7. DISCUSSION OF CREATIVE ECONOMY
DEVELOPMENT IN MALAYSIA IN THE CONTEXT OF
TWO CASE STUDIES
Innovation creates jobs and boosts national competitiveness. This is why we, too, must
make a creative impact in a competitive global economy. We must not allow ourselves
to be left behind.
(Malaysia Prime Minister, New Strait Times, 2009)
7.1 Introduction
The intense development of technology in Malaysia started with the Vision 2020. The
Malaysian federal government plans to boost their communication, creativity, multimedia and
technology growth (Gray et al. 2002) and treats the creative economy as a top priority. An
example of this is the announcement of 2010 as the Year of Innovation and Technology (New
Straits Time 2009). However, the terms, creative economy and creative industries are only
popular among policymakers and key players involved directly in the development of these
sectors. Even then, there is much confusion amongst policymakers regarding these terms; in
fact, to some extent there is an overuse of terms like creativity and innovation in Malaysia. At
present, all ministries in Malaysia are stressing the importance of creativity and innovation,
although their definition of the terms remains unclear. New terms such as creative tourism and
creative government are being coined constantly to promote innovation and new ideas among
the public. Thus the assertion that a top-down policy approach is valid at least in both case
studies and for Malaysia in general. This same approach is used in other countries like China,
Hong Kong, Singapore and the UK.
Apart from addressing scientific creativity, the two case study organisations considered the
economy, and technological and cultural creativity in developing their products and services in
Malaysia. However, their experiences may not be creativity as defined by DCMS (1998), but
rather a second level of creativity as Keane (2009) has defined it. It is most likely that the two
case studies in Malaysia exemplify the fitting of new ideas and alternative visions to existing
norms, values and patterns as argued by Keane (ibid.). Rather than creating a totally a new
idea, the two case studies demonstrate the modification of other people’s ideas. This is
reduces the high risks often incurred in these competitive and unpredictable sectors.
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However, culture remains a significant element in all sectors in Malaysia, including in
animation, and obviously in cultural tourism. Likewise, innovation is needed in all sectors,
including culture and, particularly animation. Many authors identify the same close connection
between the cultural and creative sectors, as I have with this current study. Both case studies
here have significant cultural elements, and involve imagination, innovation and technology in
their products and services. Drawing on both cases, the chapter will discuss and analyse
critical issues for creative economy development in Malaysia. Each research question will be
discussed. The chapter extends and contextualizes the findings of the cases drawing on
secondary sources and literature where relevant.
7.1.1 RQ1: What are the main operational issues for Malaysian creative
economy enterprises? – Les’Copaque Production
Workforce Issues
LCP staff members have expertise in a range of fields, which may contribute to their
company’s positive impact on the market. Different disciplines allow the staff to produce new
ideas for their animation and merchandising products. However, the majority of the
respondents graduated from MMU, (as did three pioneers of the company also graduated).
This raises the issue of cronyism and favouritism in choosing LCP staff. More than three
higher-learning institutions in Shah Alam offer courses relating to animation sector, but the
majority of LCP staff employed are from MMU, which is located about thirty kilometres away
from Shah Alam. This environment is perhaps normal in any organisation, particularly in
Malaysia, where favouritism towards graduates is widespread. Hence, the presence of MMU
culture is strongly felt at LCP and in their products.
Respondents were all younger than thirty, and approximately ninety per cent of all LCP staff
fall into that age bracket. The argument that younger demographics are more attracted to ICT
than in previous generations is compelling in this case (Allenby 2006; Hoo 2006). All of LCP’s
animation and merchandising staff members are young and understand the desires of the
younger market. However, aspects that are lacking—such as finding financial support for their
products, and networking with established international companies—mean LCP has had to
depend heavily on Multimedia Development Corporation (MDeC).
While the CEO of the company is one few staff members aged more than fifty-years-old, he
comes from a different field and background. As a result, he may not have good contact with
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key people in the domestic and international animation sectors. At present, no LCP products
involve collaboration with Malaysia’s well-known senior cartoonists or animators such as Mohd
Nor Khalid or Lat (Kampung Boy cartoonist/animator) and Muliyadi Mahamood
(academician/cartoonist). A collaboration between LCP and these internationally renowned
creative might produce more interesting products and reach a wider market, particularly
among those over thirty. With LCP’s target market being the whole family, including parents
and grandparents, the company should consider having a good blend of staff from all ages.
This mixture would strengthen their animation and merchandise products.
