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Learning from Experience
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planning, R&D, product design and tooling, sales and marketing. Penang is also used for global
training and skill enhancement programmes.
5.2.6.7 Diversification of manufacturing activities and industries
In addition to the electronics industry, Penang has managed to diversify its production base into
complementary electronic product lines such as medical services and equipment, light emitting
diodes (LEDs) and photovoltaic design and development. This has been enabled through the
strong cluster of electronic manufacturing firms and a global reputation for a skilled workforce
adept within these industries.
5.2.6.8 Establishing backward linkages between MNCs and domestic economy
The PDC has been successful at fostering local sub-contracting capacity and in establishing
relationships between MNCs and domestic companies. The PDC maintains a database of local
suppliers which it uses to provide matchmaking services with MNCs. Knowledge of local supply
chain capabilities has been a crucial element in fostering backward linkages and encouraging
technology transfer.
Skills and Training
5.2.6.9 Establishment of the PSDC
Prior to the PSDC, the PDC were engaged in conducting vocational training programmes to meet
demand for skilled labour from MNCs. The PSDC was then formed in the late 1980s in close
collaboration with MNCs to meet targeted skills and training requirements. The centre has also
received strong support from the federal government which offer tax deductions for MNC
contributions to PSDC training schemes and their own skills and training development
programmes.
5.2.6.10 Development of strong backward skills linkages with the domestic economy
The presence of foreign MNCs within Penang have had a significant impact on human capital
development within the economy. This is evident through the decision of MNCs within Penang
to locate high value activities and headquarter functions within global production networks to
the FIZs and Industrial Estates. It is estimated that only 8% of CEOS in foreign companies in
Penang are foreigners and many MNCs utilitse the managerial and technological expertise of
their Penang operations when expanding to other countries. 81
8181 Athukorala, P (2012) Growing with Global Production Sharing: The Tale of Penang Export Hub, Malaysia.