Kuala Lumpur, 13 July 2018 – IDEAS has published a report, titled “Create or Nurture? Lessons from Cyberjaya: Malaysia’s Promised Silicon Valley”, which evaluates the success of Cyberjaya. The paper considers the evidence on what makes hubs like Silicon Valley successful and applies those lessons to Cyberjaya. The report notes that Cyberjaya has had some success in creating jobs and attracting investment, but has ultimately failed in its objective of creating a world-leading IT entrepreneurial hub. The report argues that this is because in creating Cyberjaya the government tried to create a flourishing hub from scratch, when the evidence suggests the most successful hubs emerge naturally with the government stepping in later to support development, including by providing demand for new technology, as was the case with the US Defense Department’s early investments in Silicon Valley.

The report also draws attention to several examples of successful industrial clusters launched within Malaysia, in which the government has played a supportive role, but not necessarily created them from scratch, thus further confirming its broader policy message. The report notes that Malaysia has enjoyed steady and impressive rise in ICT exports, however most of this rise may not be attributed to the Cyberjaya.

Commenting on the release of the paper Ali Salman, CEO of IDEAS and author of the report said: “Cyberjaya was an grand ambition that has ultimately fallen short. Whilst it has created jobs and investment it has not become the world leading innovation hub that was envisioned. The key reason is that the government cannot create hubs from scratch, it needs to support what emerges naturally. The new government should learn lessons from this experience and pursue policies that allow the enormous potential of Malaysia’s private sector to flourish, rather than trying to manage it directly.”

Policy Paper No.50 : Create or Nurture? Lessons from Cyberjaya: Malaysia’s Promised Silicon Valley can be downloaded here.