Malaysia’s ICT sector policymaking: toward a developmental network state

Abstract

The history of Malaysia’s efforts to develop an internationally competitive information and communication technology (ICT) sector demonstrates how state interventionism has shaped its development trajectory. Early ambitions to ‘leapfrog’ Malaysia’s development by launching a cutting-edge innovation-based ICT sector failed, yet recent dynamism has established an internationally competitive shared services/global business process outsourcing sub-sector, as well as created a thriving eco-system for ICT-based start-up entrepreneurship in industries such as digital platform services and creative content. The renovation of the state’s role exemplifies key features of O’Riain’s model of the developmental network state (DNS) including the decentralization and networking of public agencies implementing industrial policy across the enterprise development life cycle, as well as a fast-follower approach to targeting. Unlike the DNS model, however, in Malaysia an enterprise ecosystem policy approach has not eroded the state’s overall economic leadership by embedding public authority in networks with private business interest group constituencies.