5. CASE STUDY ONE: LES’COPAQUE PRODUCTION SDN. BHD.

We have something the West doesn’t. We have a range of cultures, of religions, the
way we see art is totally different. We can adapt to any kind of design.
(AunHoe 2010, 82)

5.1 Introduction

This chapter presents extensive data gathered in the case study on Les’copaque Production
Sdn. Bhd. The chapter begins with a comparison of the MSC capital city, Malaysia Cyberjaya,
and Cyberport, Hong Kong. The aim is to give a better understanding of the development of
ICT sectors in the region, along with differences and similarities. Then, data will be presented
according to the four research questions of this thesis. The first research question will address
the seven themes identified in the answers obtained from the respondents during the
interviews. Responses to RQ2, 3 and 4 follow, based on the findings of the interviews and
desk research. Whenever required, this study will use subtitles in order ensure the key
findings are more easily identified.
5.2 Comparison of Cyberjaya, Malaysia and Cyberport, Hong Kong
This section compares Cyberjaya, Malaysia and Cyberport, Hong Kong. The history of both
Cyberjaya and Cyberport will be examined as the main national vehicle to move from the
industrial to post-industrial era amplified by Malaysia (Tyndall 2002, 178) and Hong Kong
(Jessop & Sum 2000). Cyberjaya is the capital city for Malaysia MSC project, while Cyberport
fulfils a similar function in Hong Kong. Spurred by the hi-tech boom in developed countries
such as Australia, Germany, the US, and UK, other major cities in East Asia have joined the
technology race. Despite strong government support on both projects, Cyberjaya and
Cyberport have encountered resistance. This section presents the issues and strength of both
projects, based on data gathered from interviews and secondary data.
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5.2.1 The development of Cyberjaya, Malaysia
The idea of Cyberjaya originated in 1999, at almost the same time as the Malaysian
government decided to create a new administrative and smart city (Putrajaya) for the country.
The city was planned with an emphasis on enterprise and office development that would act
as the catalyst for the growth of ICT enterprises and the multimedia industry in Malaysia.
Under the MSC plan, the 7,000 acres of freehold land that makes up Putrajaya is divided into
four clusters: a housing area; a retail district; universities (with a focus on creative industries,
multimedia and technology programs); and the business park. The establishment of the
Multimedia Development Corporation (MDeC) in Putrajaya administrates the billion-dollar
MSC project, adhering to an annual budget of 30 million ringgit (Vicziany & Puteh 2004).
MDeC is incorporated under the Companies Act of Malaysia, and owned and funded by the
Malaysian government. This combines entrepreneurial efficiency and the effectiveness of a
private company, and the authority of a high-powered government agency, and fosters an
environment highly conducive to the creation of a successful MSC Malaysia. MDeC’s primary
role is to advise the Malaysian government on legislation and policies, develop MSC Malaysiaspecific
practises, and set breakthrough standards for multimedia operations.
Many incentives and benefits have been offered by the government to draw high-tech
transnational investors, including unrestricted employment of local and foreign “knowledge
workers”, exemption from local ownership requirements, and the freedom to source capital
globally (MDeC 1996). The private developer, Setia Haruman Sdn Bhd, has been appointed
by the Malaysian government to design and prepare the primary infrastructure for the
Cyberjaya Flagship Zone (CFZ) (Setia Haruman 2010). Each zone is fully equipped with a
host of intelligent network services and interactive broadband services. Setia Haruman Sdn
Bhd is involved with the whole development of the city, from planning and designing to the
provision of basic infrastructure, and the marketing and selling of land parcels and other real
estate developments to investors. They also offer assistance to MSC-status companies in
obtaining the right land and approvals for sub-division and building plans. Setia Haruman are
developing a residential area to cater to their target population of 210,000 in the next ten to
fifteen years, as well as business developments providing for up to 120,000 employees and
institutional establishments for 30,000 students (Sarif 2010, Setia Haruman 2010).
Unfortunately, the development of Cyberjaya has been slow when compared with other similar
ICT cities in countries such as China and Singapore. In addition, the city failed to attract long
term residents, in particular local people. Housing prices are generally too expensive for
Malaysian locals to afford, and public transportation is limited. Many of the houses around
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Cyberjaya were purchased as investment properties by foreigners. These factors keep the
active population of Cyberjaya relatively small and not capable of supporting a growing
business sector. Those who open businesses in Cyberjaya are either foreign or already
established local companies. The development of Cyberjaya has taken place for more than
ten years, but no significant changes to the city can be seen. There is little improvement on
the facilities and basic infrastructure of the city, although the Internet speed is reported as the
fastest in Malaysia. Overall the internet speed in Malaysia is ranked internationally at 32ndplace,
although it is one of the fastest in South East Asia. The image of the city is still largely
unfavourable among the ICT key players in Malaysia, including the LCP staff.
