For the first time, a relatively unknown country was cast onto the world infocomm map as an attractive destination for leading IT companies to locate their subsidiaries and embark on cutting-edge research.

In 2003, the Malaysian government made yet another bold announcement: the launch of its BioValley project. At that time, biotechnology was touted to be the next big wave after the IT boom near the turn of the twentieth century. While the announcement generated some buzz and praises, it inevitably earned the usual pockets of criticisms.

After all, the government was trying its best to make Malaysia relevant in this ever-changing world. In simpler terms, it was another major effort by the Malaysian government to catalyze economic growth. The aim is to market Malaysia's cost-competitive, skilled labor as one of the major pull factors for biotechnology firms to carry out R&D and conduct their business operations here. Essentially, it forms yet another artery of the MSC, noted an industry observer.

Ambitious as it may sound, the government announced its target to attract 150 biotech companies with investments worth RM40 million (US$10.5 million) over the next decade.

Despite such lofty ambitions, Malaysia's biotechnology vision remains blurry. For almost two years, there was no clear direction as to where the industry was heading, until recently.

Last week, Malaysia finally unveiled its national biotechnology policy which outlined nine policy thrusts and the establishment of a lead agency to propel the biotech sector forward. Overseeing the implementation of these policies and initiatives is the newly-created Malaysian Biotech Corporation (MBC) which comes under the purview of the Ministry of Science, Technology and Innovation.

Other functions of the MBC include catalyzing commercial spin-offs to the private sector; facilitating market-driven R&D and commerce via funding and industry development services, as well as advancing research and commerce in agriculture biotechnology, healthcare biotechnology and industrial biotechnology.

At this stage, it's rather difficult not to draw a comparison between Malaysia's Biotech project and the MSC. Will we learn from some of the earlier mistakes made during the MSC experience?

Will there be the age-old bureaucracy problem, or the over-emphasis on property development instead of addressing the funding and talent issues? What about the senior management at MBC?

"It's going to be different this time," exclaimed government officials.

Indeed, the approach and execution is expected to be a complete reversal from the MSC project. There is no infrastructure development except for the Centre of Excellence for Pharmaceuticals and Nutraceuticals in the BioValley site.

As Malaysian Prime Minister Abdullah Ahmad Badawi remarked during his keynote address at the BioMalaysia 2005 conference, the government has decided to “employ an approach that moves away from an infrastructure focus to one that builds on the capabilities of existing institutions. As such, it will be developing a network or nexus of centers of excellence from existing institutions around the country known as Bionexus Malaysia.”

In contrast to the requirements under the MSC, biotechnology investors need not locate their facilities or plants at the BioValley hub.

Despite the shift in focus, the obstacles for developing the biotech industry remain the same--limited access to funding, the shortage of human capital and talents, and inadequate intellectual property(IP) protection laws.

Furthermore, biotech is still a tough subject to comprehend and investors naturally tend to shy away from projects they are unclear about.

Then, there are issues of licensing, patents and rights. Biotech projects, no matter how small, must examine legal issues and have an IP strategy before starting work.

The absence of a sizeable and vibrant scientific community is another thorny issue. As with the MSC, it is difficult to recruit top-notch scientists.

Although the government announced a specially-designed biotech incentive package to boost this sector, Malaysia needs to address the problems of manpower shortage, especially if it wants to compete with other neighboring countries with similar biotech ambitions. It does not help that some of the biggest names in the industry find Singapore to be a more attractive investment location.

Malaysia is a relatively new player in the biotech arena, and it still has a long way to go. Hopefully, the launch of the policy will help quell some uncertainties pertaining to the government’s commitment to this emerging industry.

biography
Cordelia Lee is CNETAsia's editor for Malaysia.