The systemic quad: technological capabilities and economic performance of computer and component firms in Penang and Johor, Malaysia

Abstract

This paper draws on the work of growth pole, lead sector and industrial district, business school and evolutionary exponents to develop the systemic quad as a regional development model to explain differences in systemic support and impact on knowledge activities, technological capabilities, productivity and wages in computer and component firms in the states of Penang and Johor in Malaysia. The results show that Penang has enjoyed fairly strong development of basic infrastructure, network cohesion and integration in the world economy while Johor has achieved strong development only in the first pillar. Consequently, computer and component firms in Penang show higher technological capabilities and incidence of participation in knowledge-intensive activities than firms in Johor. Penang firms also enjoyed higher labour productivity and wages than Johor firms. However, because of poor high tech infrastructure, none of the firms are engaged in level six knowledge-intensive activities in both states.