Over past five years however, the image of the city is slowly improving. The active role played
by MDeC in developing ICT-related sectors, locally and globally, has contributed indirectly to a
positive image of Cyberjaya. Also, with the latest technology facilities—including the
Multimedia Content Initiative Centre [MAC 3]) and the incentives provided by the Malaysian
government and employers (Ramasamy et al. 2004)—more Malaysian creative talents who
reside abroad have chosen to work with the Malaysian government and various market
players to assist in the development of creative sectors in Malaysia (3D World Magazine;
MDeC 2010). Some expressed interest in opening branches of their company in Cyberjaya,
for example, Rhythm and Hues Studio. Their presence in Cyberjaya helps to promote the city
to non-locals, and gives incentive to local companies to open businesses there. Further, many
of the successful Malaysian creatives abroad have been appointed by the Malaysian
government to sit on the advisory board (similar to MDeC) (MDeC 2010). The presence of
MDeC in Cyberjaya brings a positive image to the city on account of the substantial
improvements in the progress of Malaysia’s ICT and animation sector over the last decade.
The market players in animation and other content sectors in Malaysia agree that MDeC has
contributing hugely to a positive image of cartooning and animation in the country and region
(3D World Magazine 2009). Their multipurpose role and collaboration with high profile
international companies like Al-Jazeera, will help to boost the perception of the city as a hub
for creative sectors companies.
Cyberjaya is located near major transportation systems, including the highway express from
the city of Kuala Lumpur (26 kilometres) and Kuala Lumpur International Airport (15
kilometres), and commuter and fast trains (Refer Appendix 7). Cyberjaya was built to function
as the regional and glocal ICT hub to rival the best in the world. The developer of the city,
Setia Harum, claimed the city’s competitiveness as a global ICT hub has marked Cyberjaya as
one of the top three global destinations for business support services and outsourcing.
Cyberjaya is a self-contained intelligent city with world-class IT infrastructure, and low density
urban enterprise, as well as state of the art commercial, residential, enterprise and institutional
developments. This city is designed to be an ideal place to live, work and play, with
convenient amenities and facilities. Importantly, Cyberjaya is the MSC capital city for the
country, and home to knowledge workers, enterprising businesses, students and families. To
date, Cyberjaya is home to many multinational companies such as Shell, EDS, Ericsson,
BMW, HSBC, Motorola and DHL. There are several higher institutions and smart schools
operating in Cyberjaya, from the Limkokwing University College of Creative Technology
(LUCCT) and the Multimedia University (MMU), to the Cyberjaya University College of Medical
Sciences (CUCMS). The major programs of these institutions centre on ICT sectors. These
private institutions are among the leaders in providing higher education in creative industries
and ICT in Malaysia and the Asian region. Cyberjaya’s residential areas offer a wide array of
homes, catering the middle to high income bracket. The township also provides other
convenient amenities such as a hotel, boutique malls, recreation centres, a community
clubhouse and schools. To make the city a world intelligent city, broadband services using
fibre optic network enabling high speed Internet access and network solutions are provided.
Cyberjaya was designed to be an ideal city for creative companies and workers to work and
stay. Despite this, the city needs more improvement particularly to strengthen their basic
infrastructure and facilities in order to attract more people especially local residents to stay in
the city permanently. At present, those who work and study in Cyberjaya prefer to stay
elsewhere and commute to the city. In addition, the former Malaysian PM, Mahathir, says he
was not happy with the development of Cyberjaya due to its slow growth (Setia Haruman
2010). The slow progress of the city is partly due to the recession in Malaysia in 2008. With
the year 2020 approaching, the Malaysian government is speeding up the development of the
city by pumping in more funding with the help from private companies to achieve the desired
status of “world intelligent city”.
5.2.2 The development of Cyberport, Hong Kong
The idea for the Hong Kong Cyberport was conceived by “Hong Kong’s Bill Gates”, Richard Li.
The area is being developed by both Li and a Singapore-based corporation, Pacific Century
CyberWorks (PCCW) to foster the development of Hong Kong’s information services sector,
and to enhance Hong Kong’s position as Asia’s premier information and telecommunications
hub. The government will provide support to this development by investing US$2 billion
(HK$15.8 billion) to promote the Cyberport as a place to commercialise creative ideas and
incubate start-ups. The joint partnership between Hong Kong SAR Government and private
corporations in Hong Kong is part of the state’s attempt to increase its capacity in economic
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development and now is commonly adopted (Lee & Haque 2006). As well as the Hong Kong
creative digital community, Cyberport has an energetic cluster of creative ICT and digital
content tenants, and comprises a mixture of four intelligent office buildings, a five-star hotel, a
retail entertainment complex, and about 2,800 deluxe residences. The Cyberport was
established with the aim of being the leading information technology hub and digital city for the
Asia-Pacific region (Refer Appendix 8). Cyberport has won numerous awards locally and
internationally (Hong Kong, Cyberport 2010).
