Perak’s Future – Part III

Last part of Charting the Future of Perak: Why Heritage and Technology Matters, on the fate and potential future of the state

The Unlikely Twin: Technology and Heritage

It is my sincere opinion that it is possible for Perak to focus on a winning development model which taps on its strengths and fills the void left by the tin mining industry.

Technology

Firstly, the government made a very creditable move of emphasising on ICT for Perak. It is the right direction. To make this a greater success, however, a clearer model and implementation programme is essential.

There is very little meaning in saying that we will focus on the ICT industry. It’s almost akin to answering ‘food’ to the question of ‘what do you want to eat?’ The ICT industry is an absolutely immense sector. Without focusing on a specific segment and specialising on it, it is very difficult to achieve economies of scale and critical mass for industrial success.

Instead of aiming straight up to the top of the value chain of the ICT sector, Perak can focus on a medium-level but significantly lucrative industry – outsourcing and particularly, business processes outsourcing (BPO). This is essentially the industry that is kick-starting India into international relevance. Using advances in telecommunication technology, namely fast internet connection, generic business processes such as ICT administration, human resource management (HRM), finance and accountings and even medical services can be done away from headquarters of companies to third-parties which can do them at lower-cost. For example, multinational companies operating in KL, Penang or even Singapore could be outsourcing its HRM processes to Ipoh, where it will be done at by local workers. This would effectively integrate Perak into the global supply chain of the modern economy. In fact, Perak could be the national BPO hub for government agencies. Aligned with the effort to improve the delivery system, Perak could function as an effective and low-cost centralised outsourcing centre for government administrative work. Clearly, the potential is immense.

And Perak has all the crucial ingredients for this to work. One of the most important factors in considering an outsourcing centre is cost, and Perak has one of the lowest costs of doing business in the country. For example, the costs of labour and properties, as well as the general cost of living in Perak are significantly competitive; much lower than the national average. Doing business in Ipoh could potentially be more than 3 times cheaper compared to KL.

Furthermore, Perak has many education institutions, both public and private which could provide the industry with the relevant workforce. Perak true strength in education lies in its secondary education. Secondary education in Perak is arguably one of the best in the country, producing the best young talents of the nation. Most of them however, are now in other parts of the country given the lack of opportunities at home. As alluded to earlier, if Perak could provide excellent employment opportunities, these talents will contribute substantially to the pool of knowledge worker in the state. Coupled with its relatively good general infrastructures, including transportation system and social amenities, it is easy to see how Perak can be a contender.

The crucial remaining element now is the modern infrastructures relevant to the ICT sector, particularly reliable and cost-efficient broadband connectivity. In the outsourcing industry, reliable and fast internet connectivity is absolutely crucial. Disruption could result in millions of ringgit lost in current and future businesses.

Heritage

The second pillar of strength that Perak could ride on is its rich heritage. After the demise of the tin-mining industry, the food and beverages industry partly became a niche filler for Perak. Penangites might disagree, but Ipoh has the best food and coffee in the country. The fear, however, is that the insufficient attention given to properly develop and nurture this industry is turning it into a dying trade. It will be a great loss to everyone.

On top of that, Perak also has amazing natural heritage. From pristine caves to beautiful beaches, the state has immense potential for the eco-tourism. All these elements can be properly integrated and supported by the government to develop the ‘heritage’ industry, catering to the fast-growing lifestyle conscious Malaysian population. And the good thing about Perak is that it already has a ready supply of ‘loyal tourists’ in the form of Perakeans working outside the state. A scene of any towns in Perak during major festivities clearly illustrates this – with throngs of Toyotas and BMWs occupying roads and hosts of people in restaurants, these people bring with them huge spending power, and if properly capitalised and explored, will result in substantial economic potentials.

Conclusion: The Marriage

It should be noted that the emphases on technology and heritage are not mutually exclusive and independent from each other. On the contrary, it is mutually reinforcing and absolutely crucial for both to coexist. The expansion of the ICT sector would result in growing incomes for Perakeans to spend in the ‘heritage’ industry, leading to further expansion in the latter. Perhaps more importantly however, is on what the ‘heritage’ industry could offer. It should be remembered that the knowledge workers at the heart the ICT sector are like any of us. Beyond work, we need good lifestyle – from food to the environment to the charm that towns in Perak could offer.

Indeed, for most of us, to have both the good quality life that a charming town like Ipoh could offer and to have a challenging career that is integrated to the modern economy is like having the best of both worlds. It is something that most of us do not exactly have. But it is something that Perak could potentially offer if it decides to embrace the future and celebrate the past.

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Elanor

12 June 2006