Abstract

The aim of this paper is to examine the history of industrial development strategies with respect to small and medium enterprises (SMEs). The history of economic development in Penang provides a backdrop for subsequent development. In Penang, the structural transformation of the state was enabled by the leadership of four State Chief Ministers. Firstly, under the leadership of Wong Pow Nee, we saw the establishment of Mak Mandin and the Perai Industrial area. Secondly, under Lim Chong Eu there was the transformation of Penang into an industrialized entity. The rapid economic transformation during this period using the Penang Development Corporation as a facilitating mechanism made a big impact on the Industrial Free Trade Zone, especially in terms of utilizing the industrial policy to improve employment opportunities. Thirdly, efforts were made by Koh Tsu Koon, the third State Chief Minister who took initiative to uplift SMEs in the 1990s through global supplier programs in PDC. Koh Ksu Koon improved the framework that was inherited from Lim Chong Eu. Finally, from 2008 onwards, under the leadership of Lim Guan Eng, the secretary-general of DAP, the national opposition party that is currently ruling the state of Penang, the state has changed its direction of development whereby besides concentrating on the electronic sector, it has also promoted Penang as a centre for medical tourism industry. This shift in development and sectoral paradigm is due to the challenges faced by Penang from global competitors, namely Malaysia’s neighboring countries such as Vietnam, Indonesia, Thailand, the Philippines, and Cambodia as well as the influence of China.

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