Since its launch, Hong Kong Cyberport has encountered political problems, particularly a
public discontent over their lack of accountability. Some claims allege the Cyberport project
was assigned to PCCW (chaired by Richard Li) without a competitive tender, due to Richard
Li’s close friendship to Hong Kong’s Chief Executive Tung Chee-Hwa (Grammaticus 2000;
Lee & Haque 2006). The government has been heavily criticised and accused of practising
cronyism (Lombardo 1999). To date, Cyberport has failed to create a significant impact upon
the sectors it was designed to support. The number of larger companies is not as high as
expected by the Hong Kong government. In 2008, less than one hundred IT companies and
two university programs in four office buildings, one five-star hotel, a retail arcade, and a
deluxe residential development were operating at Cyberport (Fong 2008).
Nicholas Yang, CEO of Cyberport in 2003, claimed that the slow progress Cyberport was due
to the SARS epidemic that hit Hong Kong in the middle of 2003, and that Cyberport
subsequently has refocused on digital community and commercialisation (Fong 2008). Before
that only one third of Cyberport was allocated as residential, since the main focus of the
project was information infrastructure for Hong Kong (Lombardo 1999). With the refocussing
of Cyberport, there are hopes to sustain the project, which has had financial losses.
Unfortunately, because of the limited facilities, the tenants at Cyberport have claimed it is not
a good place to live (Fong 2008). Further, the constant changing of top management at
Cyberport has distorted the original plan. The present CEO, Herman Lam, stated that the only
focus of Cyberport today is on ICT development (Hammond 2010). With this narrowed focus,
and the establishment of a competitor, Hong Kong’s Science Park, the attractiveness of
Cyberport has lessened. With the rapid development of other competitors in Hong Kong and
China, the future of Cyberport is uncertain. At present, Richard Li is far less involved in the
project, a factor contributing to investors diverting their attention from Cyberport to other
similar projects close by. The next section will discuss the similarities in development issues
faced by Cyberjaya and Cyberport.
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5.2.3 The similarities between Cyberjaya and Cyberport
The similarities between Cyberjaya and Cyberport lay in their development at the end of the
1990s after a significant growth of globalisation and the revolution in ICT. A mixed model was
used in both projects, adopting earlier successful ICT-related projects such as Silicon Valley
and Taiwan’s Hsinchu Science Park, with the incorporation of some additional local culture to
suit the local environment. Both places announced their intention to become Asia’s world city
(MSC 2010, Jessop & Sum 2000). Both projects received considerable support from their
governments, and promoted close cooperation between the government and private agencies.
Their major focus was to be the primary city for the development of ICT growth for their
country and in the region.
However, both cities have had difficulties attracting businesses. Infrastructure is still
insufficient, and particularly fails to attract more local companies. For example, as a new and
small company, LCP prefer to have their operation in a more established city like Shah Alam
rather than Cyberjaya. Cyberjaya is struggling to attract ICT companies to operate there
despite offering many incentives. Similarly, in 2008 Cyberport had less than one hundred
companies establish branches of their business there (Fong 2008). To make things worse the
first ten years of the twenty-first century saw Asia and other parts of the world hit by economic
recession, epidemics (bird and swine flu), and natural disasters. These factors saw the
development of both projects affected by a lack of foreign investment. Nonetheless, these two
cities are not isolated in facing this scenario (Fong 2008). This issue is common among the
new development areas globally. Ordinarily, new areas like Cyberjaya and Cyberport take
time to be developed, and for people to move in permanently and feel comfortable to live and
work there.
5.2.4 The differences between Cyberjaya and Cyberport
While Cyberjaya was created to move Malaysia forward as a developing nation, the Hong
Kong (HK) Cyberport idea was initiated by Richard Li. While the main force behind the
Cyberport project is an individual, Cyberjaya is a government initiative that develops
Malaysia’s ICT sector. The development of Cyberjaya is based on three phases. The third
phase will span from 2011 to 2020, the date the Malaysian government has set as a target for
Malaysia to reach developed country status. To make it more appealing, Cyberjaya is
developed close to Putrajaya and Kuala Lumpur International Airport, which is located more
than thirty kilometres from Kuala Lumpur. Meanwhile, Cyberport is located near other
government and private ICT projects, such as the HK Science Park, the HK Industrial
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Technology Centre Corporation, and the HK Industrial Estates Corporation. Further, a CEO is
appointed by the government to run the Cyberport project (Ostrov 2002). As such, the role of
Cyberport keeps on changing according to the CEO’s vision. For example, Jessop and Sum
(2000) report that some market analysts such as Webb claimed that Cyberport “is no ‘Silicon
Valley”, and has been developed as a real estate project rather than a high-tech project.
