenuers Venture Capital/ Financing R&D Grant Incentives

TECHNOLOGY FOCUS OF 122 MALAYSIAN MSC-STATUS SMES Ø Software Development 33 Ø Telemedicine Ø E-Commerce 17 Ø Telecommunications Ø Chip Design 10 Ø Ø Content Creation & 14 Training Ø Ø Production/Post Production 12 Ø Animation/Broadcasting Ø Internet Publishing 9 Ø Systems Integration 7 Ø Smart Card Solutions Ø Virtual Reality - MULTIMEDIA DEVELOPMENT CORPORATION COPYRIGHT - 5 2 2 Authentication/ 2 Encryption Technologies Remote Storage & Retrieval 2 Remote Energy 1 Management Systems Ø GIS Ø Borderless Marketing Ø DVD 1 1 1 3 21

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