How Malaysia aims to reboot its 'smartest city'

CYBERJAYA, Malaysia — Signage for IBM and Hewlett-Packard is emblazoned on looming grey office buildings along the wide roads of Cyberjaya. In smaller buildings down the street, developers sit behind large monitors, creating online games, mobile apps and popular 3D animated YouTube series.

Despite the presence of both big and small tech players, the Malaysian city, a 30-minute drive south of its cosmopolitan big sister Kuala Lumpur, no longer aspires to be the next Silicon Valley. Instead, developers say, it will be Malaysia’s own unique global tech hub — a testing ground for innovative ideas and a breeding ground for new ones.

But the journey from a former palm oil plantation to a cutting edge tech empire has proven as winding as the many looping roads that spiral from the highway toward the office building that houses Cyberview, the company behind the development of Malaysia’s self-proclaimed “smartest city.”

The undertaking has seen its share of struggles — perhaps the greatest, according to outside observers of the project, being that the government and developers have been too stubborn to adapt the vision to better suit Malaysia’s resources along the way. Twenty years after its inception, the Cyberview team and master developer have hatched a new strategy to launch the project from call center tech park to innovative smart city.

Today’s tech park

Cyberjaya is currently a tech park sitting on a sprawling 7,000 acres, along with residences that nearly 100,000 people call home. The extensive broadband, free public wifi and traffic light sensors that currently account for its “smartness” are not groundbreaking.

But ideally, its developers tell Devex, Cyberjaya will grow to be a tech-enabled city boasting innovation and more than 500,000 residents.

To close that gap, developers face a tricky “chicken and egg” question of attracting the strong tech companies that will hire new employees while at the same time drawing the commercial aspects and infrastructure that will entice those employers and employees to stay.

Rahul Mittal, an architect and urban designer based in Singapore with years of experience in Southeast Asia, is attempting to thread this needle in other contexts, and offers his perspective on Cyberjaya.

“The government will, for example, give [retailers] subsidies and tax breaks and maybe free rent for a few years,” Mittal said. “But eventually you need the mass market to come in and drive sales at these commercial centers.”

These tasks have proven difficult for a bounty of reasons, the first dating back 20 years to the original vision of the city, which still drives its development.

The establishment of Cyberjaya “will enable Malaysians to leapfrog into the Information Age,” Mahathir bin Mohamad, then prime minister of Malaysia, said during the city’s groundbreaking ceremony in 1997, when many nations were dreaming of building the “Silicon Valley of the East.”

But skipping phases that other cities have undergone to become the poster child of “smart” has proven impossible. There are now more than 800 tech companies located in Cyberjaya — of which 40 are global and regional multinationals — but the city has been slow to attract the permanent residents it seeks. Nearly one-quarter of its current population is comprised of university students.

Mohamed may have underestimated the thriving cultural hub KL would become. Most employees who work in Cyberjaya — even the majority of Cyberview employees Devex spoke with — still choose to commute from Kuala Lumpur, creating a ghostly post-work evening atmosphere in the aspiring smart city.

An afternoon driving tour of the district exposes very little foot traffic along Cyberjaya’s quiet roads, despite zipping by several malls, a university, a hotel, a few strip malls and residential infrastructure under construction.

Although the development no longer aspires to model itself off of any other city — according to Mahadhir Aziz, head of Cyberview’s technology hub development division — its current layout encourages driving far more than walking or biking, a feature reminiscent of California’s sprawling tech hub.

Setia Haruman, Cyberjaya’s master developer, seeks to right these problems with a new city center that will see its first phase, valued at more than $1 billion, completed in 2019. The new central business district will sit on 140 acres in northeast Cyberjaya, starting with a hotel, a residential development and a shopping mall to support the mass rapid transit train Cyberjaya will soon welcome from KL.

“How Cyberjaya was created is different than other cities,” said Siti Mariam Mohd Desa, head of corporate strategy at Setia Haruman. “In others it’s the residences that came first, but here it was the business community built first, then came the residential and retail.”

The buildings in the new development will be closer to each other, she told Devex, to allow developers to test out ideas from other smart cities, such as a car-free zone, and to encourage people to walk.  

It’s a plan Mittal finds promising if it generates more pedestrian activity, reduces transportation costs and makes the city more attractive for retailers and residents alike.

