Historical of Industrial Development Strategies in Penang over the Last Five Decades: A Study of the SMEs

The aim of this paper is to examine the history of industrial development strategies with respect to small andmedium enterprises (SMEs). The paper starts with the historical economy development in Penang. In Penang,the structural transformation of the state was enabled by the leadership of four State Chief Ministers. Firstly,under the leadership of Tan Seri Wong Pow Nee, we see the establishment of MakMandin and the PeraiIndustrial area. Secondly, under Tun Dr Lim Chong Eu there was the transformation of Penang into anindustrialized entity. The rapid economic transformation during this period using the Penang DevelopmentCorporation as a facilitating mechanism made a big impact on the Industrial Free Trade Zone, especially in termsof making use of the industrial policy to improve employment opportunities. Thirdly, efforts were made by TanSeri DrKohTsu Koon, the third State Chief Minister, in the 1990s who took his own initiative to uplift SMEsthrough global supplier programs in PDC. Dr Koh Ksu Koon improved the framework that was inherited fromLim Chong Eu. Finally, from 2008 onwards, under the leadership of Lim Guan Eng, the secretary-general ofDAP, the national opposition party currently ruling the state of Penang, the state has changed its direction,whereby besides concentrating on the electronic sector, it has also promoted Penang as a centre for the medicaltourism industry. This shift in development and sectoral paradigm is due to the challenges faced by Penang fromglobal competitors, namely Malaysia’s neighbors such as China, Vietnam, Indonesia, Thailand, the Philippines,and Cambodia.