Working Paper
The industrial policy experience of the electronics industry in Malaysia

Despite the use of industrial policies to stimulate economic growth by several successful developers, latecomers have faced mixed experiences. Hence, this paper analyses the industrial policy experience of the electronics industry in Malaysia. A blend of institutions have guided technological upgrading in the industry, especially in the state of Penang.

Smooth co-ordination between the state government, multinational corporations, national firms, and the federal government helped stimulate technological upgrading in Penang. However, the lack of a critical mass of human capital and support from research and development organizations has discouraged the transformation of firms in the industry to the globe’s technology frontier.