However, Nicholas Yang, the former CEO of Cyberport, points out that their focus is not on
R&D, but rather on creating a space where technology people and businesses can connect
because it is a high-tech science park (Fong 2008). The newly appointed CEO as of 2010,
Herman Lam, has announced that Cyberport is now dedicated to helping local industries to
upgrade their skills and resources in order to prepare them or sharpen their competitiveness in
the digital era. The development of Cyberjaya is focussed on the federal government’s
mission for Malaysia to reach developed country status.
Another striking difference is that although Cyberport follows the Silicon Valley model, they
also looked to Singapore, Malaysia, the US, Australia and Europe for insight. Further, their
policies are strongly influenced by Israel’s high technology approach (Ostrov 2002). In
contrast, Cyberjaya’s primary model is based on Silicon Valley, with significant local culture
influence. According to Fong (2008), the focus of Cyberport has narrowed since the new
development of Science Park in Hong Kong. However, the growth of Cyberjaya is still
expected to contribute significantly to the goal of reaching developed nation status by 2020.
5.2.5 Conclusion on Cyberjaya and Cyberport
Both Cyberjaya and Cyberport are facing almost identical development issues. The
governments of Hong Kong and Malaysia are actively playing their role in the development of
the cities, and at the same time marketing their respective cities to global investors via various
incentives. As a result, both cities managed to attract major names in technology sectors such
as IBM, Microsoft and Apple to operate in the cities. However, with the fierce competition from
other countries in the region and the world, Cyberjaya and Cyberport are still not having great
success in becoming a world city, even in the Asian region. Their competitors in this sector—
including India, Japan, Singapore, South Korea and Taiwan—are more advanced, are at the
forefront of the creative economy sector in the region, and act as sources of professional
advice and human resources the global market seeks. China and Indonesia have been the
latest threat for both Cyberjaya and Cyberport; both are aggressively developing the creative
economy in their countries on a larger scale. Regardless, both Cyberjaya and Cyberport have
strengths that other places lack. They provide a fast speed Internet connection (faster than
Indonesia), and English is widely spoken in Malaysia (more widely than in Japan, South Korea
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and Taiwan). Also, both have a stable political environment (compared to India and
Indonesia). With these strengths, both Cyberjaya and Cyberport can become important cities
for the creative economy in their region. However, they have to speed up their development,
focus on their mission and objectives, and stay abreast of industry developments.
Beyond Cyberjaya and Cyberport, there are other similar mega projects around Asia being
developed to become world-class ICT places. For instance, the Singaporean government has
taken pro-active steps to make the island a global technopolis and biopolis (Khondker 2003,
151). According to Khondker (2003, 151-152), the objectives of the political, economic and
academic leaders are to transform Singapore from being disadvantaged because of their lack
of natural resources, to becoming more competitive with their human resources, R&D, and
technology. Singapore has limited resources compared to neighbouring countries such as
Malaysia and Indonesia, but due to its government’s creativity has become a developed
country. Thus, natural resources alone are not enough for a place to become successful with
their economy. Creative imagination is also needed to maximise or create the resources. This
is when creative economy activities play a major role for a place to sustain and become
competitive. Since the UNCTAD (2008) report on the potential of creative economies, the
Malaysian government has been actively promoting and supporting activities relating to
creative sectors. With this in mind the rest of this chapter report findings for LCP in relation to
each of the research questions.
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5.3 RQ1: What Are the Main Operational Issues for Malaysian
Creative Economy Enterprises?
Figure 5.3a: Les’Copaque Production 3D Animation Movie Poster
(Les’Copaque 2010)
In December 2009, interviews were conducted with LCP managerial staff, before resuming in
January 2010 with their other staff from all departments and rankings. All interviews were
undertaken in their meeting room at their office at No 1, Jalan Boling Padang G13/G, Seksyen
13, 40100 Shah Alam, Selangor. A total of nine interviews were conducted with LCP. A tape
recorder was used during the interviews with the staff. The names and positions of the
respondents are presented in Table 5.3.
Research Question One is answered in the form of seven themes arising from the interviews
with key informants in each case. Tables and exhibits are also used from this section onwards
whenever necessary.