Management Approach
LCP practices a non-traditional management style where all staff members have the right to
express their ideas. This creates a different working environment from more traditional
companies with a less bureaucratic management style. Commonly, most private companies
involved in Malaysian ICT products and services adopt (or try to) this style of management.
Florida (2002), Handy (1995), and Sabel (1982) argue that the characteristics of the post-
Fodist workplace (which include creative sectors) are inherently less hierarchical, more
“humane” in liberating the expertise of highly-skilled workers to allow productivity gains and
the development of a more contented workforce. However, the final decisions regarding LCP’s
products and services are still made by CEO. For example, the CEO recently cancelled the
production of LCP’s second 3D film, Geng: Angkasa (Gang: Outer space), arguing that it was
not what the primary non-Malaysian animation market of Indonesia wanted. Also, LCP’s sister
company, Bruang Film Production is going to refilm their first feature production, Zaitun
Ceritaku (Zaitun: My story) because the CEO was not happy with the overall direction and
acting in the film. This shows that the top-down approach is still the primary practice in this
company, although many of the decisions for LCP’s animation products are collectively made
by the staff.
Not only has LCP wasted money and time in those two projects, but the cancellation and
refilming exhibits a lack of good decision-making and confidence with the domestic and
international markets outside Indonesia. LCP products are also popular in Brunei and
Singapore. Gang: Outer Space 3D may not be what the Indonesian market wants, but other
markets might welcome the film. Unless there are other undisclosed reasons, LCP’s
justification for cancelling this project—originally slated for a 2011 release—is questionable.
The decision to make a biopic about popular 1980’s Malay singer, Zaiton Sameon involves a
number of risks, particularly given the unpredictable response to local feature films in Malaysia
in comparison with significant competition from Hollywood, Hong Kong and Bollywood. Also,
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Sameon—who is now in her fifties—was popular for less than five years in Malaysia, and
remains unknown in comparison to other Malaysian singing legends, particularly to audiences
who are below thirty-five years old—the most active cinema-going audiences (Movie Picture
Association of America 2010). This again has raised the issue of favouritism, since the CEO of
LCP came from the same state as the singer. Given the unpredictable nature of the sector,
however, the film might get a good response from the Malaysian public.
Geographical Location
As LCP’s animation products are geared towards the family market, their location in Shah
Alam is more suitable than in Cyberjaya. Shah Alam status as a mature city with a multiethnic
population from all classes will boost the company’s image and their merchandising sales.
LCP’s convenient location close to the federal highway, ample parking spaces, restaurants,
and malls makes it easier for the public to access to their products. Also, the proximity of
these facilities makes it easier for staff to work at Shah Alam than in Cyberjaya. Although
Cyberjaya has other advantages, particularly a high speed Internet connection, LCP does not
see it at as enough of an incentive to move there since they are not involved in outsourcing
activities. With at least three highways connecting Shah Alam to Cyberjaya, it is not a problem
for them to go to Cyberjaya whenever necessary.
Nonetheless, LCP’s local competitor, KRU Studios moved their operation to Cyberjaya
because of their close proximity to Putrajaya, and managed to secure many high profile ICT
contracts from the government and private agencies. As one of the local pioneers in the ICT
sector, KRU won the bidding; but this may also be due to their close connection with some top
politicians who are involved in making Malaysia policies and important decisions. Politics plays
a major role in the direction of the Malaysian economy. A close relationship to top politicians
can assist private companies secure high profile projects from the Malaysian government (see
Johnson & Milton 2003). Apart from this, other criteria make these companies successful in
the market. For example, their products have to be accepted by the market, particularly in a
new sector like animation. Also, KRU has a strong background in the creative sector, with
founders who are a famous trio sibling band, music composers, actors and film-makers. KRU
has operated longer than LCP, and established profiles and a strong network, KRU’s
movement to Cyberjaya is perhaps the best step for them to further expand their operation.
Prior to the relocation, KRU operated in Kuala Lumpur for more than fifteen years. The highest
priority for a young company like LCP is to strengthen their company profile and brand.
Hence, Shah Alam is regarded as the best location for their operation—it is important for them
to be close to their market, especially since LCP is not involved in any outsourcing activities
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(unlike KRU). In any event, currently LCP is more focussed on expanding their products in the
region than on other aspects.
Position in Sector
With their main product being an animated television series, LCP is directly involved in the
animation sector, which is part of the content industries. Not only have LCP managed to
produce international standard animation products at a minimal cost, but they also feature
Malaysian culture, which is different from other existing products in the international market.
