Penang is an island with a thriving commercial centre and a pro-commerce state government. Although it’s the second smallest state in Malaysia, it’s not letting that stand in the way of major economic growth and this tiny island is punching well above its weight when it comes to business acumen. In recent years the bustling business community has become a leading light in the country’s economy. Penang has the third-largest economy amongst the states of Malaysia, after Selangor and Johor, and also has the highest GDP per capita in Malaysia, making it an affluent location as well as a business-friendly one.
While manufacturing may be the primary driving force behind Penang’s economic success, it is also a great location for start-up businesses to get a foothold, especially low-overhead businesses such as software development. High-tech electronics are focused around the northern end of the island, which also ties in well with software start-up businesses. Over the years this has also encouraged a high level of international investment from companies like Dell computing, Motorola, Intel and Seagate.
An attractive proposition for business
In the last few years there has been a slight decline in the amount of investment money coming into Penang, particularly when you take into consideration the lower labour costs of manufacturing in countries like China. However, Penang is still an attractive proposition for investment, and that makes it the place to be if you want to start up your own business.
The location of so many international banks in the region also makes starting a business in Penang an attractive proposition, as the opportunities for approaching financial investment firms is greater here than almost anywhere else. There are also a number of specialist recruitment firms such as Yellow Elevator, who marry up opportunities with potential employees. With such a highly trained workforce to choose from concentrated into such a small area, Penang is also rich in experienced businessmen and women, skilled software designers, accountants and financial experts – everything the small business owner needs to get started!
Who’s leading the way?
Currently in Penang there are a clutch of new businesses who are proving that diversification is the key to future survival. As many high-tech electronic firms move their manufacturing overseas to countries like China, it’s businesses such as software development that will ensure the continued success of this region. Companies such as Exabytes, Malaysia’s largest web hosting business, are based in Penang, as are infographics experts Piktochart. Web production company Netizens Media are leading the virtual charge, and the number of digital start-ups in Penang is growing every day.
While the high-tech manufacturing industry may be in decline in Penang, especially with the loss of Penang’s free port status, business groups such as The Penang Development Corporation and InvestPenang are doing everything in their power to bolster new sectors and encourage start-up businesses to make the island their home. With so much potential and a strong commercial sector already in place, it makes sense to do business in Penang!
Carlo Pandian is a freelance writer and management graduate. He loves sharing small business tips from the latest accounting software solutions such as QuickBooks to hacks for social media campaigns. When he’s not online, he likes volunteering at his local community centre.