By Eli James | e27

In the spring of 1999, Businessweek ran a cover story titled ‘Mahathir’s High-Tech Folly’, on the challenges plaguing the then Prime Minister’s plan to set up a regional ‘Silicon Valley’ within Malaysia. The plan was ambitious: it detailed the development of a large economic zone, stretching 750 square kilometers, and promised fiber-optic networks, research facilities, tax breaks, and new ‘cyberlaws’, protecting any multinational setting up shop in the country. The economic zone was named the ‘Multimedia Super Corridor’(MSC), and the city in which this development was supposed to happen – Cyberjaya.

For a while, all was good. Mahathir had managed to convince Silicon Valley luminaries Bill Gates (Microsoft), Lawrence Ellison (Oracle) and Scott McNealy (Sun Microsystems) to sit on a 41-member advisory panel to the project. They lent the MSC immediate weight and credibility. In talks during a 1997 global tour to sell Cyberjaya, Mahathir called the city his ‘gift to the world’, and promised that it would be a ‘global bridge to the Information Age.’ The praise poured in. Businessweek reported that Mahathir was ‘regarded as something of a visionary in high-tech circles’. Microsoft then announced that it would make MSC its regional headquarters. For a brief moment, it seemed as if Malaysia — with its cheap land and inexpensive, English-speaking workforce — was set to become the region’s go-to choice for multinational technology companies.

Then the Asian Crisis hit. The Businessweek piece mentioned earlier in this article was written shortly after the worst of the crisis had passed, and it covered the effect of the crisis on the MSC through the lens of its leader:

While recession is partly to blame, Mahathir’s response to the crisis has dealt the most serious blow. His rhetoric blaming Jewish conspirators for his country’s woes has dismayed multinationals. So have his moves to impose currency controls–and his decision to arrest Anwar Ibrahim, his former protege and Deputy Prime Minister, and put him on trial. ”Mahathir’s behavior has set back the MSC several years, even in a best-case scenario,” says a Westerner who has advised on the project. ”Worst case, it has destroyed the momentum.”

Key foreign investors pulled out shortly after the crisis, and the Government has since stepped in to prop Cyberview Sdn Bhd – the company tasked with the management and development of the planned township. After an initial series of IT campaigns, the national agenda for MSC development has ground to a halt.

Today, Cyberjaya is but a whisper of that original promise. It is a moderately successful economic zone, with IT parks and office blocks and above-par Internet connectivity. But the hype is gone, and whatever coverage there exists today are mostly press-releases by Cyberview.

The township consists of commercial/office blocks, a science park, two universities, and a couple of residential buildings. It is this last point that is a sore spot for Cyberjaya — Cyberview has been working to rectify a lack of housing in the area, which has been responsible for an emptying out of the city at night. Unsurprisingly, there is not much of a nightlife in Cyberjaya — many workers there commute back to neighbouring Kuala Lumpur after the day is over, decreasing the township’s population count from 36,000 to about 14,000 at night. And it is telling that while there are people from Cyberjaya who commute to KL, few from KL come out to Cyberjaya for anything but work.

Cyberjaya has few shopping facilities and little or no entertainment outlets (beyond a township community club).

There are, however, signs of renewed interest in the project. Most recently Malaysian company Emkay Group and India’s Embassy Group entered a joint-venture project called the MKN Embassy Techzone. The project promises three million sq ft of office space on a 12-hectare land parcel in Cyberjaya, with the eventual aim of getting IT companies both foreign and local to relocate to the area. This effort seems to be rather successful – in 2009 Cyberview reported an expected 10% increase in companies moving into Cyberjaya.

And if that isn’t a good enough sign, Cyberview reports that in the coming months, the Hewlett-Packard (HP) Global Information Technology Hub is set to open in the township, along with an 80,000 sq ft SME Technopreneur Centre and Phase 2 of a K-Worker (Knowledge-worker) Development Centre.

But a March 2009 story is more telling of the current direction Cyberjaya is headed for. Malaysian newspaper The Star reports, that with an increased number of government-linked companies and departments, Cyberjaya is ’slowly moving away from being an information communication technology hub’. It appears that the original dream, at least, has been forgotten.

So what does this all mean? First, Cyberjaya is a development zone set up to attract foreign tech-based multinationals. As a township its function is primarily economic, with little non-essential amenities apart from that which is required for it to run. There are blocks built for the incubation of small and medium size enterprises (SMEs), but as of press time the entrepreneurship programs provided by the government in relation to Cyberjaya are patchy, at best. And it must be noted here that Cyberjaya is not focused on web startups – the majority of locally grown SMEs are companies like CRUiSE GPS Systems, a ‘Global Positioning System (GPS) tracking and navigational solutions provider’, and RL Dynamic Engineering, a ’specialist in advanced educative, entertainment and training motion simulators’. In simpler terms, Cyberjaya is more geared towards the Intels of the tech world, as opposed to the Twitters or Facebooks which seem to be all the rage in Silicon Valley today.

It is hard to say if Cyberjaya has been a success or a failure – my view is that the verdict is still out on this. On the one hand, the township has been a disaster for many of the original investors. After the Asian crisis and Mahathir’s resignation, there has been little impetus to grow Cyberjaya as originally planned. But on the other hand, Cyberjaya has managed to attract a significant number of companies over the past five years, and Embassy Group’s chairman Jitu Virwani has been reported saying “Here was a city with all its infrastructure just waiting to be tapped by IT companies. It was amazing. It’s something we dream about in India.”

Perhaps it is that last point we must remember: that although the infrastructure exists, Silicon Valley (and – by extension – Cyberjaya) is more than the sum of its parts; more than a collection of office blocks and incubation clusters and wafer fabrication plants. It is made of people – of venture capitalists and entrepreneurs and technologists – and people are what Cyberjaya needs the most.