This new feature introduces the uniqueness of Malaysia to the world, and attracts tourists.
This activity—known as film tourism—will contribute significantly to the local economy and
generate income for locals. Many places worldwide such as France, New Zealand, South
Korea and Thailand attract considerable number of tourists based on their films, television
dramas, documentaries and animations, which demonstrate the close connection between film
(including animation) and the tourism sector. Although measuring the contribution of LCP
animation products towards film tourism in Malaysia is difficult, their products offer significant
potential to contribute to this the sector. Indirectly, LCP animation products and 3D films also
contribute to other sectors (like merchandising and tourism) in Malaysia.
With the positive response from the local and Asian region market, LCP has proved that
Malaysian animation and 3D products are on par with international products. Before that, few
local animation products had the same impact as their international competition, even in
Malaysia, primarily because of the sceptical perception of local animation products among
local audiences. Arguably, the Malaysian local market prefers foreign products in animation
(Muthalib 2007), fashion (Zainol Ariffin 2011), furniture (Mohamed 2011), and films and music
(Basri 2011) compared to local products.
Malaysians audience can be less patriotic about the creative sectors, because they claim the
local products lack creativity. In comparison to creative talent from outside Malaysia, local
talents such as actors, film makers, and singers struggle to gain attention from local and
international sponsors. Maher Zain, a popular international Swedish singer performed three
times in Malaysia over six months (Basri 2011), while veteran Malaysian composer and
musician, Datuk Dr Ahmad Nawab—who produced more than 2000 songs for many Malaysian
popular singers since the 1960s—has been unable to perform at a big scale concert until
recently (Shamsudin 2011). In the animation sector, Muthalib (2007) observes that the general
consensus is that Malaysian animators are still not capable of producing competitive animated
films. Notably, LCP competes with large budget global players like Disney and Pixar. Also, the
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perception that cartoon or animation products are “children’s only” is still strong in Malaysia,
which means that although local products are sometimes better and cheaper than the foreign
products, the local market leans toward foreign products. In addition, Malaysia’s market is
fragmented by multiethnic groups who prefer to watch the productions from China, Hong Kong
(for Malaysian Chinese), and India (for Malaysian Indians) (Hoo 2006). However, younger
generations in these ethnic groups are starting to appreciate Malaysian products, although
there is still a preference for Japanese, South Korean and western products due to J-Pop and
K-Pop culture, and the effect of globalisation.
Future Plans for the Organisation
The positive achievements of LCP products in Malaysia and Asia demonstrate that their
products are well accepted in the region. Respondents believe that one of the major strengths
of their products is the point of difference of exhibiting Malaysian culture to the international
market. In the future, in order to make their products more relevant to the global market LCP
plans to mix local culture with global content. Also, they plan to diversify their products to other
content industry-related products, including computer games, feature films, IPs,
merchandising and franchising. Importantly, Malaysian culture will be the major element in all
of their content products.
However, as LCP has been operating for only six years, the company should consider
carefully their objective of diversifying. Not only does this require substantial funding, but LCP
also may not have expertise in some of the new areas, particularly in producing feature films.
Despite the success of their films and music in the 1960s, the Malaysian market is rather
small, and not many Malaysian films achieve local success (Hoo 2006). The recent
announcement from LCP’s CEO not to show their first featured film due to quality issues
(Mahmud 2010), and not to proceed with their second 3D film project, may tarnish their
reputation with the public. This shows that LCP should not jump eagerly to unfamiliar fields
where they lack expertise; rather, they should concentrate on establishing their core products.
LCP also should be more careful in evolving a new sector, as while their future could be
promising, there is fierce competition from both local and international products. For instance,
numerous local 3D animation films and television series will soon be released by companies
such as Animosta Studio—see Fig. 7.1.1 Boboiboy—and other products, including Alamaya
and Supertots. In addition, KRU Studios produced CGI musical, Magika, which received good
response from local audiences in 2010 following their two high-achieving CGI films, Cicakman
and Cicakman 2 in 2006 and 2007. In March 2011, KRU Studios’ multilingual, epic film, The
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Malay Chronicle: Bloodliners (refer Appendix 13) will be shown in 72 countries. Through the
constant support and incentives from the Malaysian government, market players and products
in the content industry are growing strongly each year, and a static audience size means that
competition is fierce.
