Inside Cyberjaya, Malaysia’s failed Silicon Valley

by NICOLE KOBIE
Wired
05 APRIL 16

It’s past three in the morning, and our cab driver is lost – not only had he never heard of the city of Cyberjaya, but he also couldn’t find our hotel at its centre, the wonderfully named Cyberview Lodge Resort, built twenty years ago when ground was first struck at this would-be Malaysian Silicon Valley.

As we swung around yet another empty roundabout in the middle of the jungle, naked of any buildings or road signs, it was hard to fault the driver.

Ask government officials and developers, and Cyberjaya is a success, the heart of its knowledge-based economy: 85,000 people live there, they say, and dozens of multinationals have offices – and in a few years the train lines will reach out here, too. But ask a taxi driver in capital city Kuala Lumpur, only thirty minutes’ drive away, and they haven’t a clue what you’re on about.

Even those embedded in the tech industry might not be aware of Malaysia’s early attempt to jump on the digital bandwagon; I first heard of it via a now obscure story by Canadian journalist Chris Turner, who visited Cyberjaya in 2000, three years after its press launch.

Cyberjaya is a 30 minute drive from bustling Kuala Lumpur, but has struggled to realise its lofty ambition of becoming the Silicon Valley of MalaysiaGoogle Maps
Writing for Shift magazine, now defunct (and not online; the essay lives on via his latest book), he too asked his driver “Do you know where you’re going?” and noted an absence of people, anywhere. Turner also struggled with the disconnect between a country trying to build the next Silicon Valley while simultaneously having a derisible record of online freedoms. Last month, the Electronic Frontier Foundation described Malaysian internet censorship as going from “bad to worse”.

In some ways, little has changed in the nearly two decades since Malaysia dumped billions of dollars into building the city to house the Silicon Valley of the east. On a driving tour of the district, we looped around a large lake, past low buildings, and along near-empty roads all named “multimedia” this and “cyber” that.

It was hot and rainy, perhaps explaining why we spotted only a handful of people on our driving tour of the district – though the weather didn’t keep the pack of feral dogs off the lawn of the local police station. New restaurants and malls were pointed out and dutifully admired, but they must compete with the manic, bustling allure of KL, as Malaysia’s capital is better known.

I was in Malaysia as part of a trade mission for British technology firms organised by UK Trade and Investment and Innovate UK. Their hope? To win partners and investment in the so-called Multimedia Super Corridor (MSC). One investor who attended the trade mission’s pitching meetings said his company had an office in Cyberjaya, because that ensured a decade or more of tax breaks, but he avoided it in preference of the KL location – where there’s stuff to actually do after work.

There has been some progress at Cyberjaya, however. Back when Turner visited, there were 25 companies based there; there are now 800, of which 40 are multinationals. Our guide Fina Ishak, head of investment promotion at developer Cyberview, told us Cyberjaya had so far drawn 86,000 residents, though a quarter of those are students at one of the five universities or colleges. And 40 per cent of those are from overseas.

Forget the retro-named, empty streets: the real problem is the work on offer. The 35,000-odd people who are actually employed in the district aren’t building the Googles of the future, but providing support and call centre services for global IT firms, who are in turn drawn by the cheap rent, budget broadband and tax deals. A local recruiter laughed at the idea of a Silicon Jungle, saying Cyberjaya was purely low-level employment. Ishak described the jobs on offer as shared services outsourcing (SSO), describing them as “mostly desk-bound” and “customer-service oriented jobs” that paid about £300 a month.

Malaysia has slowly realised it’s missed the value in technology, and Cyberjaya is attempting to catch up. It’s time to forget Silicon Valley – it’s time for something new, Melissa Teh, business development lead at Cyberjaya, told me. “Now we’re going to be a tech hub that’s self-sustaining.”

Moving away from outsourcing and into more creative, lucrative work won’t be easy. Cyberjaya will focus on the internet of things, and in particular smart cities and also encourage startups to move into the area. “In the first few years of its inception Cyberjaya only housed SSO workers, which do not go up to the high income chain, hence the shift whereby we now focus more on innovative works and creativity,” Ishak said. “When you have startups, that’s where you have all this innovation coming up and thus will assist the country to move up the high-income chain.”

The upside of building a city from scratch is that it gives you full control to try out new ideas, so Malaysia is now pushing Cyberjaya as a “living lab”. Have a smart technology you want to try in a real city? You’re very welcome in Cyberjaya.

The plans aren’t that ambitious – it’s mostly smart traffic lights, electric vehicles, and digital signage – but the ability to link it all together in one city could be compelling. And it gives a head start to internet of things and smart city startups based locally, desperate to trial their ideas in a real-world setting.

Dubbed MaGIC (Malaysian Global Innovation and Creativity Centre), Cyberjaya’s startup hub has a wide-ranging programme, from co-working to developer training and business bootcamps. There’s also a four-month accelerator for startups, which attracted 800 applications for its first session. A total of 50 spots were filled, split 30 local and 20 foreign.

The foreign attendees won’t feel out of place: the MaGIC headquarters are a mashup of Shoreditch and Google – Ishak said the developers visited Western co-working spaces as well as Google’s offices with the aim of aping their decor. The interior uses bold primary colours, with breakout rooms covered in fake grass instead of carpet. Outside, there’s a hotel made of shipping containers, home to a selection of startups who have won support to come and live and work locally.

Inside, you’d be hard pressed to tell if you were in London, San Francisco or Malaysia – the most noticeable difference is the higher proportion of women here than in Western accelerators I’ve visited. Startup founders gather at MacBooks in desks scattered about, though their Beats headphones sit atop hijabs. The walls proclaim “fireside chats” and a weekly “happy hour” mixer, though it serves teh Tarik, the local flat-white of teas, rather than bottles of beer.

Cyberjaya’s MaGIC startup hub took inspiration from Google and other western companies, introducing breakout rooms and decorating in bold, primary coloursNicole Kobie
To date Silicon Valley mimicry has failed Cyberjaya, so what can it do to be different? The accelerator is advertising for applicants from Japan and China, and happily takes startups from around the world. There’s a worse way to explore the Asian market for your startup than a tax-free tech hub with free accommodation and, in the near future, its own pool beneath the palm trees.

Back in 2000, Turner suggested it was easy to “laugh at the MSC’s folly,” thinking that there’s “no way a place like this is going to become the next Silicon Valley,” but even then realised it was better to see Cyberjaya as something entirely different. It was foolish to think that Malaysians “were busy building the next Silicon Valley. They’re not,” he said. “They’re building the first Multimedia Super Corridor.”

Whatever the MSC might turn out to be, Turner’s right, though it’s impossible to say if the attempted shift from Silicon Valley to homegrown Malayasian talent will be enough to reboot Cyberjaya as a home for innovation rather than call centres.

But it’s surely on a better road than before: imitating Silicon Valley led to roundabouts looping pointlessly through the jungle, after all.