Press Release on Penang downsizes investment for 2012, emphasising higher paying jobs

November 10, 2011

November 10  - Penang Chief Minister, Lim Guan Eng at investPenang’s Board of Directors Meeting agreed to go for lower investments next year but asserted that the investments must be complemented by more higher paying jobs.

Lim explained that the Penang economy which is presently 50% dominated by the manufacturing sector should have a shift towards greater contribution from the services sector, driven by contributions from the shared services and outsourcing (SSO) as well as tourism, particularly health and education tourism sectors.

Emphasis will be focussed on the promotion of higher value added manufacturing and related services as well as knowledge-based services to reduce dependency on manufacturing. These include encouraging existing MNCs as well as new investors to set up Shared Services and Outsourcing (SSO) Centre, Regional Headquarter (RHQ), Regional Distribution Centre (RDC) and International Procurement Centre (IPC) in Penang.

Diversifying from the existing manufacturing base will also be given importance to lessen the State’s reliance on any one sector. Companies in Penang, especially the SMEs are encouraged to leverage on their existing capabilities and skill sets to explore and to break into other targeted sectors like medical devices, aerospace / avionics and photovoltaics industries.

Knowledge intensive activities will be high on the priority list for promotion.  These include the promotion of the establishment of knowledge process outsourcing (KPO) companies in Penang that could take advantage of the existing capabilities and skills that have been spawned and inculcated throughout the 4 decades of export-oriented industrialisation in Penang.

Lim clarified that knowledge intensive activities will generate higher paying jobs for knowledge workers.  Knowledge workers are defined as individuals who are valued for their ability to act and communicate with knowledge within a specific subject area. These individuals normally have profound education background, backed with experience and overall understanding of the specific subject. These are people who “think for a living”, utilising their ability and skills in defining problems and identifying solutions and alternatives.  Lim added that by having a pool of knowledge workers to support the knowledge intensive activities, the overall economy and well being of Penang will be further enhanced, thus making in the State an Intelligent City. Emphasising knowledge intensive activities means that priorities will be placed on per capita income, R&D expenditure to total revenue as well as payroll as a percentage of revenue.  Nevertheless, for the first 8 months of this year, Penang succeeded in attaining a total of RM4.8 billion investments, putting Penang at 4^th ranking.  Of this total, RM3.7 billion is FDIs and Penang still leads in terms of FDIs. (please see table below). Penang targets RM6.1 billion for 2011.