Many of the challenges that Penang is facing stem from the difficult transformation from industrial society to a knowledge-based economy. What needs doing is a more conscious development of its “epistemic landscape”.
STUDIES HAVE SHOWN THAT industrial clusters enhance the competitive advantage of states or regions. Clustering of related industries reduces transaction costs, stimulates innovations and drives development. Silicon Valley in California, US and the automotive cluster of Stuttgart, Germany are examples of successful clusters. The Japanese Government as well as European Commission facilitate the growth of industrial clusters and research on their development.
Malaysian development strategies since Independence, and again in the 10th Malaysia Plan (2010), have emphasised the development of industrial clusters, like the Penang Free Trade Zone and the Multimedia Super Corridor (MSC). In recent years the following problems have surfaced:
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