Figure 7.1.1. Boboiboy 3D animated television series produced by Animonsta Studio
(Animonsta Studio Website 2011)
Organisation’s Mission
LCP’s mission is to penetrate the international animation market by using Malaysian culture as
their unique selling point. This uniqueness differentiates their products from those of other
countries. Currently, many countries in the Asian region are responding well to LCP’s
animation products and merchandise. Their new networking with animation companies from
China, India and South Korea is used as a platform to establish their products in these
countries and other countries. Thus, they are confident their animation and 3D film products
stand a good chance to break into the global market due to their distinctive image. This will
assist LCP and Malaysia to better position themselves in the global animation sector or at
least in the region.
Nonetheless, the Malaysian multiethnic image and culture may not be what the global or even
the local market desires. With the effect of globalisation and the implications of internationally
successful Japanese animation products, LCP’s animation and 3D products may be able to
find a place in the global market. For example, presently LCP products still cannot break into
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other regions, such as America and Europe, although they might get some attention within
Asia. As the new market player in animation sector, it is hard for LCP to compete with other
well-established products from Japan and the US. On one hand, their cultural image could be
a unique aspect for Malaysian animation, but on the other, not all countries understand or can
accept such cultural differences. As Khalid (2001, 154) states, the US company he worked
with (Matinee Entertainment) to turn his comic cartoon into an animated series, had difficulties
understanding Malaysian culture. Also, the rapid evolution of technology makes it hard to
predict the overall direction of the animation sector and the content industry. The market is
becoming complicated, and sometimes quality may not be what the market is looking for.
Perhaps differentiation of products is what the market is looking for.
Company’s Position in the Policy Context
With less than a decade to achieve Vision 2020, the Malaysian government is increasing their
efforts to develop ICT related sectors, including animation. These sectors are heavily
subsidised and have been growing for the past five years, in accordance with government
plans, and there is steady growth in advertising, animation, fashion, film, publication and
television production. For example, less than five animation studios existed in Malaysia until
2005, and that number has expanded rapidly to more than eighteen over the past three years
(3D World Magazine 2010). According to MDeC, the number of creative content producers in
Malaysia increased tremendously to more than 200 companies in 2010. More production
houses are involved in the animation sector, or adopt the latest technology such as CGI, Maya
technology, and Dolby sound applications in their productions. In addition, the number of
higher institutions in Malaysia offering ICT-related courses in order to produce higher qualified
human resources is increasing every year. As a result, these factors have contributed to the
high quality work produced by the local companies on animation series, 3D films, video
games, and other related products. Also, the Malaysian public are becoming more aware of
the high quality of local products compared to the last ten years.
Nevertheless, the domination of developed countries in animation and the content industry is
still a threat to developing nations like Malaysia. Global film markets (including animation) and
television productions are dominated by western products particularly those from the US
(Rosnan, Ismail & Mohd Daud 2010). Since the majority of content industry companies in
Malaysia are categorised as SMEs and have limited funding and facilities, their target market
is restricted to within Malaysia or around South East Asia. The chances for their products to
go abroad are slight without help from the government and private sectors. Hence, their
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growth is heavily dependent on government support and incentives. Funding is always a major
challenge, competing with international products that have strong financial and technical back
up is never easy. The government funds like the Creative Fund and the E-Content Fund have
been created to assist the development of Malaysia’s creative economy to become one of the
important players in the animation global market. However, the processing of funding
applications is claimed to be complex, inefficient, slow, not transparent, unprofessional and
unfriendly (Hoo 2006; Leong 2009). Malaysia’s ongoing position in the creative economy
globally is hard to predict, but their local market has a significant future, that perhaps will spill
over around the Asian region.
With proper training and education, LCP staff members have conceived quality products in
contrast to the previous animation products in Malaysia. They use higher technology facilities
at a minimal cost after receiving significant support from the Malaysian government and
private agencies. LCP received support from at least three ministries and two private
organisations for their first 3D film. Since LCP commenced operations, the Malaysian
government and private agencies have become increasingly aware of their presence, and
have been more prepared to offer the right equipment and support. In addition, the public is
ready to embrace their product.
The significant progress of LCP animation products and merchandise in Malaysia and around
Asia is due to the collective efforts from the government, particularly MDeC and other
corporate companies, as compared to the previous animation companies. The establishment
of MDeC has enhanced the creative industries in Malaysia, and taken them to the next level.
