“A combination of low cost and high technology” is the in-a-nutshell reason The Economist gives for the beginnings of Penang’s success in the healthcare and electronics industries. Penang state and its neighboring region on the mainland now account for 21% of Malaysia’s GDP as a result of its technology focus, as well as a strong rule of law, intellectual property protection and ease of doing business.

The road to technology riches was paved in the 1970s when Penang became Malaysia’s first free-trade zone, but the article also credits Penang’s current government for freeing up the local economy further by removing economic privileges and combating corruption and waste.¬†For its part, the federal government has also invested heavily in Penang with massive infrastructure upgrades such as a duplication of the bridge to the mainland and extensions to the main seaport and international airport.

Penang has historically enjoyed a strategic trading position thanks both to its physical location between China, India and Southeast Asia, and the well-connected multi-ethnic mix that reflects this. High-tech industries have created a skilled local workforce of technicians and engineers, the capital Georgetown is enjoying a revival, and foreign companies are moving in once again.

source & article: The Economist