Special Economic Zones in the OIC Region:
Learning from Experience
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guarantees and certainty to investors that land was available for development and the ease of
agreeing leases or purchase of land differentiated Penang from competitor locations.80
5.2.6.3 The PDC established a process of ‘post-investment’ care to ensure that business needs,
demands and concerns are continually met
The PDC has established institutional mechanisms to maintain close links with MNCs within the
Penang FIZ and Industrial Estates and thus allows the PDC to maintain a clear understanding of
investor requirements. This allows the corporation to be flexible to changing investment
climates and to address investor needs and requirements on a continual basis.
5.2.6.4 Establishment of a separate investment promotion agency
In 2005 a restructuring exercise was undertaken in order to streamline the PDC. This resulted
in the Industrial Division of the PDC being taken over by InvestPenang whose responsibilities
were specified as industrial and service sector promotion.
The creation of InvestPenang allowed the PDC to focus primarily on the provision and setting
up of industrial estates, infrastructure, township development and sale of industrial land.
Financial and Economic Climate
5.2.6.5 Strong anchor tenants – the ‘Eight Samurai’
From the outset, the PDC identified that attracting strong MNC anchor tenants would be crucial
to the success of the zone. Focusing on the electronics sector the PDC managed to attract
National Semiconductor (US), Advanced Micro Devices and Intel in 1971. In the following years
between 1972 and 1975 a further five MNCs established themselves in Penang; Osrum
(German), Hewlett Packard (US), Bosch (German), Hitatchi (Japanese) and Clarion (Japanese).
Once the ‘Eight Samurai’ were established in Penang, a network of ancillary industries began to
emerge to meet their input requirements resulting in the rapid growth of local tooling and
equipment manufacturing firms.
5.2.6.6 Ability to upgrade value added manufacturing activities and retain anchor tenants
A key success factor in Penang’s growth has been the ability to retain key anchor tenants (of the
eight samurai, seven still remain) and to facilitate structural transportation of the export
activities. Driven by domestic cost pressures (such as increasing wages and rents) there was a
shift away from simple assembly processes towards component design and testing as well as
regional and global headquarter functions. Activities also include corporate and financial
80 Interview with Mr Dato Cheri Singh and BuroHappold 2017