High Tech, Capital-Intensive, Economic Powerhouse

For the past many many many years, before Iskandar attracted so much attention, Johor already have industrial zones. However, these are mostly labour intensive taking advantage of the lower cost of production versus many other countries. Today, for Iskandar to continue its climb, the types of supporting industries may need a huge transformation. In fact, much of it rests on the new high-tech, capital intensive new investments. Without these, the income for its residents may continue to be lower than Klang Valley and if that is continuous, it meant that the supply and the prices of the new upcoming properties are not sustainable in the long run.

Mentri Besar Datuk Mohamed Khaled Nordin said that the state wanted to become an economic powerhouse in the country and this meant shedding the image that only labour-intensive manufacturing activities can happen in Johor. In fact, he gave a few reasons why. Its strategic location at the crossroad of international trading route, the electronics and electrical manufacturing hub in the southern region and it is now time to move forward. Besides that, Johor is also right next to Singapore which was an advantage in attracting investors. Johor also have good road network system, two seaports and an international airport. This meant that exports can be sent out fast from the manufacturing plants.

Personally, I think Johor has much room for continuous growth if it manages to get some catalytic huge technological company to be based there just like how Port Tanjung Pelepas grew after the investment by Maersk. Many years ago, Sony started their manufacturing plant in Penang and it brought with them the whole eco-system to support them. The current focus should however be to attract as many as possible of all the Singaporean companies which are looking to expand, be they MNCs or SMEs. These ready companies which is just an house away meant that the scale can be built up very fast. Once there are more activities, more jobs would be created and this meant that when new companies are set up, they would have more to choose from. Today, majority of companies based in JB said they find it tough to compete with Singapore. As for Singapore, they face cost pressure as they are competing with the world and yet their costs are based in the world’s most expensive city! Both nations would gain, not just Johor, Malaysia.

written on 21 July 2014

Next suggested article:   Buying Iskandar? Points to note about Chinese (China) developers thus far

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