Technology Diffusion in the Telecommunications Services Industry of Malaysia

Abstract

This study empirically models technology diffusion and incorporates a more comprehensive framework in understanding the diffusion process of telecommunications technology in Malaysia. We inductively assess the government's conduct in translating the productive rents for upgrading activities. The results show that the proactive role of the government when intervening in market operations has considerably influenced the technology diffusion process. The telecommunications services industry of Malaysia achieved a critical mass of entrepreneurs by first engaging business entrepreneurs in contract services from Malaysian Telecommunications Department, then moved to business diversification at the end of 1970s and is now developing a market platform to furnish its sustainable telecommunications system. We highlight positive general macro-meso views of our case and provide salient normative principles as guides for transformational policy-making. The principles discussed in this paper provide policy lessons, or at least some initial guide, for other developing economies aspiring to follow the path of technology upgrading and development.

Keywords:

• rents management
• diffusion
• normative principles
• telecommunications services industry
• Malaysia

Acknowledgement

The authors are grateful to anonymous referees for their helpful comments and suggestions that led to improvement of the paper. Funding from the University Malaya in supporting the Malaysian Business History Project (FL025/2012) is gratefully acknowledged.

Notes on contributors

Chan-Yuan Wong is presently a senior lecturer at the department of Science and Technology Studies, University of Malaya. He has published in several international journals on industrial and innovation policies and growth models for production of science and technology. His current research interests are economics of catching-up, socio-economic transition processes and transformation policy and evolutionary science and technology policy.

VGR Chandran is an Associate Professor at the Department of Development Studies, Faculty of Economics and Administration, University of Malaya. He has also worked as a Principal Analyst of Economic and Policy Studies with Malaysian Industry-Government Group for High Technology (MIGHT), Prime Minister's Department, Malaysia. He holds a PhD in Economics and has held positions as a consultant and research associate with several international institutions.

Boon-Kwee, Ng is a senior lecturer at the Department of Science and Technology Studies, University of Malaya. His current research interests are policy and management of science and technology; industrial cluster innovation; and innovation for inclusive development.

Notes

1. Many studies (see various chapters in Khan & Jomo, 2000) have highlighted the impact of different forms of rent distribution (e.g. public sector employment and subsidies for certain goods or products) mechanism on socio-economic structure.