Silicon Valley - Moving Up The Value Chain

Silicon Valley is the southern part of the San Francisco Bay Area in Northern California,United States. The term originally referred to the region's large number of silicon chipinnovators and manufacturers. Despite the development of other high-tech economic centers throughout the United States, Silicon Valley continues to be the leading high-tech hub because of its large number of cutting-edge entrepreneurs, engineers and venture capitalists.

Since the early twentieth century, Silicon Valley has been home to a vibrant, growing electronics industry. The industry began through experimentation and innovation in the fields of radio, television, and military electronics. Stanford University, its affiliates, and graduates have played a major role in the evolution of this area.

It was in Silicon Valley that the silicon-based integrated circuit, the microprocessor, the microcomputer, among other key technologies, were developed, and has been the site of electronic innovation for over four decades, sustained by about a quarter of a million information technologyworkers. Silicon Valley was formed as a milieu of innovations by the convergence on one site of new technological knowledge; a large pool of skilled engineers and scientists from major universities in the area; generous funding from an assured market with the Defense Department; the development of an efficient network of venture capital firms; and, in the very early stage, the institutional leadership of Stanford University.

Although semiconductors are still a major component of the area's economy, Silicon Valley has been most famous in recent years for innovations in software and Internet services. Silicon Valley has significantly influenced computer operating systems, software, and user interfaces.

Eventually, Silicon Valley is known all the high-tech businesses in the area; it is now generally used as a metonym for the high-tech sector. Software, Tools and other IT products are produce here replacing the traditional manufacturing facilities.

(from Wikipedia)

Malaysian Investment Development Authority

On 31 Mac 2010, Malaysian Prime Minister has announce that Malaysian first point of contact to investor, Malaysian Industrial Development Authority (MIDA), an agency operate under Ministry of International Trade nad Industry (MITI) is announced to be corporatised and will be given more 'authority' to run the investment promotions activities. New name also has been suggested, Malaysian Investment Development Authority to stay with MIDA acronym.

With this exercise, MIDA will have more power to do promotion without to deal with lengthy bureaucracy processes. As corporate body, MIDA will have the capability move together with EDB of Singapore, BOI Thailand and others. The structure will be determine later and will be completed by end of year. With this announcement, MIDA will be more leaner and can deliver better performance.

What Malaysia Need?

We have been focusing on new and emerging technology on electronics Industry, but we forgot to look back at why those 'giant' gain rank in this industry. As such:

1. No Anchor.

I would like to take 2 example, Japan and Korea. Japan has many electrical appliances companies that produce variety of products. As we all know, electrical products is combination of technology from electronics, chemical and mechanical. Sharp start their business producing mechanical pencil, then move to electronics calculator. Later they started to produce TV and other electrical products. Since they own the products, they have the knowledge and capability to go through the market.

In Korea, Samsung. Why they can design high tech products is the same reason as above. They own the technology and they can control the market. In Malaysia, we do have electrical appliances manufacturer as such Pansonic, ECE and Khind. In fact, Pansonic is one of the top brand in India. That means we have the capability. Most of Malaysian brand company, they intend to produce existing products by 'copying' other giant. Less R&D effort to be made. No investment in Pilot Plant. As such, to sustain in the market is quit competitive. Maybe we can compete in 2nd tier market, but don't we have dreams to be known and stand beside Sony, Sharp, Samsung and others. If we have the man power, where should they contribute?

2. Human Capital

We have thousands of high quality engineers. But why our technology is still behind. Nowadays, those engineers were attracted to MNCs which can pay higher, and left the last qualifier to operate in local companies. Some others move to Singapore due to currency exchange. Universities should go through their 'inputs' and focus how train they graduate to be high achiever. Take MIT for example. Giants around the world acknowledge them. What about UTM, UKM, UM, UiTM, MMU, UIA, UniSEL and others? Government should encourage Universities and Higher Education Institutions to work together with these companies. We don't want high result graduate but unable to apply it in the market.

3. Focusing on New Investment only

To develop more technology, investment in high tech is a much. As such, not only we can focus on New investors to knock our door, why don't we ask those existing companies to move up the value chain. New incentives and promotion should be put to those who want to develop and invest in Research and Development. MiGHT, an agency under MOSTI has take thoce lead by promoting the Innovation award. Let see where it will lead in 5 years time.