The government has initiated support of the creative industries, and the local market now
follows the government’s lead. Hence, O’Connor’s (2007) argument that this sector is using a
top-down approach cannot be ruled out entirely, particularly in Malaysia. Also, their products
meet many of the needs and wants from the local and regional market, while the animation
products of previous companies failed to identify those elements. Of the four animated films
produced in Malaysia, LCP’s 3D film exhibited good story boards, the highest quality
technology, and was almost on par with other international products. The film is suitable not
only for children, but also for other family members because the story has characters that
represent each age group. However, there is lack of high quality movement of the characters,
with movements still looking slightly robotic compared to characters created in more advanced
countries. The staff members of LCP need to upgrade their skills in this regard. However, as
the cheapest 3D animated film available internationally, this lack of technical skills is
understandable.
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7.1.2: RQ1: What are the main operational issues for Malaysian creative
economy enterprises? Malacca Museum Corporation
Workplace Issues
Staff members at PERZIM comprise a mixture of all ages and qualifications. This creates a
good blend of younger and older generations, which is necessary for their institution. As a
museum corporation, they preserve and take care of Malaysian culture. This mixture of staff
could contribute to PERZIM’s accomplishment in attracting a significant number of visitors
compared to other museums in Malaysia and the Asian region. Their products and services
combine the modern and traditional to fulfil the interests of visitors. Hence, PERZIM needs
staff from all ages to represent their market.
However, the qualifications of their curators are not varied enough, and almost 100 per cent of
their staff is from Malacca. This may result in a lack of interesting ideas. Also, by limiting the
intake of their staff to only locals PERZIM have limited the potential for more domestic visitors
from other states to their museums.
Management Approach
The curators of PERZIM are state government staff, and abide by the rules and regulations of
Malacca state. Their role is to manage the museums. The General Manager (GM) acts as the
CEO of the corporation, and he works together with the museum curators to administer all
PERZIM museums. Each curator manages between two to eight museums.
However, not much authority is given to these curators. Each curator has to defer to at least
three stakeholders before making any decisions. This may cause conflicts of interest between
the desires of the federal and state government, and UNESCO, who all may support the
museums financially and in promotional aspects, but can complicate the decision-making and
implementation process. New changes require approval from more than one stakeholder,
which involves tiered-level decision-making. The organisation uses a top-down management
style, where lower level staff may have fewer opportunities to discuss changes with top
management.
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Geographical Location
Malacca attracts a significant number of local and international tourists. Their status as a
Malaysian Historical City and UNESCO World Heritage City aids in promoting their museums
to tourists. Today, Malacca has the most number of museums in Malaysia, particularly around
their city centre. Visitor responses to their museums are among the most positive in Malaysia
(refer Appendix 14). With the proactive support from the state government—who continually
raise new and fresh ideas for tourism products and services—the state has established the
most museums in Malaysia. Their Facebook fan page attracted more than a thousand people
until November 2010, and they update the page regularly with their activities. Their proximity
to Kuala Lumpur, Putrajaya, Kuala Lumpur International Airport, and Singapore makes the
state easily accessible by local and international tourists.
However, the state government’s weaknesses in forecasting and planning the city have
caused massive traffic and congestion problems during weekends, and public and school
holidays over the past five years. The local people of Malacca avoid visiting the city during
peak periods, when parking is hard to find, making drivers parked their car by the road side,
which affects the traffic flow. This congestion leads to other problems like pollution and price
increments among the hotels and taxis.
Position in the Sector
Their products and services of PERZIM combine culture and tourism with some elements of
innovation, to provide different experiences to their visitors compared to the other museums.
PERZIM regard themselves as cultural tourism providers with new, additional roles. Therefore,
many current programs and activities organised by PERZIM portray their new role, and also
attract more visitors from all markets to consume their products and services. In recognition of
the rapid development of ICT in the world PERZIM, is also implementing such applications.
However, PERZIM status as a non-profit organisation means that they depend heavily on
state and federal government financial aid. With minimal charges collected from the visitors,
PERZIM has a limited budget and income to make significant changes that involve advanced
technology. As a result, PERZIM’s museums are less attractive to certain group of markets,
especially in comparison to Singaporean museums. Also, the museums have to compete with
many modern and unique tourism attractions in and outside Malacca city. These attractions
managed to attract a substantial number of people compared to the museums. PERZIM needs
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to be more imaginative in attracting visitors to their museums. By using ICT applications and
innovative planning, the corporation can become competitive with other tourism attractions.