It’s not pedestrian-friendly city planning, though, that has kept Hairul Sofian, co-founder and director of animation company Digital Durian, in Cyberjaya. Sofian founded his company in an incubator offered by national ICT company Multimedia Development Corp and has now expanded and moved floors to accommodate his growing business. He stays in the city because of the reasonable rent and ability to recruit young talent out of the local university — one crucial aspect of a smart city Mittal said Cyberjaya developers need to get serious about.

Mittal pointed to Stanford University’s synergistic relationship with Silicon Valley, where Stanford is producing top talent while tech companies are in turn pumping funding into the university to create a knowledge-sharing environment. An example of academia and tech industry partnership can also be found closer to Cyberjaya — in Singapore, where the National University of Singapore “attracts brains and investment from around the world,” Mittal said.

Multimedia University, which opened in 1999, is the longest standing of two international universities in Cyberjaya. While Multimedia Development Corp does work with the institution on talent development strategies and internship initiatives, it hasn’t yet reached a synergistic relationship or reputation that would draw other researchers.

This collaboration is the biggest piece missing in Cyberjaya, according to Mittal.

“You’ve got the land, KL and KL International Airport not too far away, but until you invest in education facilities, you will not be able to attract researchers and multinational companies to relocate to Cyberjaya,” Mittal said. “Why would they go there instead of Singapore or Hong Kong?”

One thing is certain: Throwing in the towel on creating Malaysia’s smartest city and instead “creating a fantastic, world class tech park environment with great connectivity and linkages back to KL,” which Mittal suggested as another option, is eschewed by Cyberview planners.

Cyberjaya “was never meant to just be a tech park,” Aziz said. “It’s meant to be a place where people can actually grow and live.”

Tomorrow’s global tech hub

The big names currently present in Cyberjaya are not involved in the kind of smart technology the city wishes to host.

IBM, Hewlett-Packard, DHL and Shell — most of which also have offices in KL — have based their regional call centers and business administration in Cyberjaya, rather than their research and development arms.

Somewhere along the way to its vision of becoming Malaysia’s shiny technology capital, Cyberjaya became one of the primary locations for the global shared services and outsourcing sector, ranked third only behind India and China.

“We created a niche on our own … rather than moving toward our vision a certain way, we took the long way to get there,” Aziz said. “Now we are mature enough and can build on success we have had so far into other areas.”

Moving forward, the city wants to attract more startups, which is what will create a vibrant ecosystem for entrepreneurs and small to medium enterprises to flourish and drive the city’s economic growth, he added.

To do it, they’ll continue to offer tax breaks and subsidized office space, as well as entrepreneur training programs and funding access assistance for new business. Rolling out city-wide network technology designed for “internet of things” applications, which enables devices to send and receive data, is another step toward this, Aziz said. They’ve also introduced the concept of Living Labs, which presents the city as an innovation platform for developers and researchers to come and test or validate new IoT technologies in Cyberjaya before launching elsewhere.

It’s an attractive offer and “a good corrective action to move away from doing this tech valley idea and focus more on up and coming future tech and being an incubator,” Mittal said.

Having a cohesive vision of what they are and what they are not will also help Cyberjaya provide clarity for their tenants and partners, he noted.  

“They need to support that [vision] with the right infrastructure, whether it’s transportation systems or education with university link ups that already exist there,” he said.

Cyberjaya may still be far from its original vision, but it’s no failure, according to its team of developers.

“Yes, some will say we have failed to reach that [original] vision, but again 20 years is not that long,” Aziz said, reminding of the fact that Silicon Valley took more than 40 years to become the world renowned tech hub it is today.

In another 10 years, developers hope to see the high-speed rail from Singapore reach Cyberjaya, which would allow people to live in the city, work in Singapore and vice versa.

It’s a development that would help transform the city into a capital of creation — an evolution its developers are counting on.

Over six weeks, Devex and our partners will explore what it takes to build a successful smart city, how climate resilient and environmentally friendly infrastructure and technologies are being implemented, and how actors in the global development community are working together toward common goals and engaging local communities in an inclusive way. Join us as we examine what it takes to create our smart cities of the future by tagging #SmartCities and @Devex.