The Multimedia Super Corridor (MSC) has contributed to the country's economy and is not doing as poorly as claimed by certain quarters, said the head of a government-backed corporation that has been handed the responsibility of establishing an Asian Silicon Valley in Malaysia.

Multimedia Development Corporation (MDC) executive chairperson Dr Othman Yeop Abdullah today said the MSC project has led to a spur of 12,000 knowledge-incentive jobs this year and has generated some RM2 billion sales for the companies involved.

"They are looking at a glass half empty, but we are looking at a glass half full of water," Othman said at a media briefing in Cyberjaya, on the fifth MSC international advisory panel (IAP) meeting next month.

He was responding to claims that MSC has not taken off nor contributed significantly to Malaysia's economy.

In February, international consulting firm McKinsey & Co had prepared a report, said to be the first external review of its kind, on the MSC's progress since the project's inception in 1996.

The report read that the MSC has not attracted substantial interest from global technology companies, nor has it had contributed significantly to the country's economy. The level of employment of "knowledge workers" was said to be insignificant.

In 1996, McKinsey helped draft the MSC's blueprint and identified several subsections of the project which later became flagship applications such as electronic government and 'smart-schools'.

In relation to the McKinsey report, Prime Minister Dr Mahathir Mohamad reportedly admitted that the impact of the MSC on Malaysia's economy was not as successful as the government had expected though he stressed that there were some other progressive indicators.

Investor confidence

The five-year-old MSC is a 15-by-50 km strip south of Kuala Lumpur, which has currently swallowed more than RM10 billion in state funds. It includes the new administrative capital Putrajaya, software development city Cyberjaya, and the Multimedia University (MMU).

Othman said the research and development expenditure of the MSC-status companies have made up to about one percent of the country's gross domestic product (GDP) last year.

"Of all the employees of these companies, 21.7 percent of them are hired for R&D purposes," he said.

He added that renowned computer company Intel's recent proposal to hire several locals to design its microprocessor, indicated the foreigners' confidence in the level of information technology (IT) knowledge of Malaysians.

"All these could not have happened if it was not for the MSC," said Othman.

He added that Malaysia has granted 541 companies MSC status to date. This, he said, had exceeded the government's target of having at least 500 MSC-status companies by 2003.

However, according to Othman, only 474 of them are operating, 10 are yet to be incorporated, 28 had their MSC status revoked, 12 are being reviewed and the rest will come into operation soon.

He also said the up and coming IAP meeting will discuss on how to position the MSC as a "positive contributing factor" in Malaysia's economy as well as spearheading the development of the national information technology agenda.

The IAP, responsible for advising the government on MSC's development, is chaired by Mahathir and comprises some 40 prominent foreign members from the industry such as Acer Group chairperson Dr Stan Shih and Infosys Technologies chairperson NR Narayana Murthy.

Procedure simplified

Meanwhile, Othman said the state-owned MDC had simplified the procedures in applying for MSC status following feedback from their customers and recommendations by the McKinsey report.

The report said the MDC has become rife with bureaucracy and ridden with red tape. Technology companies were said to have complained that the process to apply for MSC status was too complex and MDC staff lacked the specific criteria and expertise to evaluate applications.

"We have examined our procedures and tried to make them customer-friendly and we are now approaching our potential customers to tell them what we have achieved in the MSC," he said.

Among the changes made was that a company only has to produce a three-year projection of its financial status instead of the conventional five-year projection.

The fifth IAP meeting will be held from Sept 6 to 8 in Kuala Lumpur.